Why Every Corporate Division should Run like a Business

Why Every Corporate Division should Run like a Business

A puzzle of delivering “fast” with “innovation” keeps most of the mid-level managers awake at night. There might be a solution in the business like entrepreneurial approach within each division of a corporation.

Every year each division and department gets a mission and a few targets to achieve. Each group gets to define and receive approvals on their goals to ensure the alignment with the corporate mission. Once approved, folks need to report and track their progress against those set goals.

Why Business Thinking

The hypothesis is that if each department of a company runs like a business, the folks will focus on the activities on the critical path. In fact, they may have to define the actions first that fall on the critical path. As a natural tendency, prioritization process may kick in and would force folks to focus on the key objectives. The nice to have and those insignificant items would move to the bottom of the list as stretch goals. For competing priorities, if any, the teams would be required to innovate, present their case, and the option with the best rationale would win.

Benefits of Business Thinking

Self-motivation

Teams will be self-motivated. As part of the culture, the performance would determine the rewards and bonuses. The self-motivation is a crucial aspect of any business where leadership wants high performing self-motivated teams. But they fail to induce that fire in the groups down the corporate org-chart. Now would be the time when the senior management needs to show and put their money where their mouth is, i.e., not just talk-the-talk, rather walk-the-walk as well.

Healthy competition

The very nature of business thinking will induce competition. I turn it will derive agility, innovation, and creativity. There will be an inherent adoption of the agile approach of starting with a hypothesis and refining it in iterations to achieve the objectives. The nature of the framework under which the groups are operating debunks the notion that teams may go off tracks. This process tends to induce self-governance.

Collaboration

Teams will be self-conscious of the timely delivery of the final product (or service). Since the end goal is to meet the corporate mission, the teams’ success is somewhat interlinked. If team ‘A’ fails to deliver on their goals due to team ‘B,’ the team ‘B’ would fail too. In a classical sense of successful business model, the client-vendor relationship is successful if the client is happy with the delivery of the agreed product (or service) by the vendor. There lies the theory that it would trigger the phenomenon of collaboration, negotiations, and marketing of solutions among groups.

Commoditization of the Work

One has to break down the work so that the weakest link in the chain of resources can become productive. Every employee would do primary job per their strengths and would have a chance to develop and grow in other areas if they desire so. It’s every manager’s dream to have a team full of rock stars — a vision that rarely gets materialized. The sound architecture and the effective leadership at every level of the teamwork can overcome the daunting resource problem. It is not as hard as it sounds if the corporate culture is willing to foster factory-like model with business-like thinking. [I love watching movies, so here is a movie analogy.] The Brad Pitt’s movie “Moneyball” was an awesome example of how one can do great things with teamwork using everyone’s strengths, even if everyone is not an “A-grade” player.

Healthy Attrition

The following may sound orthodox, but eventually, the week links of the corporate workforce will be self-terminated. Consequently, the competitive nature of the environment will attract the kind of talent the company needs. One may argue that under pressure key resources may leave the company — that’s true, but why would they go? If it is just the work pressure — it is a blessing in disguise. If it is incompetency — it is another blessing in disguise. However, if it is due to some family or personal reasons — that would have happened anyways — it is a non-issue. In fact, the above-mentioned ‘commoditization of the work’ aspect tends to streamline the processes and removes the key person dependency.

Caveats of Business Thinking

Human Resource Issues

Among many things that could go wrong, one of the most significant challenges of this approach would be for Human Resource (HR) department. There might be some complaints on MicroTriggers®. For example, some folks may feel offended or not able to cope up with the pressure. It may sound mean, but it is about time for the HR department to come out of their comfort zone of recruiting, onboarding, and offboarding like mundane work. They better start earning their bonuses. Believe it or not, without business thinking the life is already tough out there in the corporate world. The office politics itself takes too much toll that despite all the current HR policies, folks are still burning out. The point being, in all practicality, net-net my personal belief is that the business thinking approach would not add more burden than usual regarding HR issues [I have no proof of that, but common sense tells me so – refer Healthy Attrition section above].

Domino Effect

The collaborative nature of the business thinking among various teams has an inherent risk of the domino effect of failure. If one side failed to deliver something, chances are other teams may show symptoms of failure as well. In the end, there would be a chance of impacting the overall corporate mission. However, if the agility is the name of the game, the teams will iterate multiple minimum viable products (MVP) to manage the risks under acceptable limits. The teams would know ahead of time what potential risks they are dealing with, and would have a chance to prepare for alternatives.

Foundation for Successful Business Thinking

Enterprise Architecture (EA)

The whole premise of business thinking is that the teams will be self-motivated (using performance, rewards, and incentives as the tools). However, the framework under which the teams would have to work must be defined and put forth by the EA. Almost all the problems are manageable along the way, but if the architectural foundation is weak — there always will be a risk (like a Hail Mary pass, so to speak!). The EA would act as a centralized governing body of the decentralized business units.

Cultural Change in Leadership

Senior management or executive leadership has to acknowledge and induce this cultural change. Again, they not only have to talk-the-talk, rather, walk-the-walk as well. They need to embody the behavior of corporate entrepreneurs. Their leadership needs to provide guidance and help remove cross-division conflicts, if any, promptly. They need to help reduce the bureaucracy wherever applicable. Also, the management needs to help ensure the required tools are available for teams to carry out their missions. In turn, it will help achieve the common goal of meeting the corporate mission.

Conclusion

The business thinking fosters the design thinking, agility, innovation, and creativity at its core encapsulated under the cross-division people collaboration. Moreover, it is not a new idea. There is a reason in old days folks used to refer corporate divisions and departments as business units. However, now the term “organization” is more prevalent than the term “business” in the business unit (i.e., organization unit). If the folks get back to their roots, with the improved approach based on the lessons learned across industries over the years, the hybrid approach to business thinking can do wonders.

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