Functions are Failing – The tension between enterprise value, truth, and risk.

Glen McCracken fired me up this week with this observation that “the job is no longer to own a function. The job is to resolve the tension between value, truth, and risk”.

He was responding to some of the implications of AI, but it goes far deeper than technology. I will come back to this!

“Ownership” is an illusion. We talk about “ownership” all the time, as if it’s a good thing, but the word and the behaviours it encourages radiate “possession”.

Which is where the problem starts.

In business we don’t “OWN” anything.

It is all about “influence” not “control”. 

Accountability is good. 

Ownership? Not so much . . . (even though we have been trained to believe in ownership of organisations, projects, customers, suppliers, products, budgets etc)

Functional thinking is failing us. Marketing, Sales, Product, HR, IT, Logistics, Procurement and so on. The org chart suggests there are these neat boundaries between each function.

Functional “ownership” seems an appealing ambition as we climb the slippery corporate ladder, but it creates and reinforces “silo thinking” (as do the related KPIs) and constrains understanding, collaboration, insight, speed, customer experience and even financial performance.

Functional “ownership” is inefficient at best, and we are moving to a world of end-to-end business processes (business cycles) which is where the “value, truth and risk” actually sit . . .

These cross functional, end-to-end process / business cycles are the drivers of enterprise value.

Glen makes a great point “the job is no longer to own a function. The job is to resolve the tension between value, truth, and risk.”

This should happen with or without AI, but it is an important objective . .

He argues that functional leadership roles really represent three different types of judgement:
 – What is valuable
 – What is possible
 – What is safe

And, of course, what is in the “budget”!

Companies worked when these judgements stayed in tension.

Enter AI.

Glen points out that AI hasn’t replaced functional roles, but it has collapsed the distance between them:

• A product manager with the right tools can now build something that used to require a team of engineers
• A model can make decisions that used to be hardcoded into systems
• An “interface” can disappear entirely into a chain of actions

The old boundaries start to break.

“The NEW job is to resolve the tension between value, truth, and risk.”

• Many organisations aren’t set up for that. They’re set up for separation.
• And that’s why a lot of “AI transformations” feel impressive in meetings… and underwhelming in reality.
• Instead of adapting to AI… many organisations adapted AI to fit the org chart.
• So the org chart stays the same… and nothing fundamental changes.
• Just the language.

But this is not an AI problem. It has held us back for many years.

Now is the time to look beyond silos and functions, to the value hidden in the gaps and shadows.

The future is Bright.

The future is “End-to-End”.

“Alignment is the new speed”.

AI might just give us the nudge we need . . . 😉

You can read Glen McCracken’s thought-provoking narrative that was the cataylst for this piece, here . . . 

You can hear Michael van de Ploeg, VP of Global Business Services and Corporate Controller at Amway, describe working smarter with colleagues and stakeholders globally to create an integrated, collaborative operating model focussed on end-to-end business processes, here . . .

Credit to Tom Fishburne for the genius cartoon! 

www.marketoonist.com 

Functions are Failing – The tension between enterprise value, truth, and risk.