It's good to talk!

Departments must communicate with each other to align efforts

How do we know?

Last autumn, I had been asked to sit in on the senior management meeting of an organisation that manufactures some pretty clever high-tech telecommunications devices. Whilst they have done well in the past, they were suffering - and the reason was the same reason that most manufacturing companies suffer.

When the meeting began, the managing director gave an overview of where the company was this year, and his message was not too soothing. Lots of despair; lots of finger pointing; lots of recriminations; lots of silence in the room. I couldn't resist the opportunity, so I asked the MD exactly what the problem was. His response was typical - 'the problem is that we can't get our products to market.' This sounded like a symptom of the real problem, so I said 'Yes, I understand you aren't getting products to market, but what is the underlying problem?' 'The problem is that we don't have the number of people or the financial resources of our competitors,' he said.

Okay, so now we were getting someplace, but something didn't add up. Several years previously, the company had done considerably better so I decided to push a bit for clarification. 'Several years ago, when you had better sales, did you have more people and more resources?' The room full of highly paid senior managers became even more quiet, largely because everyone there knew that when they had better sales earlier, they had even less people and less financial resources than they had now. Clearly, something else was wrong. And it wasn't until after the meeting that things began to become clear.

The meeting after the meeting

�Some of the biggest decisions are made at the 'meeting after the meeting'�

The managers in the meeting represented all the main functions of a company that produces the latest in technology - human resources, finance, research, design, technological innovation, production, etc. When the 'formal' meeting was over, 'real meetings' began. The concept of the 'meeting after the meeting' is very typical on management teams. Issues are talked about at the 'formal' meeting, but some of the biggest decisions are made at the 'meeting after the meeting,' usually conducted with either massive lobbying or lack of dissenting viewpoints. Isn't decision-making fun?

At one of these 'meetings after the meeting,' two interesting things surfaced. The first was that the meeting that just had occurred was one of only three that had taken place in the previous year with all the members of the 'management team' present. The second thing was that in the previous three months, the guys from innovation had been able to deliver a few pretty spectacular new developments for their efforts. Now in the case of company whose reputation rests on both the latest in technology and quality, innovation is a good thing. And even more good news came from the production guys. They had been able to re-design their production processes to make the products faster and cheaper. Okay, so lets figure this out...product will be more impressive than the competition and production will be able to crunch out more than ever; but the overall performance delivery didn't improve. In fact, the ability to place product into the marketplace sank faster than the Titanic after it hit the iceberg.

The fundamental problem was that the innovation guys and the production guys weren't talking to each other. They each knew that the other was working on improvements to their part of the product process, but they didn't share what the impact of those improvements might be on the rest of the company. And at the management meetings (which they all didn't bother to attend), nobody said much of anything. No wonder that the individual improvements didn't work together - no one knew what the others were doing.

Keeping the interrelationship alive

Here you had an organisation producing a complex product, with all the various departments working their tails off to do what they do better. But because they didn't talk to each other, the fruits of their efforts were not necessarily helpful overall. What had happened was that, whilst the innovation guys were focused on coming up with a better product, their improvements required changes in the production process. And at the same time, the production team was doing the same thing - working their tails off to make the product faster and cheaper, which they did. But the interrelationship between the new innovations and the ability to cheaply and quickly produce a quality product didn't go together well. The new innovations meant that the new production processes would barely work at all, and resulted in massive shipping delays, which meant reduced products on shelves. No products, no sales; and no sales, no profits.

What was happening in this example is not unique. Companies from all sectors suffer from the same malady - an inability (or unwillingness) to communicate effectively in order to ensure that departmental efforts do not become counter-productive, or even worse, adversarial. All of this can happen quite innocently. When the goal of 'continuously improving' is deployed downward, the efforts tend to become 'segmented' - each unit of the business is supposed to improve what they do, with the intent being the overall product or service is better. Keeping close contact with individual improvement efforts is key to avoiding the problems that this company was having - hot innovation is great, but if it causes other design challenges that no one knows about, it is pretty hard to see how they will see the light of day.

Your company may not be involved in producing the latest in technology, but the same dynamics apply - if there is little or no communications between the company's various functions, improvements (which is what the functions are supposed to continually come up with) may not deliver their promise. And then the company and its management can't deliver its promise to shareholders either. And then there is no way you will ever 'get it right.'

About the author

Dr James B Rieley is an advisor to senior leadership teams from all sectors. He has been recognised globally for his work on how to create environments in which organisations can realise their potential. He is the author of Gaming the System (FT/Prentice Hall, 2001); Plain Talk about Business Performance (Pen Press, 2004); Leadership (Hodder, 2006); and Strategy and Performance (Hodder, 2006); as well as writing a column for the Daily Telegraph on business effectiveness. He can be reached at jbrieley@rieley.com and www.rieley.com.

What next?