What Makes You Tick?

Every organization has several customer support activities that continually take place and involve more than one operational function. Because the response times among these corporate functions can vary, the task of internally managing the functions is complex and can result in issues that must be continually addressed.

The sales function is in continuous contact with the customer base and general market, so the response to market requirements and changes is nearly immediate (one to two weeks).

The marketing function works with the customer base to determine new product requirements and to orchestrate the introduction of new products. To accomplish this task, the marketing function must work with the internal engineering function, so the response time required may be four to eight weeks.

The operations function includes order planning (two to three weeks), material procurement (two to 10 weeks), product manufacturing (one to four weeks) and delivery (one to two weeks).

The total lapsed time for operations, therefore, can range from six to 19 weeks, and the required response time by function can vary considerably, as shown in Table 1.

Table 1

Evidence that the difference in response time among business functions can be problematic for organizations is illustrated by internal signs and symptoms that together form an identifiable pattern. This symptomatic pattern frequently occurs when large organizations place a high volume of their top business priorities into separate sets of functional queues.

Because the staff members involved in accomplishing these objectives are in different corporate functions, the co-dependent functional managers end up in a corporate gridlock of independent queue priority systems that are being serially processed. We call this condition corporate queue paralysis (CQP).

CQP describes a circumstance within large organizations in which many of the top-level process requirements get placed into separate sets of priority management queues. This syndrome occurs because organizations with a diverse set of functionally specific activities tend to naturally operate independently rather than in a coordinated, process-controlled environment. The situation often goes undetected because the assigned staff members are preoccupied and busy working on the individual priorities set by each separate functional manager.

Symptomatic patterns
Because functional planning horizons vary and market demand changes are so dynamic, the functional departments involved must meet regularly to coordinate their individual plans. The purpose of the joint meetings is to reconcile the built-in planning or reaction time needed to maintain the organizational marketing plan. Often, there must be additional co-dependent work meetings to maintain ongoing control of composite customer and market response requirements.

This approach stretches the resources involved in updating and maintaining the commitments made to individual customers and the overall marketplace. Because of these demands, the functional staffs involved spend more time maintaining the status quo rather than pursuing more proactive process improvement tasks.

Functionally independent priority systems are equally counterproductive. Process hand-off tasks must be orchestrated among functions at the appropriate process junctions. This continuous process requires the dynamic management of the various co-dependent functional responsibilities. A more productive approach would be to work under a common cross-functionally coordinated priority management system.

Long-term solution
Applying the principles of cross-functional management will break organizational logjams and improve overall corporate performance going forward. To resolve the CQP dilemma, five basic operational steps are required to develop and maintain a robust cross-functional priority management system:

Develop a single overall flow process of the cross-functional events involved. This should be performed by a seasoned cross-functional specialist (CFS) and should be built around the concepts of parallel activities, low process latency (a delayed reaction between stimulation and response) and decision making, which promote progress per unit of time. These are a vital set of requirements when the decision-making process is supported by an information-based workflow system.

Draft a common procedure that encompasses the needs of the functions involved. This requirement also should be performed by the CFS, who should be a well-qualified professional with substantial process improvement experience—often an industrial or quality engineer, or process improvement specialist.

Assign process owners, or principals, for each functional entity and indoctrinate each about the need and purpose for the cross-functional management plan.

Have senior management review, approve and publish the overall cross-functional process and procedure in the organizational process control system.

Require process owners to manage, monitor and modify cross-functional process steps to drive continual improvement.

Developing the process flow

An overall process-oriented approach is required to define the complex cross-functional set of sequential requirements. This must be constructed by experienced personnel who are able to balance low process latency with effective levels of participation, decision making and ownership.

The first step is to develop a preliminary overview flowchart of the events required, covering the front-to-back sequential cross-functional steps and the corresponding responsibilities of each process step.

Reviewing the overall process with the individual cross-functional principals requires perseverance because a good deal of exchange and guidance often must be provided to ensure all the participants involved are on the same page.

The success of this exercise pivots on the overall front-to-back continuity of the cross-functional process. Therefore, gap analyses must be continually performed by the assigned CFS, and all open issues must be addressed and resolved within and across the functions involved.

The flowchart is used as a graphic tool to review the sequence of events required to accomplish the overall cross-functional set of objectives. The time taken to reconcile the trade-off decisions facilitates process improvements that provide the leverage of organization wide co-dependencies. When the final version of the flowchart is completed, it should be published and distributed for reference for all involved.

Developing the procedure
Next, the CFS drafts the initial version of the sequential steps in the process. Usually, there is at least one paragraph of text needed to describe each sequential task in the overall process.

During the development of the procedure, the CFS frequently consults with each of the internal functional participants to ensure buy-in. The procedure is designed around the recommended ISO 9001 document format structure and the requirements to document process inputs and outputs. This is done for two reasons: The ISO 9001 format has proven over time to be easy to follow and understand, and the resultant document is properly formatted for organizations that seek ISO 9001 certification.

Developing the procedural text requires adding important detail that may have been left out of the initial flowchart. For that reason, the flowchart is updated by the CFS over the course of time it takes to complete the draft. After completion, the text and the updated flowchart are distributed for review by all involved in the development process.

After responding to any email requests for input or clarity, the CFS calls a meeting of all the major contributors. The purpose of the joint contributor meeting is to clarify and gain a common understanding of the overall process and to identify any new thinking and changes in the existing practices. The longer-term objective is to follow the new and improved process the correct way the first time.

After the meeting, the CFS follows up each individual corrective action required until all the identified issues are satisfactorily resolved.

Designating the process owners

In today’s business environment, every important company process must be actively and continually managed to achieve the top-level business objectives. Because of the dynamics, complexities and opportunities involved, this is particularly important when it comes to cross-functional processes.

After the cross-functional process description is agreed on, senior management must formally assign ownership responsibility for each process step. The individual process owners’ duties are specifically defined in the responsibility section of the published procedure.

During the life of the procedure and the associated process, each assigned process owner is responsible for actively maintaining and managing the successful execution of the process. Anyone requesting any changes to the officially released process and procedure must first formally obtain the appropriate process owner’s approval to do so.

Final process and procedure

The final document is prepared for senior management review, approval and release by the CFS. After all the principals and senior management have approved the final document, it is added to the organization’s document control system. The document is managed under formal change control for the life of the process and the procedure.

After publication, the process and procedure must be actively monitored by each process owner to ensure they are updated with ongoing business requirements and changes. As business standards change, cross-functional processes must be managed to reflect the latest competitive performance requirements.

Example
A high-tech organization develops and produces products for the global market, which are delivered through a variety of channels. Because of its formula for success, the organization grew quickly from start-up status to being an established and successful multinational competitor.

As the business grew during its initial years, coordination and communication became increasingly difficult. The rapid growth rate was starting to surface issues that were cross-functional in nature.

The tasks performed within each function were well defined and, in turn, well performed. Because of the scale of the operational entities, however, functional gaps were starting to occur when two or more business functions were involved. Many of the gaps were not always immediately recognized and, therefore, became increasingly difficult to detect and contain without losing operational efficiency.

A series of major cross-functional shortcomings occurred during the monthly worldwide customer demand forecasting process. The progressive monthly process steps started with the sales function, which forecast the demand. The marketing function reviewed and approved the sales function’s demand forecast.

The demand was planned and implemented by the operations function, and finally the forecast plan was appraised and the results were reported by the finance function. It was clear that a new and improved overall process was required to progress beyond the fragmented approach being used by each of the functions involved.

Senior staff was committed to working through the cross-functional performance barrier. Working with each function, the CFS was charged with defining the process-related requirements and responsibilities of each phase of developing the progressive demand forecast. Because the process had to be managed on a daily performance basis, it also had to include continuous performance feedback loops from front to back.

In the middle of the overall process development effort, a previously hidden requirement was discovered. Due to competitive requirements, geographical location product price change requirements had to be continuously accommodated.

Localized price change introductions affected the product volume quantity and financial contribution of several locations. This required virtually continuous product price and volume monitoring, and feedback to all the functions involved. It also directly impacted the organization’s overall revenue and profit projections.

Because of the laborious complexities involved, the collective process elements took almost a year to develop and get buy-in from each function. It was a massive process development undertaking, but the mission was accomplished.

An integrated, dynamically changing system of processes was developed, and a feedback system that supported each function and its assigned responsibilities was established. As a result, the organization also was able to improve its forecast accuracy from 50 to 85% .

Keys to cross-functional success
There are several important elements in successfully creating and managing cross-functional procedural processes, including:

Priority alignment. Aligning priorities among the functional principals into a single priority system is difficult because business priorities vary by subject and the time-oriented dynamics of the business involved. All the participants must share the same level of priority to stay the course and get the tasks accomplished in a timely manner. Just getting the initial attention of each of the principals takes time and involves a fair amount of persuasion. There is also the matter of the legitimately different points of view that sometimes take several multiparty exchanges to resolve.

Process complexity. By its nature, it is difficult to explain a diverse set of process steps to someone who is not process oriented. Skill and perseverance are required to break through the roadblock to a full understanding of the process-oriented requirements, which are fundamental to success. Often, the CFS has to take a “trust me” approach and go the extra mile to explain the important details involved to the individual contributors.

Functional bandwidth. To be successful, the CFS must have a diverse set of skills founded in education and experience. Although the subject matter may vary by industry, the knowledge and application of successful management principles and approaches are fundamental to success.

Most of the internal principals have skills that were developed within their assigned function. The CFS must have an expanded topical bandwidth of knowledge to cover the cross section of responsibilities involved while also providing guidance to each principal to help him or her achieve a more broadly based understanding of the process.

The CFS also must be process literate about proven and emerging systems, particularly when processes are required to span multiple geographies that cannot rely solely on direct participation in cross-functional meetings. The CFS must understand the most effective way to use systems to bring people together to make effective business decisions. In addition, the design of the workflows developed must remain flexible to take advantage of emerging technologies.

Corporate benefits
Setting and meeting high-order organizational business goals pivots on understanding what it takes to succeed in today’s aggressive and ever-changing competitive environment. Cross-functional process development provides the platform for successfully managing the co-dependence of the internal corporate organizations.

Progressive organizations must take advantage of the considerable amount of knowledge that they have accrued. Business inefficiencies can be difficult to find if you are not specifically looking for them. The development of cross-functional processes provides an opportunity to leverage business performance improvement opportunities.

The first organizations to search for and develop cross-functional process improvements will set the standard for the world-class performance that others will follow.

Reference: QP