But the benefits a company can reap from breaking down barriers between internal departments or tribes, are broad and far-reaching. They range from reduced costs achieved by streamlining suppliers to heightened creativity through pooling talent.
Like any large-scale cultural change, achieving cross-departmental synergy is not easy and must come from the top down. Yet the HR director, by acting as a coach to the board, can drive it forward. According to Gill Stormont, director at The Leadership Trust, the UKs largest provider of leadership development programmes, The HR director can sell the benefits by showing the cost-effectiveness of these practices.
Terry Morgan, group managing director, operations, and previously HR director at BAE Systems (formerly British Aerospace), agrees that the HR director must play a key role in pushing these changes, but says they must think carefully about the methods they use. They need to recognise that the way they achieve this goal is just as important. They must make sure that changes are sustainable, performance remains high and strong leadership is provided, he says.
There is no blueprint, and there are risks, but several HR experts have gone some way to identifying techniques that help eliminate internal fiefdoms within their organisations. Hilary Scarlett, partner, Smythe Doward Lambert, a management consultancy for people-centred change, believes the crux lies in incentives.
The key is thinking about what staff are rewarded for: are they rewarded as a division or on the performance of the company as a whole? she asks. The behaviour should be that people work as a team but have goals set across the company and are rewarded for other divisions performance as well as their own.
In Scarletts view, employees should feel loyal to their own team, but the team leaders should work together that way staff, clients, contacts and ideas will be referred across the organisation. Yet she admits that cross-divisional incentives are tough on staff if their department does exceptionally well, and says this method requires careful handling so employees can see the benefit.
Winston Fletcher, director of ad agency Delaney Lund Knox Warren, is sceptical. All efforts and attempts to incentivise financially to encourage people to work together fall flat, he says. It is extremely difficult to measure the contribution of one person against that of another.
Dick Etches, HR director at GKN, an engineering firm that includes Westland Helicopters, believes that the most powerful method of smashing down the walls is to move people between departments. It has to go further than simply having networks of people that collaborate. We have a number of people who can fill roles in a number of different divisions, so we move them around.
BAE Systems has had a hard time trying to break down walls within its organisation. Not only was there a stockade around each business unit in terms of transfers of people, but within divisions there was little interdisciplinary movement, says chairman Sir Richard Evans in the book, Vertical Take-Off, co-authored by Evans and Colin Price. Individuals whod made big contributions to a particular defence contract were hoarded like gold, far too valuable to be shared. The result was a strong esprit de corps in contract teams. Unfortunately, none of it spilled over to the larger company.
The company has since undergone years of change, and now advertises all jobs except the top 40 internally. It also ensures that for each position the candidate list includes people from different divisions, so when employees become more senior, they have rounded experience of the organisation.
Internal tribalism means that the goals of the company and the goals of the department are in conflict, says BAEs Morgan. Its vital that employees see themselves as part of a 120,000-person organisation, not a 50-person department. The way we get them to do this is by moving people around the organisation.
WPP, a global network of advertising and marketing companies referred to by its chief executive, Sir Martin Sorrell, as tribes, moves staff around within the realms of client accounts, using a central team to drive the changes. The WPP centre plays an active role in facilitating access to knowledge that should be shared across businesses, says Brian Brooks, the companys HR director.
We move talent within the group only where it serves both the interests of both our clients and our people. This often means that people move between companies and sometimes between disciplines within the context of working on a common client business.
While working as HR director at Britax, a manufacturer of consumer durables, Stormont convinced the board that movement engenders closer sharing of resources and talent between the companys divisions.
When one director moved between the automotive and aerospace departments it was discovered that some of the materials used within the divisions were the same, and where one division wasnt using its full quota, the other could use the surplus. It saved the company hundreds of thousands of pounds, says Stormont. These tangible benefits have to be communicated.
Of course, communication is a key underlying factor in breaking down walls, but it must not be carried out half-heartedly. Yes, you can use the net and intranets and videoconferencing, or management conferences, says Stormont, but they tend to be sterile and dont really foster the breakdown of barriers.
The engineering firm, Smiths Group, is running an entrepreneurial programme with Babsons College in Massachusetts in the US. Live projects are done on a cross-departmental process, bringing teams of people together who would not normally meet and allowing them to see first-hand what the other groups are doing.
Smiths also uses weekly meetings where group directors review clients to ensure that supplies are bought efficiently and to see what other services the client could be sold. Anne Minto, Smiths HR director, says: My advice would be to make sure that people are communicating with each other through travel and site visits as well as the usual means such as intranet and email. But this is a big challenge for Smiths as it has 38,000 people around the world.
Minto believes the HR director can be a catalyst for this kind of communication. My role means I visit a lot of sites and put people in touch with each other, such as managing directors of different groups who are facing the same challenges, she says.
But to continue on a long-term basis, communication must be fostered and monitored regularly by HR teams, who can then feed the results of the communication back to the board, thus engendering more collaboration and less division.
Moreover, communication must be honest, and underpinned by action, to create trust between departments. Without trust, barriers will never come down. If you lend someone whos good to another programme, and they are not given back to you, then you are less likely to do it a second time, says BAEs Morgan. If you do it a second time and they dont come back then the third time you are asked the answer will be an emphatic no.
Morgan suggests encouraging people to learn from each other. He says that although using other departments processes or innovations is often seen as a sign of failure, there is nothing wrong with copying someone else if they are doing well. If you are very competitive internally, then you lose sight of the external enemy, the real competition, he says.
Yet at GKN, a collaborative culture is only pursued to a certain extent, and it is Etches responsibility to ensure he knows where to draw the line for the sake of profitability. Etches says that engineering, development and design people must be focused and loyal to their divisions.
Each division is a business in its own right and the company must not temper their ability or opportunity to compete. Sharing must be focused on the people who know the broader GKN focus we must not distract too many people from their core function, he explains. It is a fine balance and we dont always get it right we err on the side of not distracting our employees from the task at hand.
Minto agrees: If people dont share then they are forced to reinvent the wheel, but nor does the company want to have a whole set of clones because it doesnt add value. But there are some HR directors who need to accept that internal rivalry and departmental divisions are profitable for their organisations and must be actively encouraged.
We are committed to maintaining the independence of our individual operating company brands both from an internal and external standpoint, says Brooks. We do not want our companies to be the same. We want their cultures, values and specific strengths to remain strong as this will allow us to offer a broader range of alternatives to clients.
But Brooks admits that it would be commercial suicide not to co-operate on a basic level to create greater efficiencies between WPPs tribes. So, the group co-operates to purchase generic training in particular disciplines such as public relations or market research. It also acquires travel, supplies, IT and recruitment services collectively from outside vendors.
These common approaches should in no way interfere with the differences that matter most in the marketplace: the type of work we do, the unique experiences of both the people in each company and their ideas, says Brooks. Being part of WPP simply means they are able to focus more on the things they do best, and WPP can help them manage their resources more effectively.
The role of the HR director is to identify the extent to which a company can eliminate internal fiefdoms, and the extent to which it should preserve internal tribes. This is often less complex in a company where internal divisions do not compete than where competing firms sit within a group.
When it comes to competing companies within a group, I recommend the sharing of skills, but not necessarily knowledge, says Stormont. Overall, companies should identify where they can compete and where they can share resources.
Jennifer Hiscock is features editor of Marketing magazine
Further reading
- Vertical Take-Off: The Inside Story of British Aerospaces Comeback from Crisis to World Class by Sir Richard Evans and Colin Price, Nicholas Brealey (1999)
- Living Strategy: Putting People at the Heart of Corporate Purpose by Lynda Gratton, Financial Times Prentice Hall (2000)
- Management Challenges for the 21st Century by Peter F Drucker, Butterworth-Heinemann (1999)
- Organisational Culture: Organisational Change? by Peter Elsmore, Ashgate Publishing (2001)
