Six Organizational Models to Create and Deliver Solutions

You’d be hard-pressed to find an executive in the B2B space who wouldn’t claim that his company is focused on providing solutions to their customer base.  Of course they feel that way – why would they be in business if it weren’t to solve a customer’s problem?

If you ask a company more questions, however, you might find that what they say and how they operate might be in conflict.  Here are a few follow-up questions:

• Do you sell highly integrated services and product offerings?  Are they sold by the same sales person?
• Are your human and technology resources easily shared across your BU’s?
• Do your customers see and understand how your full slate of resources can address their challenges, or do they typically deal with individual BU representatives?

As a reminder, we look at solutions the same way that ITSMA’s Solutions Council defined it a number of years ago:

A solution is a combination of products and/or services with intellectual capital, focused on a particular customer problem, which drives measurable business value.

The Problem – Internal Siloes

Our studies have shown that, in spite of their marketing, too many companies are still operate in a “siloed” fashion.  The services delivery and marketing teams operate independently from the product teams.   In fact, it is quite common to see the various product groups, whose offerings can often be sold and implemented as complementary components of an overall solution, operate independently with concern only for their own P&L.  This also is a common occurrence when a company has divided its services into separate P&L’s.

How can companies overcome these artificial internal barriers?

Managing for Better Collaboration and Integration

In most organizations, siloed Business Units is a very positive organization structure.  By having each BU be responsible for its own P&L, there is clear responsibility and accountability for performance.  Blowing up the silos is usually not a productive answer to better internal collaboration.   The better approach is to find a way to create bridges across the silos so that integration and communication can take place when and where it is appropriate to combine BU resources for the benefit of the customer. 

Building these silo-to-silo bridges can be tricky business.  Some of the levers that are available to management are a change in incentives across the BU’s, a focus on changing the corporate culture to be more collaborative, and a change in staff to employees that are more willing to collaborate.  None of these shifts require organizational changes.

Ultimately, however, we have found that organizational change is required in most situations if a company is looking for a more effective, permanent fix to the problem of “stovepiped” BU’s.  We have identified 6 organizational changes that companies have made in order to be able bridge across existing silos.  Some of the changes are frankly cosmetic, while others require massive internal restructuring.

The six models that we have identified are:

 

Our Recommendation

We’ve seen all six of these models be employed by companies in the technology space at varying levels of success.  Some companies have been very successful – i.e., Cisco’s Solutions Council – while others either applied the wrong fix or were overambitious – i.e., HP’s attempt to transform the entire organization to a “front office-back office” model. 

Our recommendation is quite simple – follow a 3-step process before pulling the trigger and making any changes:

1. Understand the problem -- Make sure you understand what the collaboration and integration problems are and why they exist.
2. Be sure the organization change you envision will address the problem -- Be confident that, if you are successful in making the changes, you will be more customer focused and will be able to build out real solutions more economically and efficiently.  We suggest that you choose the model that is the least disruptive and still gets you the results you need.
3. Make sure that it’s actually doable – given your culture, existing business and management structure, will you be able to actually make the changes you feel need to be made?

Organization change is often not for the faint of heart – it can be a long, painful, emotional process, with resistance to change guaranteed.  Be sure you’re doing it the right way, and for the right reasons.  It’s hard work, but definitely worth it in the end.