Welcome to the Hand-Off Zone . . .

Hand off zone

In most organizations, On-Boarding is about HR administration and an overview of the company,  your department and function. After the required few hours, it’s into the workplace.  And may the force be with you! Very little is learned about other departments, the overall business model, and how work flows through the organization

Departments and functions are not standalone businesses, but a link in a long value chain that ends when the product is shipped (or the service is performed) and the customer pays the bill.  However, most departments focus more on their own goals and budgets than the customer. And in most cases, such an inward focus drives work behaviours.  When the focus is on meeting departmental or functional budgets, it is easy to create strong silos and ignore the overall business value chain, the customer, and revenue.

Silos are great for missiles, but not for organizations.

At one company a few years ago, the results of a silo-focus mindset was made painfully clear when the new CEO asked why the company was performing so badly:

Bill Catucci, new CEO of Canada AT&T, asked senior executives why the company was losing C$1 million per day. He heard the same reply wherever he went.  “My department is performing fine. If there’s a problem, it must be caused by someone else.”

The Enterprise Value Chain and the Hand-Off Zone

While the concept of the Enterprise Value Chain was first put forth by Michael Porter with the intent of using it to help better define business strategy, it was soon taken over by technology and used in building ERP and Salesforce automation systems.  The real value is to understand that an organization is a connected system and not a collection of separate departments and functions, each with their own internal goals and budgets. The benefit of having an “enterprise value chain” view of a company is in the ability to add value at each step, eliminate waste (usually rework or waiting time), and ensure quick and complete handoff along the chain from department to department. Get the right product to the right customer at the right time and collect payment on time.

And here is where things usually break down. The Hand-Off Zone!

When the handoff is fumbled, incomplete, or not taken seriously, mistakes happen in quality, extra time for waiting and rework is added, and business value is destroyed. It’s as simple as dropping the baton in a relay race. The baton represents the product or service and the runners the various departments or functions in the chain.

How many department leaders or function heads make communications and hand-offs with other departments a priority?

And we wonder why EBITDA is so low! Often it’s the hidden costs of lost time, rework, waiting time, and lack of communication about forecasting that are the real hidden costs incurred by a silo culture.

When was the last time you stressed the importance of the Hand-Off Zone to all employees and then mapped the value chains and the departmental hand-offs?

Want to grow EBITDA?  Focus on the Hand-Off Zone!

Written and Posted by: John R. Childress

Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid

Website: www.johnrchildress.com

e: john@johnrchildress.com
Twitter @bizjrchildress

Read John’s blog,

On Amazon: LEVERAGE: The CEO’s Guide to Corporate Culture

Read  The Economist review of LEVERAGE
Also on Amazon:   FASTBREAK: The CEO’s Guide to Strategy Execution

John also writes thriller novels!

 

 

About johnrchildress

John Childress is currently Visiting Professor in Strategy and Culture at IE Business School in Madrid and a pioneer in the field of strategy execution, culture change, executive leadership and organization effectiveness, author of several books and numerous articles on leadership, an effective public speaker and workshop facilitator for Boards and senior executive teams. In 1978 John co-founded The Senn-Delaney Leadership Consulting Group, the first international consulting firm to focus exclusively on culture change, leadership development and senior team alignment. Between 1978 and 2000 he served as its President and CEO and guided the international expansion of the company. His work with senior leadership teams has included companies in crisis (GPU Nuclear – owner of the Three Mile Island Nuclear Plants following the accident), deregulated industries (natural gas pipelines, telecommunications and the breakup of The Bell Telephone Companies), mergers and acquisitions and classic business turnaround scenarios with global organizations from the Fortune 500 and FTSE 250 ranks. He has designed and conducted consulting engagements in the US, UK, Europe, Middle East, Africa, China and Asia. Currently John is an independent advisor to CEO’s, Boards, management teams and organisations on strategy execution, corporate culture, leadership team effectiveness, business performance and executive development. John was born in the Cascade Mountains of Oregon and eventually moved to Carmel Highlands, California during most of his business career. John is a Phi Beta Kappa scholar with a BA degree (Magna cum Laude) from the University of California, a Masters Degree from Harvard University and was a PhD candidate at the University of Hawaii before deciding on a career as a business entrepreneur in the mid-70s. In 1968-69 he attended the American University of Beirut and it was there that his interest in cultures, leadership and group dynamics began to take shape. John Childress resides in London and the south of France with his family and is an avid flyfisherman, with recent trips to Alaska, the Amazon River, Tierra del Fuego, and Kamchatka in the far east of Russia. He is a trustee for Young Virtuosi, a foundation to support talented young musicians. You can reach John at john@johnrchildress.com or john.childress@theprincipiagroup.com
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