Break Down Silos to Solve Your Company’s Top Challenges and Drive Greater Profitability This Year
TBM Consulting Group Europe’s Managing Director of Operations, Robert Vrugtman, dives beneath the surface of manufacturing challenges to better explain how they evolve, how workplace silos exacerbate the issues, and how good operations process controls can help resolve and prevent one your biggest operational headaches.
Your Biggest Challenge Runs Deeper Than You Think
In a recent LinkedIn survey by TBM Consulting Group Europe, 50 European manufacturers responded to the “single biggest challenge” question by highlighting sourcing as the most common culprit, followed by organizational capabilities, sales, and manufacturing performance/productivity.
While a manufacturer’s most acute pain point usually manifests around one specific area, it almost always is a symptom of a much deeper organization-wide issue. However, business leaders cannot see or solve the widespread issue due to the multitude of barriers and complexities hampering their resolve.
The real challenge lies in the silo conundrum.
Sales, procurement, and manufacturing typically operate autonomously within their own reporting structures. They tend to communicate, interact, and exchange only through conditionality. Leaders fail to coordinate efforts beyond their own domains, synergize, and reflect on the bigger picture, which often fosters a blaming culture.
As a real-world example, a major gas company was experiencing what it believed to be a performance problem on its oil platforms. During a typical nine-hour shift, the company was recording only two hours of hands-on tool time per employee. But the root cause of the inefficiency was not the lack of capacity, training, motivation, or non-engagement. Instead, it lay in communication and the failure to plan accordingly and align the various functions to ensure the right people with the right skillsets were made available in the right business context at the right time. By diagnosing the misalignment and addressing the underlying issues, the company was able to more than double hands-on tool time, saving billions in contractual and logistical costs.
Establish cross-functional operational process controls to cut across silos.
Operational process controls provide formalized structure for cross departmental communication and sharing data-driven information that aligns the entire organization, establishes accountability channels, and ensures business area optimization. Ultimately, good operational process controls promote Precision of Execution within the organization.
Here’s how to quicky integrate operational process controls and start driving net profits within a year:
- Commit to eliminating the silos. Experts are hired for area-specific skills, and it is to be expected that they want to focus on what they do best. The CFO wants to cut costs by eliminating extensive training for positions with high attrition. But the COO sees a need for more investment to keep people onboard. The most effective leaders are the ones who are willing to check their egos at the door, listen to each other, and collectively identify where the real barriers and opportunities for improvement lie.
- Perform a diagnostic to identify root causes and interconnections. Nine times out of 10, the issue you think is your biggest challenge is just the tip of a much larger iceberg that spans many areas of the organization. An end-to-end diagnostic that dives deep into the data and maps the interconnections between different divisions can be completed in a matter of weeks, providing the big picture outlook to make better organization-wide business decisions and understand the ensuing implications of such decisions on each department.
- Design and implement multiple workstreams. It is often impossible to fix one issue without addressing other contributing factors outside of the domain. This can be particularly true with planning challenges where internal organizational capabilities and reporting structure nuances can lead to external complications. With any improvement initiative, it is important to ensure that the right people, with the proper training and skills, are assigned in the areas where they can provide most value with a formalized practice to measure success, attainment to plan, and adherence to compliance requirements.
- Establish processes for ongoing collaboration. Manufacturers hoping to sustain and build on gains need to be diligent about keeping silos from reemerging. Regular formalized cross-functional meetings are key to reflecting on the track record and collectively setting goals, designating responsibilities, and establishing accountabilities channels for the entire organization.
- Get support from change management experts. While companies can successfully put operational process controls into place and begin benefiting from the results in a matter of months, breaking down silos and fostering collaboration between departments represents a major cultural change. Those that are most successful rely on established external change management expertise and a neutral, third-party perspective to objectively oversee the work. A change management consultant can work alongside the manufacturing leaders across departments to make sure the work stays on track and delivers the anticipated benefits in the shortest amount of time.
Be your best as an organization, not just a department.
Whether you think sourcing, sales, manufacturing, or organizational capabilities is your biggest challenge, the real problem is the barriers between departments and functions. A siloed approach will continue to hamstring your business and unnecessarily increase costs, whilst preventing the performance gains you need to remain competitive. Make 2023 the year you commit to putting operational process controls in place and unifying all areas of your organization around shared success.
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