Breaking Down Barriers in Business

silo

6 key tips to help you succeed

I was intrigued last week with an article in the Harvard business review entitled Jack Welch’s Approach to Breaking Down Silos Still Works by Ron Ashkenas. The article got me thinking about how many times I’ve encountered very rigid siloes in both my corporate life and consulting life.

I am sure that if you’re working in procurement and supply chain management in a matrix organization, especially across different business units in different functional areas, this is a problem for you. The interesting thing about procurement and supply chain in today’s world is that not only do we cross business units and business functions, we also cross geographical and cultural barriers.

Jack Welch, as CEO of General Electric, was convinced speed of globalization and technology innovation required companies to work in a different way. With shorter decision cycles, more employee engagement and stronger collaboration are required to compete in an organization with no boundaries.

When I agree to help a CEO reduce cost and add value on a global category approach, I request that the top management team be involved in creating a steering committee to oversee the projects. When projects are approved by the steering committee, one member of the steering committee must act as sponsor for the project.

Another essential success factor is creating a time boundary on the project. Typically, I allow eight weeks for the entire project. The team works together for four weeks and gives an initial report to the executive steering team with a conclusion for weeks later.

The team is not responsible for the implementation, but must identify the opportunity and secure the savings. What I found through this dynamic is that the team does not want to review failure with the senior management team. Typically, the aspirations for the ROI on the project are high and the results are always achieved. It makes sense that no one wants to report bad news to top management as it could be a career limiting move.

I also establish rules and governance for the project where the steering committee takes on the role of removing roadblocks. Needless to say, when projects are presented and endorsed by the senior management of the company, the opportunity for stakeholders to block progress is greatly reduced. It is also necessary to consider establishing budgets for travel conference calls and other miscellaneous expenses. This heads off a lot of the issues around individual budgets and travel expenses.

Finally, I advise the senior management of the company to celebrate success. In one case the CEO the company had an opportunity to reduce his cost by over 20%. When discussing what would be a great success he decided to take all of the team members and their spouses to the best restaurant in the city. They were picked up by limo, they spent the night and were given a small token of appreciation. Now, five years later, the team still talks about that night and there are abundant volunteers at all levels of the organization who want to be on projects. It is now a cultural norm at this firm.

Six tips for breaking silos

  1. Build governance process for the project that includes a very senior level steering committee and sponsors for each project.
  2. Empower steering committee to approve projects, provide input, and remove roadblocks.
  3. Establish a cross-functional, cross-business team assigning responsibility, authority, and accountability.
  4. Set a rigorous timeline for the project.
  5. Establish a budget for an initial meeting to develop the mission, agree the vision and drive the project.
  6. Celebrate success.

I’m sharing these tips because they have help me assist companies in savings projects that exceed hundreds of millions of dollars. If a company is not willing to provide the right governance, processes, budget and commitment to cross-functional/cross-business global teams, I won’t accept an assignment, because breaking down the barriers is difficult to do.

Can you knock down the barriers?

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