Herding Cross-Silo Cats

Startups have a huge advantage over large companies.  A small team of people dedicated to one, and only one goal.  Everybody moves in the same direction.  Everybody lives and dies by that goal – or at least their wallets do.   Everybody is tightly connected.  Everybody contributes well beyond their job descriptions.  No legacy customers to support.  You get the picture.  Of course, startups have unique challenges as well – resource limitations, brand awareness, and only embryonic partnerships, to name a few.  But the entrepreneurial thrill and clarity of purpose are energizing.

Now contrast that with a Fortune 500 company that has just decided to pursue its latest strategic initiative.

  1. First, any initiative is likely one of a many.
  2. It typically relies on changes throughout the company in order to succeed.
  3. It typically emanates from a single functional area.
  4. And that brings us to the well-known elephant in the corporate boardroom.  Functional organizations that don’t do inter-functional initiatives well.  Below the CEO, nobody is truly in charge of the changes that must be made, and the CEO can’t dedicate enough time to it.  To be sure, somebody is “responsible” for success of the strategy, but he often doesn’t have the cross-silo mandate to affect change, making it like herding cats.  And that somebody also has a day job ensuring that his team makes its many goals, leaving little time to ensure that required changes occur elsewhere in the company.

SiloesIt’s no wonder that companies often take major initiatives off-site to incubate, effectively replicating the advantages of a startup with the added advantages of the larger company.

But even this has its limitations.  Eventually, the existing sales force and partners must be trained.  The supply chain must be integrated.  Support/service teams must change.  That wouldn’t be so difficult for a simple product change, but big Strategies, with a capital S, can require much more.

  • Go to market may change dramatically, whether by addressing wholly new markets or approaching traditional markets differently.
  • Sales people must be motivated to sell the new offerings when old ones are more comfortable to them, with existing sales pipelines.
  • The company’s entire business model may change, requiring a balancing act with Wall Street to communicate the value of the change and requiring an investment high wire act to ramp down the old model while ramping up the new model.
  • People will lose jobs as they become less relevant while the new strategy creates new jobs requiring new skills.

These issues beg some critical questions:  Who is truly empowered to ensure that planned customer experiences are enabled across the company?  Who will deal with the conflicting budgets, priorities, biasses, history, and comp plans, all of which are designed to run the old company rather than the new one?  Who will ensure that even well-intentioned execution is not crippled by biasses born of the old model?  Your strategy is only as good as its execution.

We have found two solutions that work, although neither is perfect:

  • A Chief Customer Experience Officer (or equivalent), empowered by the CEO to affect change across many initiatives.  An insider with internal relationships and implicit trust, but it’s seldom more than an advisory role and can be hobbled by traditional company biasses.
  • An outside resource, focused on a single initiative, typically with senior management mandate and air cover, but trust has to be earned and long-term outside help can be expensive.

Which one is best for you depends on your individual situation and on your appetite for a more permanent cross-silo infrastructure with enough power to make change happen.