Tag: situational leadership

Functional Specialization Conflicts

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There are many examples of inherently competing interests which limit the application of functional specialization.

The increased specialization of countries, firms and functions has provided new net benefits, but it has also begun to generate inherent conflicts.

Greater functional specialization has increased the need for generalists who define and manage processes.

It has increased the need for other individuals to span levels, translating strategy into projects and then into operations.

It has increased the level of personal specialization to deliver more advanced technical skills, thereby increasing the costs of communication and coordination, even within similar disciplines..

It has divided those responsible for short-term and long-term success.

It has resulted in the development of competing financial and quality paradigms to coordinate operations activities.

It has generated work groups with vastly different cognitive and emotional intelligence capabilities.

Greater focus on specialized entry-level capabilities has resulted in ever greater task or people management skills, but less initial screening for situational leadership skills to balance these needs.

Greater functional specialization has made functional areas ever more stereotypical.  A given company, functional area or individual is less likely to have complementary skills in long-term/short-term analysis, divergent versus convergent thinking skills, or varied personality profiles. 

Ironically, the advance of functional specialization greatly increases the demand for specialized individuals who are generalists, able to knit together the increasing number of functional specialists.

Functional Specialization Solutions

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There are many solutions strategies that can be used to maximize the potential net benefits of functional specialization and overcome the inherent limitations.

First, processes can be defined and optimized to effectively leverage functional talents.  The mechanical and modular paradigms can be refined to incorporate specialists.

Firms can adopt a portfolio strategy whereby the average success ratio largely offsets random failures.

Specialists and generalists can trade positions to increase their effective coordination skills and understanding.

Communications meetings, technologies, experiences and priorities can improve alignment.

Process management can be elevated to a meta-analysis level, with individuals responsible for the success of prospect to customer, concept to product and order to cash processes.

Countries, states and firms can develop long-term partnerships with their suppliers and customers and improve their prospecting, bidding and negotiation skills.

Individuals can improve their situational leadership skills, learning to balance task and people needs.

Firms can greatly improve their means-ends skills, improving staff delegation, board governance and supplier management skills.

In highly diverse and risky product development areas, firms can invest in specialized firms or in competing development teams.

Firms can invest in staff members who are highly skilled in translating strategy into projects and then into operations.

Finally, firms and individuals can increase their understanding of situations where there are two inherently conflicting objectives.  They can learn from the experience of statisticians, researchers and actuaries who routinely manage the alpha risk that a predicted relationship exists when it really doesn’t against the beta risk that a relationship is found to not exist when it really does.

Functional specialization is an incredible driver of incremental value.  Countries, states, firms and individuals will be rewarded for their attention to this factor.  Common tactics can be used to maximize the value of this strategy.

Ch Ch Ch Changes

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The Baby Boomers may have digested more workplace changes (1970-2010) than any prior generation, moving from an industrial to a post-industrial, services, or virtual world.  The post-Civil War generation saw the initial transition from an agricultural to an industrial society (1880-1920).  Their grandchildren saw the full flowering of the industrial world, with incredible advances in manufacturing, transportation and communications (1920-1960). 

Nearly every usual business practice or function in 1970 has been superseded or turned upside down in the last 4 decades.

The office world of 1970 looked much like 1920.  It was hierarchical, manual and rigid.  Secretaries assisted managers.  Typing, filing, shorthand and bookkeeping were essential skills.  Today, only a few senior execs or sales staff members have administrative or executive assistants.  Everyone else completes their own clerical functions as an integral part of work.  Paper ledger forms and 10-key adding machines have been replaced by Enterprise Resource Planning (ERP) systems in even the smallest firms.  QuickBooks offers capabilities that were unimaginable in 1970.

Mainframe computers automated high volume transaction and office tasks in large firms in 1970.  Computers have since expanded to touch every function, moving through minicomputer, PC, network and cloud phases.  Sophisticated applications exist today for every function and industry, including a dozen end-user tools such as spreadsheets, databases, word processing and collaboration/time/task management.

Communications has progressed from rotary phones, party lines and PBX systems to WiFi, VOIP systems, wireless phones and personal digital assistants.  Media has progressed from AM transistor radios through 8-track and VHS tapes to disks, digital downloads, massively multiplayer games and social media entities.

Companies today pursue core competencies, partnerships and virtual structures in contrast with the old vertically integrated ideal or financial portfolios of conglomerates.  Firms are financed through a broad range of instruments and investors throughout their lives rather than with simple stocks, bonds and preferred stocks.

Companies today compete globally and engage in partnerships with suppliers, customers and competitors.  They also compete with suppliers, customers and competitors, including small entrepreneurial start-ups.

Support functions are more important today.  The Personnel function has become Human Resources.  Marketing has assumed a strategically important role in product development and sales management.  Finance is a strategic partner in decisions.  Many functions are outsourced.

Product development is managed through a gates and phases process.

Operations functions have been totally transformed.  Quality has evolved from a technical necessity to an organizing principle.  Processes shape decisions.  Variability and waste are shunned.  The near-perfection of Six Sigma is pursued and achieved.  Firms benchmark and copy best practices.  Forecast based push systems have been replaced with JIT pull systems, reducing inventories to zero and lot sizes to units of one.  Mass production has been replaced by a network of focused factories, modular manufacturing and outsourcing.

Strategic planning has migrated from an infrequent fully integrated top-down approach to an iterative  process that massages top-down and bottom-up factors within a balanced scorecard composed of assets, operations, stakeholders and final goals. 

Suppliers are managed as long-term partners, instead of short-term contractors.  Staff members are treated as partners, even though company and staff initiated turnover is much higher.  Simplistic theory X and Y approaches (employees are good or bad) have evolved into situational leadership type approaches that match task/people dimensions to current needs. 

These generic changes have occurred seen in every industry and function, layered on top of the major technical and professional progress seen in each area. We are rapidly approaching a time when virtual organizations are a reality because they are more effective than forms suited to an industrial era.  Baby Boomers have experienced this whole cycle of change and are well situated to mange the final transitions.