Most organizations of size employ alliance managers to facilitate their external strategic alliances. Yet, too frequently little attention is paid to internal partnering. When it is, generally it is the HR department that is charged with the task of improving interdepartmental relationships. And, too frequently, HR does not have the authority to do what needs to be done.
Recently, I was doing work for a manufacturer of considerable size. They desired alliance instruction for both external and internal applications. After some investigation, it became clear to me that there were two elements within the culture of the manufacturer that stood between where they were, and where they wanted to be.
Two Impediments to Successful Alliance Development
The first impediment was deeply ingrained into the organization’s DNA. It was the “Good Old Boy” dynamic. This is quite common in organizations that have been around for some time. It is human nature to want to work with people, with whom one is comfortable—regardless of the fact that there might be someone newer to the organization that is better equipped to perform particular tasks.
Second is the method of compensation for division head executive vice presidents. If the EVP is rewarded solely on the performance of his or her division, there is a strong disincentive to cooperate, much less collaborate, with other divisions or business units.
Good Old Boys Don’t Collaborate
A hugely valuable element of alliances is the differences that partners bring to the table. These differences are generally apparent in the core competencies of an organization, division, or person. It is the differences that create value, not the similarities. However, when we leave decisions to the sole domain of the “Good ‘ol Boys,” they are less concerned with developing total organizational value than they are in working with persons with whom they are comfortable. Desire for comfort first, clouds their judgment in selecting others that can deliver innovative value. The result is organizational lethargy and discontentment in the ranks.
Division Heads that Can’t Partner
Where’s the incentive to build collaborative internal relationships between business units if the sole measurement for success is single unit performance and profitability? Who’s going to give a rat’s behind about the performance of other business units in an organization unless there is some sort of financial consequences? When there is no interrelationship, there is no motivation to collaborate.
What’s a CEO to Do?
In my opinion, the first step is to rearrange the financial motivation of business unit heads. Sure, part of their compensation should be related directly to their division or business unit, and a large part should be tied into the organization’s total performance and profitability. Now there is true motivation for internal partnering and alliance building.
Now, dismantling the “Good Old Boys” network is a bit trickier. While you, the CEO, have a great desire not to micromanage, you none-the-less have to put policies into place to better assure the very best person is put into new positions of authority. Otherwise, you will have a constant turnstile of executives coming and going. If persons that are truly qualified to climb the corporate ladder only see the boss’ buddies getting the promotions, they will not last long. Hence, the brain drain will be alive and well in your organization.
Policies to thwart the “Good Old Boys” include those that help justify promotions. Your organization, written or not, has desirable qualities that are preferred in supervisors, middle managers, division heads and EVPs. But, do you have measurement vehicles that help the truly qualified to rise above the rest? These personnel measurement vehicles “urge” the Good Old Boys to select the correct person for the promotion over just those with whom executives are most comfortable. Comfort or performance, the choice is yours.
Ed is the Founder and CEO of the 501(c)(3) non-profit public charity, Cigar PEG Philanthropy through Fun, and president at Rigsbee Research which conducts qualitative member ROI research and consulting for associations and societies. He has been called “the dynamite that broke up our log jam” by association executives—rarely politically correct and almost always provocative—and from a dozen years as a United States Soccer Federation referee, Ed calls it the way he sees it. Exceptional resources at www.rigsbee.com.