SBA

Tribal Warfare at Work

When the Chairman emailed the board requesting performance improvement suggestions, my reply was simply two words - "Tribal Warfare". This captured his imagination, at the next board meeting he siezed on my words eagerly and to my horror, having entirely misinterpreted my meaning, outlined his ideas for inter-departmental competition within the business.

You need to be aware that I'm a strong believer in horizontal integration within business; I think that allowing departmental and functional silos to develop is unwise. Silo-ization allows the staff within silos to focus inwards on their departments' functions instead of outwards to their connections in the value creation chain which serves the customer. In that context the Chairman's interpretation of my suggestion was an anathema, I had imagined engendering a culture of united struggle against our competitors, our tribe against the upstarts who would steal our business, not some scheme that would reinforce the internal barriers between Sales, Service, Accounts, Distribution etc.. I voiced my disquiet, but the Chairman had the bit between his teeth!

So how did it work out? We set about creating an incentive scheme to run for three months, based on inter-departmental competition, with weekly, monthly and real-time performance reporting displayed via the company intranet and on wall displays around the offices. Obviously defining the performance metrics was tricky - how to define the value of different functional contributions to the business such that the other departments would see them as fair and comparable measures. Department A would claim that Department C's measures were too easy etc., but we eventually created a set of customer-focused indicators that everyone could accept, with each departmental / functional manager accepting responsibility for their teams performance. We reinforced the scheme with generous prizes and recognition for the weekly, monthly and overall winning teams.

As one would expect, the various departmental teams, or tribes, pulled together, with stronger performing team members driving, encouraging and helping the weaker members to lift their performances and thus the overall performance of the team. Departmental unity and effectiveness was clearly enhanced. The business reaped immediate reward through employees' increased attention to the customer-focused metrics we had set, elevating these above the run of the mill process execution measures that they used to guide their work, so customers benefited measurably. It all looked good.

But what of my concerns about the effect it would have in reinforcing silos? This, for me, is where it gets interesting.

One of the effects of the way we ran the incentive, with real-time and regular periodic reporting and interim weekly and monthly rewards, was to cause the various tribes to look outwards at their neighbouring and rival departments. In actively competing with them their interdependencies were thrown into the spotlight. Where Department C was inhibited in achieving optimal performance by failings in Department A, issues which would previously have been the province of the department managers to resolve became the concern of the whole team. Responsibility was driven downwards to "the shop floor", and inter-departmental cooperation was improved in the struggle to compete. Staff became more aware of their dependence on their colleagues from other parts of the business to perform well. The weekly and monthly gatherings for the presentation of the incentive awards, at the end of each Friday afternoon with a drink and nibbles, brought all of our employees together, in their tribal groups, with a cheerful atmosphere of competition and much ribbing and joshing as the winners and losers collected their rewards. The cohesiveness of the whole organisation was reinforced and horizontal integration improved, counter-intuitively, by an incentive scheme that set departments into competition against each other. My fears of increased silo-ization were unfounded.

So what did we learn?

• Incentives need frequent & preferably real-time performance reporting
• Inter-departmental competition can improve horizontal business integration
• Team incentives lift individuals performances and improve team cooperation
• Regular celebratory occasions including all employees improve staff unity
• Performance metrics must be customer-focused not process-centric

Competition is almost always good for business, it raises performance and leads to improved customer value. This applies internally to an organisation as well as externally. Often, as we struggle to improve the performance of our businesses, we focus on process efficiency and effectiveness, solving problems and breaking barriers "top down", but a well designed incentive scheme can achieve lasting performance improvements "bottom up". By encouraging staff to see their roles in the context of their place in the customer value chain, instead of in the business process, we can encourage shop floor innovation that staff design, buy into, and sustain to create enduring improvements in our organisational performance.

Of course January is a great time to launch an incentive programme, it helps to kick start the organisation back into life after the festive break, building a foundation for sustained performance improvement through the year.


(As published in the Isle of Man Examiner, 12th Jan 2010 )