Dear Stan,
I’ve been an amateur observer of human behavior during my two-decade stint in the world of corporations. I’ve noticed that there’s always some type of turf war going on between various specialty functions. One common conflict is sales and production on one side, human resources and finance on the other. Or marketing versus sales. It’s too easy to chalk it up to power struggles for power’s sake alone, or grandstanding to curry favor for a promotion to the proverbial “C-suite.” What’s going on here? Do these territorial battles have to be inevitable?
Signed,
Peasant Caught in the Middle
Dear Peasant,
When a company grows due to its own success, functions become more specialized. The organization divides itself into those roles which cannot be done in combination by a few people any longer. Because many functions require ongoing and dedicated attention, with an additional need to continually keep up on changes related to those fields, careers are built around them: engineering, sales, human resources, finance, accounting, production, product development, research and development, logistics, etc. These functions can be largely divided into two types: “staff” and “line.”
“Line” functions are those which fall linearly along what is typically referred to as the “value chain,” that is, the line beginning with consumer and extending backwards through sales, distribution, production and raw materials. The “staff” functions are those which support the business’ ability to actually make money sustainably on the revenue generated from the sales: legal, investor relations, human resources, accounting, marketing, etc. In smaller companies, the distinction is less visible, and in fact many people perform both types of roles. In larger companies, the separation between staff and line roles can be a Grand Canyon.
To help identify the difference between staff and line functions, it is useful to think of the staff responsibility as determining the “how,” the method of accomplishing a goal. The line responsibility is accomplishing the “what,” the goals and objectives. When there is growing separation between these two roles, there is usually some level of antagonism between the incumbents. The line managers think that they are trying to get results, but the staff managers are slowing them down, getting in the way, for no good reason. The staff managers think that if they didn’t step in, the line managers would create so much risk that the company’s existence would be in jeopardy. With the best of motives, both sides feel like they are fighting each other for the sake of the organization’s survival. The irony is that the more motivated each side is, the higher the likelihood the organization will fail due to the destructive expression of these conflicts.
Companies who consciously and openly address this potentially disastrous dynamic have a much better chance of avoiding the damage. Some have established cultures where the tension is healthy, like 3M. Their method is simple:
1. Recognize that effectively decentralizing authority is crucial to sustaining a creative, responsive, adaptive, innovative company; err to the side of delegated authority.
2. Understand that growing leaders requires delegation of decision-making wherever possible, to leadership students worthy of the risk.
3. Consciously identify and communicate what decisions must be made consistently in a particular manner; create templates for such decisions which will allow delegation to either experienced leaders or those in development.
4. Where decisions must be done in consistent ways, and no template can be created, rely on centralized decision-makers as a least-preferred method.
5. Staff leaders determine the “how”; line leaders determine the “what.” Each must respect the other for their respective roles and value. Outstanding staff leaders know how to provide methods that reduce risk and minimize the time and cost of implementation. Outstanding line leaders know that if they don’t seek the advice and guidance of staff leaders, they will create unacceptable risk.
If an organization does not anticipate these conflicts, nor establish a concerted and conscious effort to follow the five principles above, things might percolate along OK for a period of time. That is, until it becomes necessary to establish dual reporting relationships where individuals have two bosses. This can be due to a functional leader needing to place a direct report in a distant geographic location and that person requires closer supervisory support. Or it can be because the company doesn’t need a full-time effort in two separate functional roles, so a single person does both, reporting to two leaders of those separate functions. Or it can be due to a line professional needing ongoing guidance about the “how” from a subject matter expert who leads that support function. All of these three cases can cause trouble, but the last is the most dangerous. The temptation is for the staff leader to intrude upon the activities and direction of the line manager, and for the line manager to emotionally resist involvement in line decisions by the staff leader. In such cases, the poor individual who has two bosses becomes the walnut in the nutcracker.
The key is consciousness: about the dynamics, the issues and the five-point recipe, which will not only remove most of the destructive conflict, it will create the healthy, constructive tension that will result in the entire team being sustainably successful over the long term.
Friday, February 18, 2011