Last week Microsoft's Chief Executive Steve Ballmer announced sweeping organizational changes. This radical restructuring is an attempt to drive innovation by breaking down organizational silos. As Ballmer noted, “To execute, we’ve got to move from multiple Microsofts to one Microsoft.”
The radical re-structuring of Microsoft brings to the forefront a growing trend we are seeing in our own change management consulting. That is the re-surging popularity of "one company solutions" and the accompanying attempt to build collaborative cultures.
This trend is described in a New York Times article entitled "The Challenge of Creating a Unified Organizational Strategy." The article describes the "stark reminder that all chief executives face: How do you get everyone to think of Us-- we're all on the same team--rather than thinking of colleagues in other divisions as "Them"?
The article acknowledges that it is harder to accomplish this than one would think. There is a long list of companies that have attempted a one company solution only to drop the effort when it clearly failed. In fact, our change management consulting experience suggests that it is much more difficult than re-organizing the boxes on an organizational chart. And it takes more than communicating from on-high that "we are one company."
Topping Organizational Silos
One of the missing ingredients in implementing a "one company" solution is a unified implementation approach.
There is no small irony in organizations that take multiple approaches to implementing a change where the "desired state" is a unified organization. One of the great values of having a change management methodology like AIM (the Accelerating Implementation Methodology) is that there is a common framework and a singular vocabulary that signals from the start that "we are moving from silos to one organization."
While re-organizing at the top offers an important symbolic message and first step, the fact is (as our whitepaper on Enterprise-Wide Change states) that "held captive in each silo are localized goals, bureaucracies, political dynamics, sub-cultures, and functional business processes. Topple the silo and these factors are freed to the winds of change. However, unleashing the contents of multiple silos simultaneously creates a Pandora’s Box effect that equates to a hurricane of implementation chaos."
Without a structured framework for implementation, in the majority of implementation initiatives, strategic problems aren’t solved, implementation costs far exceed budgeted estimates, and the actual ROI is very disappointing.
Clues to Implementation Success
So what does it take to implement one-company solutions and collaborative cultures? In addition to having a unified and structured implementation framework, here are some tips that our change management consultants offer-- and some of these are consistent with the advice offered in the New York Times Article:
1. Make this cultural shift a clear and sustained priority.
The article shares an example of a multi-national organization that had 3 simple, easily understood key result areas (KRA's): profitability, retention of clients, and attracting new clients. All the incentive plans are designed around these KRA's and the organization's progress toward them is totally transparent. This transparency is a critical success factor.
2. Ensure that consequences for performance are consistent with the new culture.
This is especially important for leaders at the mid to upper levels of the company who are often (mistakenly) assumed to be on board. Keep in mind, though, that these are the very individuals who have worked so hard to obtain the power and authority they now enjoy. People will note when there are consequences (positive and negative) for leaders who are or are not displaying actions consistent with a "one company" culture. The aligned actions of what is said, done, and reinforced is what drives the cultural shift.
3. Don't rely on cascading messages alone to drive a one-company culture change.
While the article notes that there is a need to "communicate relentlessly" to staff, our change management consultants advise that communication alone will not overcome the inherent toe-hold on power in the legacy organizational silos. When there is inconsistency between what leaders say, what they do and what they reinforce your organization won't see the desired change in culture.
Like other enterprise-wide changes (shared services, for example,) there is no shortage of logic in one-company solutions like last week's Microsoft restructuring. But as the article concludes, "this may be the toughest task" of Steve Ballmer's career.