The findings from the third of our four mini-surveys dedicated to my upcoming book, The Integration Imperative, are now available here. In this mini-survey, we asked PSFs how well they are doing at creating formal working relationships between Marketing, Business Development and other operational functions like HR, IT, Finance, Legal and more.
On this issue, unfortunately, for most of our survey’s PSFs, silo’ed thinking and inertia still rule the day. But there is strong evidence of increased effort, both culturally and structurally, to formalize the working relationships among Marketing, Business Development and other operational functions.
And even though most of our survey’s PSFs don’t compensate and/or reward their operational functions for collaborating and sharing accountabilities, there appears to be a dawning awareness that formal functional integration does offer substantive marketplace benefits. “[We] . . . firmly believe that our accountability process has made us more profitable and more focused in our actions.”
Here's my analysis of the findings on the survey's 3 questions:
Q1 In the last three years, has your PSF deliberately structured new formal relationships, reporting lines and/or shared accountabilities between Marketing / Business Development and other functions, including HR, IT, Finance, Legal and more?
A simple review of Question 1’s quantitative answers yields a great big yawn. Together, the "Strongly Agree" and "Agree" responses equal 43 percent. These responses are offset by "Disagree" and "Strongly Disagree" responses that total 56 percent. From this, it's hard to tell what's really happening backstage about how well professional service firms’ Marketing and Business Development functions are working with other PSF operational functions.
The real indicator of what's happening lies in the respondents’ comments (download survey here). Collaborating by "communicating" is hot, and it's a relatively astute early step toward more effective integration among PSF Marketing, Business Development and other operations. But only a few respondents reported progress on what I believe are the higher impact forms of functional integration: recognized shared accountabilities; co-developed job descriptions; clearly delineated reporting relationships; and organizationally supported performance goals.
Now I’m not an expert in organization dynamics, compensation programs or change management. Nevertheless, regarding the concept of "formality" in a PSF’s organizational activities, I’ve developed some distinct points of view, shaped over many years of research. In my opinion, the vast majority of PSF growth and marketing endeavors are “informal” processes that typically commence among proactive individuals who have enough professional bravery to start a new way of working together. But it is only once a PSF’s leaders require some kind of enterprise-wide reporting, documentation or acknowledged shared accountability that growth and marketing endeavors become "formal."
In my opinion, it is only by formally integrating operational functions with Marketing and Business Development that the enterprise can truly gain marketplace traction.
For me, then, the big "aha" of this quick survey relates to the way respondents interpreted the word "formal," whether cultural (commonly understood behavioral norms throughout the firm) or structural (enterprise wide processes, procedures or protocols).
If you read quickly through all the comments, you could easily conclude that informality and a lack of structure is the overarching paradigm, regardless of the grouping into which respondents assigned their firms. Some respondents protested the need for any kind of structural formality (“We are small enough that we know what everyone is doing”). Others downplayed the need for structure, saying that cultural formality exists in its place. (For example: “We have a strong working relationship with our Finance department personnel . . .;” “everybody understands what’s going on and the level of collaboration is fairly high;” and “We work closely with HR”).
But take a closer look at the theme running through the comments. There is strong evidence of increased effort -- both culturally and structurally -- to formalize the working relationships between PSF Marketing / Business Development and other operational functions. These efforts fall into two categories.
- Communication. A number of respondents are building collaboration and shared accountability through well-recognized communication vehicles. Several respondents made references to regularly-scheduled meetings, often chaired by a leader in the C-suite.
- New policies, assignments and shared objectives. Watch for words that are “code” for formality (I’ve underlined them for you): “Legal, IT, Finance each have a point person assigned to Marketing.” “Marketing handles entry-level recruiting.” “Technology group has designated a ‘Marketing Technology Specialist.’” Reports are another piece of evidence for formality. One respondent described the reports generated by Marketing and Finance; these are obvious manifestations of shared accountabilities between Marketing and other operational functions.
Some respondents reported that they are formalizing the working relationship between just Marketing and Business Development (and not other operational functions). Even though the scope of this quick survey was broader than just these two functions, certainly we give these respondents credit for taking this step.
But no respondents -- even those who answered “Strongly Agree” to this question -- replied that their firms have taken the ultimate structural step of creating new reporting lines or recognized shared accountabilities among Marketing/Business Development and other operational functions. In other words, while these PSFs appeared comfortable acknowledging their expectation that these operational functions should collaborate, they stopped short of evolving these collaborations further, into formally shared accountabilities.
And so, with these quick survey findings, we begin to see that PSFs’ pathways toward more effective Marketing and Business Development lie with more formal integration of the operational functions that touch Marketing and Business Development. PSFs will start their journey as many of our respondents have, by encouraging collaboration, often in the form of communication.
But I believe these “good ideas” will be eventually deemed as just too shallow. Once PSFs begin seeing the positive results from collaboration among operational functions, their enthusiasm will begin to pick up speed, and they will shift gears into developing more explicit and more formally outlined shared accountabilities. They will support these integrated functions with organizationally sanctioned incentives, rewards, recognized shared accountabilities and/or co-developed job descriptions.
Q2: Regardless of how you answered Q1, does your PSF compensate and reward its operational functions (HR, IT, Finance, Legal and more) for collaborating and sharing accountabilities on Marketing / Business Development?
Only 32 percent replied “Strongly Agree” or “Agree;” the rest (a whopping 68 percent) said, essentially, “No, we don't compensate and/or reward our operational functions for collaborating and sharing accountabilities regarding working with Marketing and Business Development.”
It’s always the same: when money gets mentioned, a person’s or a culture’s real stripes begin to show. And the answers to this question (download survey here), more than those for Question 1, show the deep philosophical underpinnings of how a PSF’s internal operations work together with Marketing and Business Development.
First, do we share “success” with our colleagues, or not? Some firms take a fairly dry view of this issue: “Hey, we give you a salary and (maybe) allow you to share a piece of the firm’s profit at the end of a year. You shouldn’t need additional motivation!” There are numerous corollaries to this point of view, but the theme remains the same: “We won’t reward you for the basic behaviors you’re supposed to display.”
A second issue is about the structure an organization might need in order to reward for desired behaviors. The notion of structure inevitably raises the specter of measurement. It’s clear that some of these PSF respondents are ready to do the work that measurement requires, but that they’d rather do it simply: compensate and reward for overall teamwork (achievement on functional collaboration and shared accountabilities regarding Marketing and Business Development), rather than go to the effort of unbundling the specific behaviors or accomplishments. There’s possibly something culturally astute about not rewarding individual effort within these many functions. Indeed, once a firm sets the accountabilities or formal collaboration guidelines between Marketing, Business Development or any other operational function, why get into smaller and more detailed achievement points?
I’ve already acknowledged I’m no human resources or compensation expert, but I can’t help but ask: isn’t it better to have formal expectations, and to formally recognize the achievement of those formal expectations, especially regarding mission–critical initiatives? Isn’t it critical for any PSF to get its operational act together regarding having every function work optimally with Marketing and Business Development?
Isn't this the exact place where structure should formally support cultural expectations? If PSFs are so good at compensating and articulating formal expectations for revenue generators to sell their firms’ services, why are they not applying a related set of expectations that operational functions should work with the utmost collaboration and shared accountabilities for Marketing and Business Development?
I’ll bet I’m not the only one thinking about these issues. Even despite these low percentages, I wager we’ll soon see more PSFs compensating and rewarding their operational functions (HR, IT, Finance, Legal and more) for collaborating and sharing accountabilities on Marketing / Business Development.
Q3: How’s the effort going?
Only 24 percent of respondents (download survey here) think their PSFs’ efforts are “absolutely fantastic so far” on rewarding and compensating operational and Marketing / Business Development functions for formal collaboration with each other. More than 75 percent answered this question otherwise, with the most enthusiastic being a bland “it’s ok so far.” Talk about a lukewarm endorsement!
Nevertheless, a few respondents offered glimpses of what I believe will be the future for professional service firms:
“By sharing all relevant information on a regular basis and in a defined manner, we have been able to improve our firm's ability to react quickly and with flexibility to changes in the business and economic landscape. Removing the silos that formerly housed the IT, HR, Finance, Operations and Marketing functions has resulted in improved project management, staffing, planning and profitability.”
It's hard to miss the intention, focus and deliberate commitment behind these remarks. One respondent remarked on the benefits of moving toward formalization, saying that his firm’s initiative has "improved go-to-market activities" and has served as "the key to personal development and new career perspectives."
But, for most PSFs, silo’ed thinking and inertia still rule the day. Some individuals and certain functions will have to be required to work together, for the good of the larger whole. Progress is slow, but there does appear to be a dawning awareness that formal functional integration can offer substantive benefits for a firm. According to one respondent, “[There are] still some thiefdoms to break down, but generally I think people are finding it far more rewarding to work together.” (I love the mistaken (or maybe on purpose) play on the word fiefdom).
If indeed it requires focus and deliberate intention to direct an enterprise’s attention toward the effectiveness of its internal working relationships, why wouldn’t PSFs want to make working relationships more explicitly tied together, more obviously interdependent? Even before our survey questionnaire was distributed, PSFs already had implicit knowledge that integrating certain functions together is smart. This would explain why our respondents so broadly endorsed the concept of functions collaborating together.
But now, with these survey findings, we have solid encouragement (beyond my own noisy blathering) toward even more formally integrating a PSF’s operational functions with Marketing and Business Development.
I couldn't say it better than this particular respondent:
“The integration of Marketing with Strategic Planning immediately promoted a better understanding of strategic objectives by marketing and also better interaction of our marketing manager with business unit directors.”
Although this respondent and others acknowledged the challenges of developing the required formal structures, they assure us that formally integrating Marketing/Business Development with other operations is GOOD.
“Metrics for performance in areas like these are tough to establish, but we're happy with the progress and firmly believe that our accountability process has made us more profitable and more focused in our actions.”
Enough said.
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