On paper, business looks so simple.
You start with three functional teams aligned with a market’s (simply a group of customers) best intent: R&D (design it), Operations (build it) and Go to Market (sell and support it). Add people, processes, and technology for sustainability, then scale to fit.
Like many operational leaders, you may be asking yourself this:
Why is it that when the pressure is highest (like now), do these roles that seem to fit together so naturally have trouble producing the new value that we desperately need?
To be specific, the problem I’m zeroing in on is when a mid-sized or larger firm needs to step on the gas and shift the focus of its value engine. What I’m hearing from clients back through the Zoom is that they know the ground underneath the firm has shifted, and they only have limited data on which to make impactful resource allocation decisions. We are coming into the annual planning cycle for many businesses and the old saw of adding 10 percent to the sales goal and removing 5 percent of the budgeted cost is simply not going to do it.
This is not the first time firms have faced this question – we did it in the ’80s, early ’90s, early 2000s, and of course in 2008. Why does this continue to persist?
Well, there are two key reasons. Let’s unpack each of them so we can find the path of leverage that we need right now.
#1: Focal Point/Metrics
There are powerful tensions between functions set up by where they focus their attention in time and how they keep score. As an example, it is not uncommon for the sales team to avoid taking R&D team members into an account, for fear that an inadvertent promise during discovery could reduce or defer demand for a big sale on the soon-to-be-updated product line. Similarly, it’s not uncommon for R&D teams to avoid helping their operations teammates on “maintenance of line” issues that seem “to be the manufacturing engineers’ concern” but actually might provide critical insights into the new product the R&D leader is working on.
Let’s clarify the roles and goals of each team and then talk about a solution.
- R&D work is future-oriented, with plans to put new products and services in the market well down the road when current value propositions are getting long in the tooth, or perhaps there is an emerging market need that needs to be met. Firms differ, but it isn’t uncommon for the R&D team to be looking 3-5 years in the future. Metrics include sales by product introduction date to assure that the value propositions they are releasing stay on track to do their fair share.
- Operations lives in the now to the edge of production planning, usually 18-24 months in the future. This close-in focus creates dependability and effective cash generation with the assets, products, and services that the firm has. The metrics here are all about optimization and efficiency, measured in terms of quality and cost.
- Go To Market teams are the most near-term team on the field. Sometimes measured in weeks and months (but more commonly quarterly), their mission is to keep demand on the system stable and robust for products and services. Metrics are top-line sales and time to close, cost of customer acquisition and service.
#2: Team Make-Up & Mindset
The second area to address is the natural alignment of leadership style and patterns of thinking that are present. Each of the three natural groupings has a built-in perspective and approach to business that impacts every detail of how actions are taken by the team. The challenges show up primarily when the groups are under pressure, and when the groups tighten ranks and back away from collaboration.
- R&D teams are home to visionary thinking. This group as a whole prefers staying at 30,000 ft. and crafting intriguing new products and services. This leaves them open to missing details and getting distracted with “shiny blue object” syndrome. Under stress, everything becomes a new strategy project, and the direction changes impact the firm’s ability to deliver.
- Operations teams are highly execution-oriented teammates that really just live to get things done. They have little time for idle chit chat, including meetings. Their strength is their weakness, in that they can disconnect from the strategy to feed the need to execute on something. Under stress, the pressure to execute can lead to some compromise in the quality and customer alignment of solutions.
- Go To Market teams love the thrill of the hunt and competing with themselves and their peers at other firms. They are highly motivated in a strong reward environment and prefer to see the results of their hard work in a fast and tangible way. They can stiff-arm new trends because they know they can only sell what’s on the truck.
They are Not Going Away
This alignment and set of groupings is near-universal, and for good reason. When times are stable, this alignment is very effective at creating success for clients and cash for the firm. Additionally, the people groupings described above tend to align with each individual’s core skills, academic training, and motivated abilities. This tribal alignment allows for efficient mentorship and career development, building a steady pipeline of skilled subject matter experts.
This runs fine in normal business conditions, but in the face of the economic shocks, these groups tend to retreat and over function on their core area of focus and miss macro changes in the market.
This is why the current environment is so potentially disruptive to larger firms. Simply said, firms that are able to build bridges between these functions will outperform those where the “silos” slow the adaptation and learning process.
How to Unlock the Gridlock
When the external environment changes faster than this internal team can respond, you, the ops team leader can feel like someone disconnected the steering wheel on the car. You ask for support from the Go To Market and R&D teams and they inexplicably resist.
In your gut, you know you need way more than compliance during this COVID crisis – you need everyone’s best.
To get your business on track, you need to create a temporary org structure to deliver exactly what you need, typically in the form of the cross-functional team. This will allow you to craft a high-functioning, mission-driven team to meet the shifting needs of your customer, without running afoul of the culture that “R&D doesn’t work on near-term products” or the “sales team is too busy meeting quota.”
Focus, Crispness, and Efficiency are Key
Executing at this pace demands peak output from the whole team and that means the team formation and execution must be top-notch. I’ve developed tools to support ops teams in getting a robust mission, team, and results to keep momentum and engagement during these accelerated team activities.
Let’s Talk
If you’d like to talk more about how this process works, it’s best if we have a specific dialogue.
I take on a limited number of advisory and project clients, using facilitation tools, checklists, and processes honed through dozens of assignments. If you’d like to talk about how an advisory or consultative approach could help you through the muddled middle, please reach out to scott@scottpropp.com or put a 20-minute appointment on the books using this link.
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