During the building of a new house some years ago, I happened to stop by the site one afternoon. As I walked through the house, I found the drywall contractor finishing his work in what would be the dining room. He had done a fine job, except for one thing -- the insulation contractor had not yet insulated the walls.
"What do you think you're doing?" I asked.
"I'm doing what I'm paid to do -- put up drywall."
"But the insulation isn't in the walls yet!" I complained.
"That's not my problem," he replied. "I'm being paid to do the drywall."
This contractor measured his work by how good a job he did on the drywall, whether the work was done on time, and whether he made his profit. In doing his job, he did not consider how his work fit into the overall plans for the house -- he didn't care whether the walls were insulated or not.
Similarly, in high-technology companies, design engineers traditionally measure their work by the elegance of their designs, whether the design of a new product include all of the latest technological advances. Their product designs may win industry awards, but if a product is not what the customer wants, if it is loaded with features than raise costs but that few customers will ever use, there is little point to the design exercise.
"Functional myopia" exists when an organization -- or a person -- becomes so focused on its local or group goals and standards that it loses sight of the overall goals of the company. No individual or group is exempt from this syndrome, from the petty-cash clerk to the legal department to the engineering manager to the sales person to the drywall contractor. I'm sure that you have experienced, and been frustrated by, the functional myopia of many people and groups you deal with daily in your personal and professional lives.
Functional myopia can undermine any and all company efforts at transformation or renewal. At best, it can slow progress toward company goals. At worst, those goals may not be reached at all. If I had not happened to visit the building site on that day, I wouldn't have known that anything was wrong until I noticed how cold the dining room was during the winter. In the case of the high-tech manufacturer, the myopia of design engineers often results in products that customers don't want or that are priced so high they are noncompetitive in the market. Functional myopia can subvert the best-laid plans of any organization. For example:
* The purchasing department, in seeking the lowest-cost supplier (its traditional measure of performance), may overlook product quality or timeliness of delivery, thereby foiling the company's attempts to improve quality or reduce time to market.
* The materials manager in one factory may hoard a key material so that it is always in stock locally, even while another of the company's factories may have to shut down for several weeks because of a shortage of that material.
* The legal department may hold up a key industry alliance for months, arguing with the other company's over minor, inconsequential wording changes in the partnership agreement.
* The training department may stall sales of a new product by sticking so rigorously to its standards for course development that training is not available on the new product until six months after it is ready to ship.
The list of ways in which functional myopia can hurt organizations is endless. But if everyone is working for the same company, how does functional myopia happen?
The Roots of Functional Myopia
New companies don't suffer from functional myopia. In a startup company, there is a small group of entrepreneurs who work together constantly with a united purpose -- to develop that first product or service and sell it. But as the startup grows, the small initial group expands, and with that expansion comes functional specialization. As each function expands, departments become larger, and the focus tends to narrow to the work of the department, with employees often losing sight of the company's overall goals. Research, design, manufacture, marketing, and service become sequential activities, with each group waiting for the previous group to finish its work before passing it on. Functional myopia stems from three basis roots:
CULTURAL ROOTS - Cultural issues, dealing with the norms of behavior for the overall corporation and for individual functions and organizations within the company, can take many forms. They may appear as stereotypes of various functions, some traceable to long-standing rivalries, others to actual differences in status as reflected in salary scales and perquisites, such as office size. Each profession has its own standards by which it measures the quality of its work. At the most simple level, one could say that design engineers are measured on the elegance and performance of their designs, manufacturing on how inexpensively a product can be made, service engineers on "mean time to repair," purchasing people on getting the lowest prices from suppliers, and so forth. These goals are often in conflict with each other. For example, a design feature may boost performance but also increase manufacturing cost, or a certain method of manufacture may lower production costs but increase servicing costs. Resolution of such conflicts cannot always be made on the basis of objective technical criteria. More often, it is a political process, where politics is defined as "the art of the possible."
ORGANIZATIONAL ROOTS - Many manufacturing companies have grown up as hierarchies in which each function has its own department, and communications between the functions take place primarily at the tops of the respective departments -- the vice presidents of engineering and manufacturing may meet regularly to discuss issues, but managers and individual contributors lower in their groups don't often confer. These are commonly called "stovepipe" organizations. Because members of each organization cannot see beyond their respective stovepipes, their focus is local or myopic. To succeed, they must adhere to the standards and practices of their respective functions. Even if they thought that there would be some benefit from working more closely with their counterparts in other functions, the boundaries of their respective stovepipes bar this from happening: "Just do your own work and let the other department worry about theirs."
ADMINISTRATIVE ROOTS - Because companies are oriented to the achievements of individuals, there may actually be disincentives for most employees to remove their functional blinders. "If my performance and salary reviews are based on the standards and goals of my own organization, I had better make certain that I play by the rules." So trying to cooperate across functions or organizations can actually result in a poorer performance review, even if it is better for the overall goals of the company.
Correcting Functional Myopia
Given the root causes of functional myopia, how can organizations overcome these barriers to get employees at all levels to work together, to consider the larger picture, and to optimize overall company results, rather than individual, functional goals? Functional myopia can be overcome only addressing all three root causes. To accomplish this, a three-pronged approach is required:
EDUCATION AND TRAINING programs can help to overcome cultural barriers and to develop cross-functional teamwork. Charting business processes to understand how each group's work is codependent on other groups' work is a good place to start.
Changes in ORGANIZATIONAL DESIGN can help to eliminate stovepipes and open up lines of communication across functions and groups.
Changes in ADMINISTRATIVE POLICIES AND PROCEDURES to tie individual measurements and rewards more closely to overall company goals can help people focus more on helping the company as a whole to reach its goals.
To correct functional myopia, organizations must examine their economic value chains, both internal and external, in order to maximize overall productivity and profitability. When functions operate only to maximize their local goals, they lose sight of the larger picture and often make decisions that cannot be justified in the larger context.
Please contact Dan Tobin with your reactions to or comments on this article.