In any business function, there are a number of components that are necessary for the success of the function, many of which we take for granted. I want to argue today that there are at least four significant components to any business function, especially those where a team or workgroup are involved.
The four significant components are:
Here’s an example for context: Think about sales management and CRM. Most firms of any size now manage their distributed sales force using a combination of methodology, process and software. The methodology is the training and the sales approach, usually based on some great thinking from authors or consultants like Miller Heiman or Strategic Selling. These methodologies and the type of sale required lead to a process. Most firms track sales processes as “Lead, Prospect, Opportunity, Qualification, Win” or something similar to that. Each stage has a set of actions and determinants. The process is used by everyone and is consistent across the team. CRM or other software supports and enables the process, by providing a common data infrastructure that’s integrated and allows anyone to evaluate the progress against the process. Finally, sales management uses its culture to motivate and compensate the sales representatives to achieve their goals. Through a means of corporate influence, sales management and personal compensation, the culture reinforces the goals of the organization.
Are any of these components more important than the other? In a small organization or team, the software may be as simple as a shared folder or Excel spreadsheet, but the data management is still required. Often you’ll find that processes are informal and not defined, but rigidly enforced. In firms where one factor is missing, other factors overcompensate to adjust.
I’ll argue that culture is probably the most important of the factors, since a firm can have a great process and powerful software that is never used, due to the fact that the culture does not reinforce the use of the process or software. I can, through sheer power of will, force people to improve a business process with few tools or processes if the culture is strong enough. Southwest Airlines used to be a great example of that. There were no process manuals and few software applications, just a corporate culture so strong that it would ultimately prevail.
But in a great performing organization, each factor – methodology, process, software and culture – work together and are equally important to the success of the function. When one or more of these factors is missing or not considered an equal to the others, the function will falter. To continue the CRM example, early CRM “failures” were not failures of the software or of the business process, they were failures built by low expectations or no cultural reinforcement, proving once again that 1) culture is the strongest of the factors and 2) a perfect software system and a perfect process cannot compensate for the lack of cultural reinforcement.
Today, many firms want to be “innovative”, yet they lack software tools and defined processes. In some cases the culture may overcome these hurdles. However, that requires a consistent understanding of the importance of innovation and what it means throughout the organization. In the absence of all of these factors, innovation (or any function) will falter until the factors exist in an equal balance.
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