Tuesday, February 18, 2020

Corporate Commentary

Is Your Organizational Structure a Relic? Here’s How to Improve Cross-Functional Collaboration

Over the past 70 years, the workplace has undergone a complete transformation. We use laptops and emails in place of typewriters and letters. We eschew bulky, dusty file folders for cloud storage. We text and call, leverage flextime, and can work from virtually anywhere.

But for all the progress we’ve made, one aspect of modern business remains stuck in the ’50s: the hierarchical organizational operating system.

The old leadership paradigm — top-down, directive, and vertically oriented — was formalized in the 1950s. Each discipline seeks to achieve its own goals and build its own empire. We know that this type of structure does not enable organizational success, but countless companies still cling to it. If you want to achieve your business goals, you must first learn how to increase collaboration between teams.

Why Are Cross-Functional Teams Important?

The problem is the traditional org chart hierarchy. Each level on that chart sits above the next level. The people who actually do the work that drives products and services are at the bottom, weighed down by all the levels above them.

I noticed early in my career that even upper-level leaders feel like victims of their superiors. That might seem implausible considering they have power over the numerous people below them, but they are stuck in a victim mindset.

I once worked with a VP who was trying to put together a plan for a leadership summit he was directing. He grew very quiet at one point, and I asked him what was wrong. He expressed his desire to change the focus of the summit, but he said an adjustment was impossible at that point. I asked him why, and he said because the CEO had already decided what the summit should be about.

When I asked him whether he was empowered to change the summit or even discuss changing it with the CEO. Ironically, lack of empowerment was one of the summit topics we discussed that day. He meekly said, “No.”

The traditional hierarchy disempowers every level of the organization except the very top. This top-down model doesn’t allow for cross-functional collaboration — or an optimized business.

How to Improve Cross-Functional Collaboration

While the old organizational structures focused on individuals, a cross-functional collaboration framework focuses on teams. Teams make decisions, and leaders are there to facilitate. Under this horizontal structure, the VP I previously mentioned would have felt empowered to address his summit concerns with the CEO.

Leaders who are able to set aside their egos and think about what’s best for their organizations are more likely to give up the 70-year-old, power-based model and embrace a whole new cross-functional structure for their organizations. If you’re willing and able to make a change, here are five ways to improve collaboration while shifting to a horizontal approach:

  1. Map the horizontal.
    To shift to a horizontal structure, start by mapping out your business, process by process. This can be an eye-opening experience for leadership teams that are so used to viewing the organization through a vertical lens rather than a cross-functional collaboration framework.
    For example, I recently worked with a supply chain organization to map out the product sector. All they wanted to talk about was the vertical, so I banned the mention of verticals. By the second day, they had made the shift into thinking about products and product streams — and were much more effective because of it.
  2. Train leaders in collaborative skills.
    What most leaders view as collaboration is actually a form of directive leadership. Let’s say a project needs a plan for how to proceed, and the project leader collects input from team members before sitting in front of a computer and hammering out a plan. That’s not collaboration; that’s the project leader deciding on a plan.
    True collaboration happens when people get together, engage, and then make a decision together. This process works best if they use a collaborative decision-making method, which provides a structured process to reach consensus.
  3. Optimize your project system.
    Projects are how you execute your strategy. They exist in the horizontal dimension because almost every project is cross-functional. Therefore, projects are a good place to gain competency in the horizontal dimension.
    The portfolio of projects needs a steering council — one made up of senior leaders who are accountable for ensuring the strategy is executed. This steering team will need systems for selecting, funding, overseeing, and prioritizing projects.
    In addition, you need to train everyone on how to lead projects collaboratively and on the importance of cross-functional communication. This training ensures that the outcomes of projects — the solutions — actually get adopted by stakeholders. Getting the project system right is only half the battle for working in the horizontal dimension.
  4. Redesign your management systems.
    Your accountability, performance management, and reward systems are designed to support the hierarchical operating system. They are based on the hierarchy and the boss having control over “subordinates.” When something goes wrong, it’s always someone’s fault because that operating system relies on guilt-based accountability. This model creates dysfunction and even toxicity.
    If you want to shift to the horizontal and implement cross-functional collaboration best practices, then you have to throw out these corrupt systems. In their place, install systems that support agility and cross-functional collaboration.
  5. Set up horizontal governance.
    Once you’ve implemented the above strategies, you’re ready to shift to a horizontal structure. Now, you’ll need to identify the major sectors of your organization and set up leadership teams to oversee them.

A good example of a governance team might be product steering, which oversees your entire portfolio of products. You would need a strategic level team that sets the direction for the portfolio, and you’d also want operational teams to translate that strategy into specific projects.

Are you ready to move your organization out of the 1950s and into the 2020s? A simple restructuring won’t create cross-functional collaboration. You need to shift to a new operating system — one that is horizontal instead of vertical. It’s the only way to improve collaboration between departments and set your business up for success.

Have you read?

# Best CEOs In The World 2019: Most Influential Chief Executives.
# World’s Best Countries To Invest In Or Do Business For 2019.
# Countries With The Best Quality of Life, 2019.
# Most Startup Friendly Countries In The World.
# Global Passport Ranking, 2019.

Paula Martin
As the CEO, chief creative officer, and director of product and service development at the Matrix Management Institute, Paula Martin is passionate about changing the nature of work to be more in line with human potential. Paula Martin is an opinion columnist for the CEOWORLD magazine.
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