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NEWSLETTER

Division of Labor, Unity of Purpose

September 13, 2011

So often in our attempts to get on the same page, we overlook the fact that organizations—like books—have many different pages. It’s how all of the pages combine to create the entire book, or the entire organization, that is most important. In your company (and most others), the various functions and departments (the pages) have different areas of focus, specific divisions of labor. But when they work together, they should all have unity of purpose.

The chart below shows some of the key functions that exist in many organizations and the drivers they usually focus on.

 

It’s entirely appropriate for different functions to focus on the 5 Key Drivers in different ways at different times. But with this focus, they need to make sure they are not sub-optimizing the whole. They must continually see the big picture and understand how their actions are affecting all of the drivers (cash, profit, assets, growth & people). You can see from the chart above that most senior leaders and CEOs of public companies focus primarily on growth and profit, as these tend to drive stock prices higher. You will often hear CEOs state that the goal of the company is something like “To build a profitable, growing, and enduring company.”

It seems simple when presented, but not so obvious in daily practice. When you talk with people in other departments, look at the issue or topic at hand from their perspective and from their functional responsibility. One of the most important applications of business acumen is communicating with colleagues from other departments on the basis of what’s important to them. When a human resources officer speaks with a finance manager about a key initiative, talking about employee satisfaction might result in impatient yawns. However, discussing cost of capital, return on investment, and the expense reductions realized from the initiative will get the finance manager’s attention. If you connect with what’s important to people in other departments, they’ll pay more attention to your ideas.