As Managing Director of Strategic Development for the UK & Ireland at Experian, Steve Thomas has done a lot of work integrating a company that’s acquired 200 businesses over the last 15 years. Yet he was acutely aware that the structure they were brought into was not compatible with long-term success.
“We weren’t able to project growth from the divisions at the desired revenue,” he explains. “The four top opportunities across the group were cross-divisional. It was clear we had to work differently to achieve our ambitions.”
As with many businesses adapting to modern challenges, agile and collaborative working offered solutions, so Steve pooled some of his best talent into a cross-functional team. But in his efforts to change the business, he was struck with how to balance resources.
“The innovation team never suffered from capex or opex availability, but from resources. The people essential to the project were needed in other areas of the business so they didn’t dedicate enough time to it,” he explains.
Steve goes on to relate how the existing operations were also put under strain to perform at the same standards, yet with less means. “With leaders giving up people to the project, they felt they didn’t have the resources to do what they’d committed to, making meeting revenue targets more challenging,” he says.
Redefine the tribe
Gary Browning, NED and former CEO of Penna shares similar experiences. “I inherited a company that in 2006 was very siloed and almost set up to be internally competitive,” he reveals. “It was really difficult to get people to work together across divisions for the benefit of the client. We had people asking why they should allow their top person to go off and work on something that didn’t count towards their own results. It took a couple of years and huge amounts of investment to break down that mindset.”
Gary describes how the company had to “redefine the tribe”, encouraging people not to see themselves as a member of one of its divisions but of the whole company.
“Interestingly, we had more resistance the further up the organisation we went. The younger, more junior staff had a real desire to be part of the one tribe, but as you went up to middle managers, seniors managers and MDs, they wanted to keep ownership of their people, P&L and clients – that’s where we had to do the most work,” he explains.
Progress was made by creating a system that rewarded collaborative behaviour. “Previous management’s view was that to achieve collaboration, you should remove all measurements from a local level. They took out local P&L and had just the one measuring a £100 million business with no local KPIs. That may sound like a solution to breaking down silos, but it caused a huge problem in the business because we completely lost accountability. I put those measurements back in again, but it was into an environment where people already wanted to collaborate,” Gary explains.
“We did that in a number of ways: hard bonuses, soft rewards and spot bonuses. We launched an employee of the month scheme, but the only way you could be nominated was through behaviour, not sales. We promoted and recruited for behaviours and set KPIs for them. But we never totally cracked it – it’s incredibly difficult.”
Win over your divisional leaders
While Roger Edwards, Managing Director of the Municipal Division at Biffa, embraces the collaborative approach his company is taking, he is able to shed light on the impact cross-functional teams have on divisional MDs. Biffa’s lead agile team is working on a project that will transition customers to a digital platform, but it’s also applying a lower-burning collaborative ethos to ‘business as usual’.
“Having just successfully listed on the stock market it’ll be crucial to act for the greater good, because ultimately we’ll be judged on share price and not on divisional success. We need to create the mindset that it’s the company first and division second,” he explains.
However, being a divisional MD himself, Roger sees the challenges at a local level, in particular not knowing how long your team members will be gone if reassigned, how to hit the numbers without them, or whether to hire replacement resources in their absence.
So how can a company support its divisional heads? “If I let someone go for the benefit of the business, I want to know that it really was of benefit,” says Roger. “Communication on the milestones and success of the project are needed so that people can understand and support it.”
Communicate the rationale
Cross-functional teams can be a way to test and promote staff in areas they have the most potential, but you must be clear on what you’re trying to achieve and why.
“Most people fear change and won’t want to go into the unknown without reassurances,” says Charlie Wagstaff, Managing Director at Criticaleye. “Communication is always central to that, but you must also create an environment in which team members really feel they are better off for the work they are doing. That means finding what people are good at and growing them in the area of the business most suitable to them.”
Carol Peckham, Vice President of HR Transformation for the UK & Ireland at DHL Supply Chain, also argues for clarity on the responsibilities of those people. “For me, you have to understand where the critical talent pool is so you can use it on priority projects, rather than always asking colleagues to do things on top of their day job, which tends to be the norm in a lot of organisations,” she says.
“We’ve been looking at cross-divisional talent sponsorship so we’re talking very honestly about what each individual needs to do to develop their own careers across DHL. We’re also recognising people who proactively move colleagues around the organisation.”
It’s a slow process at DHL, where leaders have taken a gentle approach to agile working due to concerns about resistance. “There are more ideas coming through and we are only at the beginning. Ultimately, there is a fine balance that needs to be addressed. This type of approach requires agility and the right behaviours to adapt at speed, but at the same time you need to bring colleagues with you and allow them to see the benefits of working across divisions,” Carol explains.
These insights were shared during Criticaleye’s recent event, How to Bust Organisational Silos.
By Mary-Anne Baldwin, Editor, Corporate
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