Thursday, January 31, 2013
Use Cross Functional Teams to Implement Organizational Change
Use Cross Functional Teams to Implement Organizational Change
Culture change may be necessary for organizations to adapt to changing environments. If old value networks (processes, procedures, communication channels and protocols) govern, then survival in a changing market place becomes more difficult.
Old value networks are a dilemma that is the result of dated value networks becoming part of a “hard wired” approach to problem solving within the industry. These are “hard wired” in the sense that they are part of the culture and very difficult to change. "Hard wired" often times prevent the ability for organizations to innovate.
Most companies require innovations to create new revenue and profit streams for growth and long term success. Innovation is needed for developing new products or finding new markets for current products. Either approach requires new strategies and is based on innovative thinking. For new ideas to be incorporated into the “muscle” of the organization may require a “rewiring” of the "hard wired" portions of an organization’s culture.
This “rewiring” requires participation by all of the organization’s functional groups (Finance, Marketing, Sales, Production and Human Resources) and becomes difficult if it is at odds with the “hard wired” thinking.
Cross-Functional Teams at Corpus Christi Caller-Times
Cross-functional teams can provide options to “hard wired” approaches to problem solving and promote buy in across the organization.
Beginning with my first assignment to review the market position of the Corpus Christi Caller-Times and to make recommendations on actions needed, I looked to a cross-functional task group for solutions. An assignment that might change things across an organization was daunting, and it was clear to me that I did not have enough knowledge of the organization’s functions to determine the impact of any potential changes. A task group comprised of individuals from across the organization would help combat inertia from “hard wired” approaches and would allow any new approaches to appreciate organizational constraints, weaknesses and exploit organizational strengths.
Information presented to the task group showed the market was comprised of a growing number of small businesses that didn’t need and couldn’t afford to have their advertising in the newspaper, which was distributed to subscribers across south Texas.
The financial data showed the economics of running the newspaper presses. Because the presses were large and required a significant work group to run, products produced needed to be printed in substantial quantities. This meant a high variable or direct cost and would require significant revenue streams. These revenue streams would not be possible to generate from the growing number of small businesses that wanted to focus on the immediate markets around their business location.
Presented with this information and with some study of what was being done in other markets, the task group suggested that a group of limited circulation products be developed for small businesses. A local commercial printer would print these products on smaller presses. Advertising pricing would be lower due to reduced costs, and distribution would be in several zones. Each zone would cover a specific area of the city where a group of businesses and their potential customers were located.
What was revealing about the task group approach was the immediate buy-in by each of the participants into finding a solution to a business challenge. From this buy-in came real problem solving and the willingness by the representative of each functional group to take recommendations back to their people and discuss how implementation could be achieved. I again think this goes back to some of the theories on human motivation. There was no carrot or threat here; only the creation of a group that provided acceptance, status and recognition.
In the end a very successful group of products were introduced. These products allowed the Caller-Times to strengthen its market position for years to come.
Cross-Functional Teams at the Houston Chronicle
A program known as marriage mail affected the Houston advertising market. Marriage mail is a program that allows advertisers to combine their advertising circulars in one mail package and share the mail costs. Marriage Mailers, a small direct mail operation in Los Angeles, first used the concept. Advo, a direct marketer established in 1929, bought Marriage Mailers in 1979 and began rolling out the program nationwide.
Until the introduction of marriage mail, advertising circulars were primarily distributed by newspapers and represented a very profitable revenue stream. Newspapers at the time did not feel the need to lower their rates for circular distribution because they felt they had a superior delivery system. Some retailers felt otherwise and began using the marriage mail concept, and over the next 20 years, newspapers lost the majority of grocery inserts to marriage mail.
Houston had become one of ADVO’s most profitable markets to the detriment of the Houston Post and Houston Chronicle. In 1993, I was charged with creating a mail product for the Houston Chronicle that would compete with ADVO.
Since the project would require support from across the organization, I decided to create a cross functional team to put together a response. This team met every Friday morning for the remainder of my tenure at the Houston Chronicle. By early 1994, we had created a product that was delivered to newspaper subscribers in the newspaper and to the remainder of the market through the U.S. Postal Service. Due to the mix of delivery, we were able to offer full market coverage at prices less than those offered by ADVO. The program was in full swing across the Houston Market in 1995, and by late 1995 all of the key retailers had abandoned ADVO and moved to the Chronicle’s program.
The task force met each week to review the prior week’s performance and address any new issues that arose. Over the following seven years the program, which became known as ChronDirect, was embellished to allow specific address delivery at marriage mail pricing and demographic and psycho graphic market delivery programs. The production department determined how to reduce mailing and distribution costs to insure new entrants would not be able to match the service or the price. Today ChronDirect remains the most successful advertising distribution vehicle in the Houston market.
It is clear to me that no individual could have developed and implemented this program. It is also clear to me that cross functional task groups can provide real employee engagement and job satisfaction while helping the organization grow.
For me, it has been reaffirmed that the ability to change the culture of an organization must be rooted in a focus on a business outcome and implemented by cross-functional teams.