Functions within an organization can often take on an interesting dynamic. While they have immense capacity to influence the customer experience as well as the general welfare of the company, no one chooses to do business with a company based solely on the work or services of a function. Whether it is HR, finance, IT, or any other, the sole purpose of a function in most organizations is to support the organization as it strives to differentiate in the marketplace. Most people within a function are aware of their supportive role; however, many functions have built up disciplines that have become full-on professions themselves. This can sometimes create friction within the organization.
While it is a good thing for employees to take pride in their skill and expertise, these strengths must be used in alignment with the organization’s strategy to bring about true benefit. It’s easy for people working in a function to start to second-guess the company’s needs from their own function-centric vantage point. Without fully understanding the strategy of the organization, they will sometimes take on projects or initiatives or set priorities that are not essential to the organization’s goals.
Functional Funding Days
It’s not uncommon for business leaders to get frustrated at functions when they try to build something the organization doesn’t need or want. And with good reason: such projects and initiatives consume time and resources, and ultimately become nothing more than a distraction. However, it’s also important to acknowledge and encourage people’s desire to contribute, and to leverage their professional expertise in ways that benefit the organization. One way to do this is to encourage functions to use Agile ways of working in deciding what initiatives to pursue.
We are aware of at least one large retailer that has been taking this approach with some of their internal functions. Rather than spending a lot of time and energy developing and then asking for funding for ideas that may or may not mesh with the needs of the organization, the function holds periodic funding days, somewhat like a business expo with venture capitalists. At these events, individuals and groups within the function are able to show their ideas and explain what they’re thinking about doing and why they feel it is a good idea. The organization’s leaders can then walk the floor, talk directly to the innovators within the function, see the percolating ideas and concepts, and decide what to fund.
This type of entrepreneurial approach encourages innovation within the company. The events generate a lot of buzz, and people start to get excited about ideas. Leaders like it a lot, too. It allows them to preview a lot of potentially innovative ideas at once that have been developed in an Agile fashion, and to tell people what matters to them and what they’re willing to support. Also, the feedback people within the function receive from leaders and peers helps them learn and better understand what sorts of ideas the organization values.
A 3-Tiered System for Evaluating Functional Project Ideas
Using a mechanism like the one described above requires having some guidelines for evaluating and choosing the best ideas. Consider the following categories for sorting and prioritizing ideas:
- The first category is for clear winners, which get funded as appropriate.
- The second category is for those ideas which generate little attention and/or are clearly not in the best interests of the company, and will be denied funding.
- Everything else falls into the third category. These are projects which have a good core idea, but which may need some tweaking or developing to become worthy of funding. Innovators of those projects are encouraged to keep working on their ideas and present them again for re-evaluation at the next funding day.
This company has enjoyed so much success with the funding day approach that they are expanding the practice within the organization.
Leveraging Agile Ways of Working to Benefit Functions and Organizations
Similar entrepreneurial and Agile approaches have been very effective in the venture capital arena and in other industries for a long time. While it may be too early to tell what the long term effects of taking this approach may be on a company’s overall profitability, so far there is strong evidence that incorporating Agile ways of working in corporate functions can go a long way towards increasing innovation and improving the focus of development efforts in functions, as well as keeping functional projects and initiatives well aligned with corporate strategy.
