#Silo falls in wrong directions full

Everything from the diagnostic before the transformation begins through to the future-state design, the leadership model, and the implementation plan will involve greater complexity-which leaders can manage by mastering a few key points along the way. The increase in scope and scale that a cross-functional transformation entails means that careful attention to detail is critical at every step. The road to a cross-functional operations transformation Moreover, by following a rigorous (yet flexible) approach to quantifying the opportunity, designing a transformation process, and implementing it, the business is much more assured of achieving results that more than justify the effort involved. The better balance comes from undertaking a broad-based operational transformation while the organization has a lot more opportunity to create and capture value. But, by then, the business may find itself with only a very narrow set of options (if any) for turning itself around. It’s easier to open minds to change once it’s obvious that existing practices aren’t working. In a sense, an organization that’s in real distress has a small advantage over better-performing peers. It recognizes how difficult change is, and how uncertain the rewards can be if change is pursued only for its own sake.īut too often, it’s easy to believe that something “ain’t broke” when it actually is-or soon will be at today’s pace of change. After all, “if it ain’t broke, don’t fix it” is a catchphrase for a reason. Why don’t more companies commit to cross-functional transformation? Because transforming even a discrete area is hard, and adding the complexity of examining the whole of a business is harder still. Visit our Operations Transformation page Don’t wait for distress

#Silo falls in wrong directions full

Cross-functional transformations can also reduce enterprise risk, enhance resiliency across the organization-especially helpful during the current period of economic volatility-and help businesses keep pace with lightning-quick changes in the competitive and macroeconomic landscapes.īy considering the ways that product development, procurement, manufacturing, supply chain, capital expenditures, and services intersect, a firm can unlock its full operational potential and build the capabilities and agility it needs to sustain improvements (Exhibit 1). Indeed, we find that cross-functional operations transformations typically outperform their single-function counterparts by between 30 and 40 percent. A top-flight oboist can’t improve a group’s musical performance nearly as much as a conductor who works with every section in the orchestra, emphasizing the ways their musical parts interact. Improving a single athlete’s performance can help improve a basketball team’s record, for instance, but improving all the players while also teaching the group to work better as a team leads to far stronger overall improvement. To understand why, think about other team-based endeavors. Accordingly, our colleagues have defined transformation with a capital “T” as “an organization-wide program to enhance performance and to boost organizational health.” By contrast, organizations that break through silos in an end-to-end operating model operate more effectively.

Our studies have repeatedly confirmed that about two-thirds of transformation efforts fall short of their goals or are ultimately unsustainable. Thinking and working in these types of silos isn’t typically a way to extract an organization’s full potential. This basic rule applies across industries, where businesses of any size naturally divide their operations into areas and functions: procurement, manufacturing, and supply chain for a manufacturer, or client advising, risk-assessment, and fulfillment in a service-sector institution.

Then, the parts and the whole reinforce each other.

Instead, it’s more accurate to say that improving the parts is much more likely to pay off if you first work to improve the whole, seeing it in its entirety from end to end. And because the whole doesn’t change, the improvement in the parts themselves isn’t likely to last. At best, we find, improving the parts improves only those parts, without necessarily reaching the whole.