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Turf wars
There must be few marketers who have not felt their colleagues in other departments are, at times, more of a hindrance than a help. Blocking ideas, slowing things down and subtly withholding important information are all manifestations of, what management researchers call, inter-unit conflict (IUC). The effects of IUC range in severity from simple lack of co-operation to thinly-disguised hostility. My own research shows IUC to be a major reason for strategies not being implemented effectively. It distorts the flow of resources and knowledge so that what the company actually does is very different from what it decided originally.
Managing IUC is notoriously hard and can be a key differentiator between effective and less effective firms. For this reason it is important to understand the causes and cures of this pernicious problem. To steal a quote from one of my research interviewees: "IUC is like a chronic disease; it has both causes and symptoms. Managing the symptoms is costly, time consuming and has little impact on outcomes." To find a lasting cure, both symptoms and causes need to be understood.
What causes educated, intelligent, managers to fight among themselves, rather than co-operate to beat the competition? How do those causes lead to the symptoms witnessed every day and what does this behaviour imply for practical, effective management action?
A chronic disease
To understand the causes of IUC, it must be clearly defined. It is not the same as conflict between individuals, which is common and usually caused by clashes of self-interest. IUC is, specifically, discord between departments or business units within a company.
Like some diseases, the two are easily confused and correct diagnosis is needed to ensure appropriate treatment. The two can be distinguished by the pattern of conflict. When disagreement correlates strongly to organisational boundaries, it is IUC; when no such pattern can be seen, it is more likely to be individual conflict.
To continue the analogy, just as an acute myocardial infarction has both proximate causes (occlusion of a coronary artery) and ultimate causes (lifestyle and genetics), IUC has similarly proximate and ultimate causes. Both are important and need to be understood as the basis for improving the organisation's effectiveness.
The ultimate cause of IUC is, to slip into researchers' jargon, heterogeneity of organisational culture. The truth is that, while we often talk glibly of our "company culture", there is no such thing. In reality, it is an uneasy federation of many department sub-cultures that differ from one another to greater or lesser degrees. Remember that at the roots of any business culture lie fundamental assumptions about the way the world works and, crucially, about what it takes to succeed. While many of these core assumptions might be commonly held between different departments, not all are. In a typical pharmaceutical company, what the sales department regards as critical to success (eg good prescriber relationships) is often very different to what is considered vital by marketing (eg brand strength), medical affairs (eg clinical efficacy) or regulatory affairs (eg compliance). In practice, these differing assumptions lead to different values and different behaviours. Ultimately, they result in the sort of conflict that can cripple a company – something made even more problematic by the implicit, unconscious nature of those differing assumptions. Marketers, with their cross-functional exposure to almost every other section, witness the consequences of cultural heterogeneity more than most departments.
The more immediate, proximate causes of IUC also stem from company culture, but not from differing core assumptions. Instead, they stem from the artefacts of that culture, such as organisational structure, working habits, processes and procedures. Take, for instance, the way in which a typical product launch is managed in a large pharmaceutical company. Among the cultural artefacts that are seen are matrix structures, project teams and quantified "management by objectives". Less obvious will be tacit rules about "getting buy-in" and "valuing everyone's input equally".
These expressions of modern pharma company culture contrast sharply with the findings of IUC researchers, which demonstrate that departments fight when they have to interact a lot and have shared, blurred or conflicting goals. The situation is made worse when there are differences in perceived status, between medics and reps, for example, and when departments have one-way supplier–receiver relationships. In many cases, such conditions are the unintended consequences of the modern matrix structures and "mutual respect" working practices found in many companies today. Often, the project-leading brand managers are left to handle the consequences of the IUC, which is fed, unintentionally, by cultural artefacts.
So, departments conflict for two sets of reasons that are connected but, as will be shown, can be managed separately. First, departments may differ fundamentally but unconsciously in their beliefs about how to succeed in business. Second, the working arrangements that pervade modern pharma companies make IUC much more likely to happen. Just like the chronic disease it has been compared with here, the causes of IUC provide the basis for understanding, managing and reducing it.
Peace process
Like adopting a healthy lifestyle, fixing the cultural heterogeneity that lies beneath IUC is ultimately the best solution, but this is easier said than done. Many companies have tried and failed. Culture change can become a 'boiling the ocean' task which never yields concrete results.
Those companies that have succeeded, however, have two lessons for the rest of us. First, they do not attempt wholesale cultural change, they only try to fix those bits of the culture that are causing significant problems. Second, they realise that the key is not to fiddle with artefacts like structures or processes, but to address the core assumptions. In practice, this means getting the conflicting departments to agree on the critical success factors for the market, which can only be done effectively by the key departments working together to analyse the market and develop strategy.
Unfortunately, typical practice in pharma is a long way from this ideal. More commonly, plans are developed in marketing 'ivory towers'. Worse still, what passes for strategic planning in most companies is nothing of the sort. Instead, it is a ritual of budgeting and tactics. Both ivory tower and tactical approaches deny other departments the chance to challenge and form shared assumptions. By contrast, best practice involves making the time for rigorous strategy planning and involving those departments most critical to strategy implementation. Like all best practice, this approach is as rare as it is valuable.
If managing cultural heterogeneity is strategic and difficult, managing the proximate causes of IUC is gritty, detailed and simpler, but still not easy. In practice, it involves four main steps:
• Clarify decision rights: the benefits of getting buy-in are often overstated and frequently outweighed by the costs of ambiguity about who owns a decision
• De-conflict goals: the accidental contradiction of different department goals is common and pulls a project in opposing directions
• Discourage role snobbery: the implicit belief that one role is more important than another leads to a sort of corporate class warfare
• Create mutual interdependence: when one department always acts as supplier and never as 'customer', the relationships become one-sided and imbalanced. This effect is reduced when they each depend on the other's help.
None of these approaches is a quick and easy cure-all and experienced marketers should be wary of applying quick cure-alls for difficult, long-standing problems. But taken together, managed carefully, and essentially tailored to fit the particular context of the company, these reduce the negative effects of IUC.
Feeling better
The IUC as a chronic disease metaphor reminds us of the costs of this problem, even if we have learned to live with them. It also reminds us that there are both systemic cures (shared, rigorous strategy development) and useful palliatives in the form of four things that can be done today. Perhaps the most important parallel, however, lies in the motivation to change it.
Taking steps to manage coronary heart disease, for example, needs the motivation and commitment of the person most affected by it; the patient. Likewise, managing and curing IUC needs the determined attention of those that it hinders most. And that is, more often than not, the cross-functional, project-leading, marketer.
The Author
Dr Brian Smith is a research fellow at OUBS and runs PragMedic
To comment on this article, email pm@pmlive.com
