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The traditional line organization is unable to manage cross-functional processes

19 February, 2016

Anchor Management

The traditional line organization and its way to manage a business has existed since the beginning of industrialization. Through centuries, experience has been gathered in how to manage a large organization through the division into functions, product areas, geographies and customers. During the last few decades, many organizations have acknowledged the importance of managing cross-functional processes, oftentimes “from customer to customer”, in order to optimize the entire business from a customer perspective.

Even if this approach feels intuitively correct, problems oftentimes arise, since the approach challenges the traditional line organization. In an attempt to manage the two dimensions simultaneously, sometimes process owners are appointed. Their task is to manage the cross-functional process through the various parts of the organization. These process owners rarely have any formal power, however. The line managers still manage the people, decide salary and raises, promote individuals, etc. In the light of this, it is easy to realize who gets the short end of the stick in case of a conflict between the line and the cross-functional process.

To really enable the management of cross-functional flows, you have to start from the top. The most important processes in the organization, e.g. product development and “order to cash” must have a champion in executive management, who manages these processes throughout the entire organization. Moreover, crucial areas of responsibility have to be appointed to line managers and process owners, respectively. In particular, it is important to identify who is responsible for identifying the need for improvement, and eventually follows up that the solution had the expected business effect. This is not necessarily the same role as the one or those responsible for developing a solution, deploying it in the organization, and eventually ensuring that the solution is used in the business.

Without ensuring that the cross-functional management has executive support, and without clear responsibilities between the line organization and the cross-functional process management, all activities related to cross-functional processes will inevitably be merely a facade, without having the least effect on business results.