Have you ever worked in a company where every functional group had their own “kingdom”? I have. It was frustrating. I’ve also had the pleasure of consulting for companies where the objective seems to be “How can we screw the other groups?” and communication seems to be discouraged. Here is a short story based on an actual meeting I attended. The names and places have been changed. I might have added a little “color” to make the story funnier.
I was recently part of a project for a medical device company that required changes to many products due to changes in regulations. During the exercise, some of the company personnel decided now would be a good time to assess product sales and to eliminate products with little to no sales during the past few years. However, this company has never eliminated products, regardless of sales performance.
The sales and marketing resources look over the list of affected products. They decide to exit the market on about 10% of the products. There haven’t been significant sales for quite some time. Several of the products have also been replaced by newer and better products. Keeping these products active is a burden on company systems, inventories, etc. and would require additional expenses and maintenance to keep regulatory registrations up to speed. Everyone reviews the list and agrees.
The team proceeds with eliminating the products from the market. A decision is made to scrap quite a few of the products on the shelf. For some of the others, the team decides to keep the inventory and allow slow sales to deplete the remaining inventory. In all cases, no more product will be manufactured. In all cases, the products will not be re-registered or marketed. But it makes sense; some doctors still might use existing quantity on hand.
The team works hard but makes the project deadline. This is a real deadline because the regulations go into effect. Any product not meeting the new regulations by this date represents a compliance issue. The team is happy and celebrates success with a small party–unusual in the corporate world these days.
Weeks after the project is done, requests stream in demanding that several eliminated products be reactivated. In a couple of cases, there might have been some errors. Humans make mistakes. The team works to correct the errors and all is good.
The requests continue. Not a lot, but more than the team expects. The team members have moved on to other demanding projects. Didn’t everyone review the list of products slated for elimination?
As it turns out, not everyone did review the list. As it turns out, the team’s interpretation of “elimination” is not shared across the company. As it turns out, the systems the team used to eliminate products are not used by other functions in the organization. Bummer. This project was pretty smooth until now.
Other functions, not a part of the original team, start demanding reactivation of several products. “You need to reactivate this product. If not, we will lose a couple thousand dollars in sales.” Unfortunately, it would cost the company at least this much to reactivate the products just to fill the small order and then eliminate it again.
The team calls a meeting, this time including the “other functions”. The attendees all learn a little about one another and the importance of their roles. More importantly, the attendees learn that none of the enterprise systems that each functional group uses communicates with the other. Most importantly, the attendees learn that the functional groups are terrible about communicating with one another.
Regardless of size, companies need to understand the importance and usefulness of cross-functionality and active communication. Building kingdoms went out of fashion during medieval times. We need to establish cultures of communication. Stop building walls and figure out how to tear them down. Understand that change is part of life. Realize that any change should be examined holistically. Understand both short-term and long-term ramifications and benefits of change.