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XFX: The Story of Cross-functional Excellence Tom Peters 11 December 2007.

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1 XFX: The Story of Cross-functional Excellence Tom Peters 11 December 2007

2 The XF-50: 50 Ways to Enhance Cross-Functional Effectiveness and Deliver Blinding Speed, Service Excellence, Value-added Customer Solutions and Rapid Innovation* *Stanford D-School /Conoco-oil exploration/ GlaxoSmithKline- CEDD/Dartmouth Med-healthcare delivery microsystems/ McKinsey/N.I.E./Armed Services/IBM/UPS/Etc./Etc.

3 E.g.: the Stanford D-School (Design School) combines Engineering + Art + Business. Years ago, Conoco got a jump on others in oil exploration by combining geologists and geophysicists. GlaxoSmithKline is setting the pace in Big Pharma drug discovery thanks to a half dozen X-functional CEDDs (Centers of Excellence in Drug Discovery). Dartmouth Medical School is achieving breakthroughs in healthcare delivery by microsystems, patient service teams that include docs, nurses, techs, etc. McKinsey has added luster to its reputation by doing all its work via highly integrated McKinsey-Client teams that focus on both analysis and implementation. Increasing American intelligence accuracy is due in large measure to organizational and technological change that deliver institutional coordination. In the U.S. Armed Services, for the first time, Navy systems talk to Army Systems, etc.; and Joint Staff assignments are required for those being promoted to General Officer rank. IBM has completely re-imagined the company courtesy IBM Global Services, joint teams that deliver Integrated Systems to Client organizations. UPS is managing entire Client Supply Chains via XF teams (within UPS, with Clients). Etc. Etc.

4 XFX = X* * Cross-functional Excellence = Excellence (or: Excellence = Cross-functional Excellence

5 XF50 XF50 **Its our organization to make workor not. Its not them, the outside world thats the problem. The enemy is us. Period. the problem. The enemy is us. Period. **Friction-free! Dump 90% of middle managersmost are advertent or inadvertent power freaks. We are allevery one of usin the Friction Removal Business, power freaks. We are allevery one of usin the Friction Removal Business, one moment at a time, now and forevermore. one moment at a time, now and forevermore. **No stovepipes! Stove-piping, Silo-ing is an Automatic Firing Offense. Period. No appeals. (Within the limits of civility, somewhat public firings are not Period. No appeals. (Within the limits of civility, somewhat public firings are not out of the questionthat is, make one and all aware why the axe fell.) out of the questionthat is, make one and all aware why the axe fell.) **Everything on the Web. This helps. A lot. (Everything = Big word.) **Open access. All available to all. Transparency, beyond a level thats sensible, is a de facto imperative in a Burn-the-Silos strategy. is a de facto imperative in a Burn-the-Silos strategy. **Project managers rule!! Project managers running XF (cross-functional) projects are the Elite of the organization, and seen as such and treated as such. (The likes are the Elite of the organization, and seen as such and treated as such. (The likes of construction companies have practiced this more or less forever.) of construction companies have practiced this more or less forever.) **Value-added Proposition = Application of integrated resources. (From the entire supply-chain.) To deliver on our emergent business raison dêtre, and compete supply-chain.) To deliver on our emergent business raison dêtre, and compete with the likes of our Chinese and Indian brethren, we must cooperate with with the likes of our Chinese and Indian brethren, we must cooperate with anybody and everybody 24/7. IBM, UPS and many, many others are selling far anybody and everybody 24/7. IBM, UPS and many, many others are selling far more than a product or service that worksthe new it is pure and simple a more than a product or service that worksthe new it is pure and simple a product of XF cooperation; the product is the cooperation is not much of product of XF cooperation; the product is the cooperation is not much of a stretch. a stretch.

6 XF50 XF50 **XF work is the direct work of leaders! **Integrated solutions = Our Culture. (Therefore: XF = Our culture.) **Partner with best-in-class only. Their pursuit of Excellence helps us get beyond petty bickering. An all-star team has little time for anything other than delivering petty bickering. An all-star team has little time for anything other than delivering on the (big) Client promise. on the (big) Client promise. **All functions are created equal! All functions contribute equally! All = All. **All functions are PSFs, Professional Service Firms. Professionalism is the watchwordand true Professionalism rises above turf wars. You are your watchwordand true Professionalism rises above turf wars. You are your projects, your legacy is your projectsand the legacy will be skimpy indeed projects, your legacy is your projectsand the legacy will be skimpy indeed unless you pass, with flying colors, the works well with others exam! unless you pass, with flying colors, the works well with others exam! **We are all in sales! We all (a-l-l) sell those Integrated Client Solutions. Good salespeople dont blame others for screw-upsthe Clint doesnt care. Good salespeople dont blame others for screw-upsthe Clint doesnt care. Good salespeople are quarterbacks who make the system work-deliver. salespeople are quarterbacks who make the system work-deliver. **We all invest in wiring the Client organizationwe develop comprehensive relationships in every part (function, level) of the Clients organization. We pay relationships in every part (function, level) of the Clients organization. We pay special attention to the so-called lower levels, short on glamour, long on the special attention to the so-called lower levels, short on glamour, long on the ability to make things happen at the coalface. ability to make things happen at the coalface. **We all live the Brandwhich is Delivery of Matchless Integrated Solutions that transform the Clients organization. To live the brand is to become a raving fan transform the Clients organization. To live the brand is to become a raving fan of XF cooperation. of XF cooperation.

7 XF50 XF50 **We use the word partner until we want to barf! (Words matter! A lot!) **We use the word team until we want to barf. (Words matter! A lot!) **We use the word us until we want to barf. (Words matter! A lot!) **We obsessively seek Inclusionand abhor exclusion. We want more people from more places (internal, externalthe whole supply chain) aboard in order to more places (internal, externalthe whole supply chain) aboard in order to maximize systemic benefits. maximize systemic benefits. **Buttons & Badges matterwe work relentlessly at team (XF team) identity and solidarity. (Corny? Get over it.) solidarity. (Corny? Get over it.) **All (almost all) rewards are team rewards. **We keep base pay rather lowand give whopping bonuses for excellent team delivery of seriously cool cross-functional Client benefits. delivery of seriously cool cross-functional Client benefits. **WE NEVER BLAME OTHER PARTS OF THE ORGANIZATION FOR SCREW-UPS. **WE TAKE THE HEATTHE WHOLE TEAM. (For anything and everything.) (Losing, like winning, is a team affair.) (Losing, like winning, is a team affair.) **BLAMING IS AN AUTOMATIC FIRING OFFENSE. **Women rulewomen are simply better at the XF communications stuffless power obsessed, less hierarchically inclined, more group-team oriented. power obsessed, less hierarchically inclined, more group-team oriented. **Every member of our team is an honored contributor. XF project Excellence is an all hands affair. is an all hands affair.

8 XF50 XF50 **We are our XF Teams! XF project teams are how we get things done. **Wow Projects rule, large or smallWow projects demand by definition XF Excellence. Excellence. **We routinely attempt to unearth and then reward small gestures of XF cooperation. cooperation. **We invite Functional Bigwigs to our XF project team reviews. **We insist on Client team participationfrom all functions of the Client organization. organization. **An Open talent market helps make the projects silo-free. People want in on the project because of the opportunity to do something memorableno one will project because of the opportunity to do something memorableno one will tolerate delays based on traditional functional squabbling. tolerate delays based on traditional functional squabbling. **Flat! Flat = Flattened Silos. Flat = Excellence based on XF project outcomes, not power-hoarding within functional boundaries. power-hoarding within functional boundaries. **New C-level? We more or less need a C-level job titled Chief Bullshit Removal Officer. That is, some kind of formal watchdog whose role in life is to make cross- Officer. That is, some kind of formal watchdog whose role in life is to make cross- functionality work, and I.D. those who dont get with the program. functionality work, and I.D. those who dont get with the program. **Huge (H-U-G-E) cooperation bonuses. Senior team members who conspicuously shine in the working together bit are rewarded Big Time. (A million bucks in one shine in the working together bit are rewarded Big Time. (A million bucks in one case I knowand a non-cooperating very senior was sacked.) case I knowand a non-cooperating very senior was sacked.)

9 XF50 XF50 **Get physical!! Co-location is the most powerful culture changer. Physical X- functional proximity is almost a guarantee (yup!) of remarkably improved functional proximity is almost a guarantee (yup!) of remarkably improved cooperationto aid this, one needs flexible workspaces that can be mobilized for cooperationto aid this, one needs flexible workspaces that can be mobilized for a team in a flash. a team in a flash. **Ad hoc. To improve the new X-functional Culture, little XF teams should be formed on the spot to deal with an urgent issuethey may live for but ten days, formed on the spot to deal with an urgent issuethey may live for but ten days, but it helps the XF habit, making it normal to be working the XF way. but it helps the XF habit, making it normal to be working the XF way. **Deep dip. Dive three levels down in the organization to fill a senior role with someone who has been proactive on the XF dimension. someone who has been proactive on the XF dimension. **Formal evaluations. Everyone, starting with the receptionist, should have an important XF rating component in their evaluation. important XF rating component in their evaluation. **Demand XF experience for, especially, senior jobs. The military requires all would- be generals and admirals to have served a full tour in a job whose only goals were be generals and admirals to have served a full tour in a job whose only goals were cross-functional. Great idea! cross-functional. Great idea! **Early project management experience. Within days, literally, of coming aboard folks should be running some bit of a project, working with folks from other folks should be running some bit of a project, working with folks from other functionshence, all this (XF stuff) becomes as natural as breathing. functionshence, all this (XF stuff) becomes as natural as breathing. **Get em out with the customer. Rarely does the accountant or bench scientist call on the customer. Reverse that. Give everyone more or less regular customer- on the customer. Reverse that. Give everyone more or less regular customer- facing experiences. One learns quickly that the customer is not interested in our facing experiences. One learns quickly that the customer is not interested in our in-house turf battles! in-house turf battles!

10 XF50 XF50 **Put it on the–every agenda. XF issues to be resolved should be on every agendamorning project team review, weekly exec team meeting, etc. A next agendamorning project team review, weekly exec team meeting, etc. A next step within 24 hours (4?) ought to be part of the resolution. step within 24 hours (4?) ought to be part of the resolution. **XF honest broker or ombudsman. The ombudsman examines XF friction events and acts as Conflict Resolution Counselor. (Perhaps a formal conflict events and acts as Conflict Resolution Counselor. (Perhaps a formal conflict resolution agreement?) resolution agreement?) **Lock it in! XF cooperation, central to any value-added mission, should be an explicit part of the Vision Statement. explicit part of the Vision Statement. **Promotions. Every promotion, no exceptions, should put XF Excellence in the top 5 (3?) evaluation criteria. top 5 (3?) evaluation criteria. **Pick partners based on their cooperation proclivity. Everyone must be on board if this thing is going to work; hence every vendor, among others, should board if this thing is going to work; hence every vendor, among others, should be formally evaluated on their commitment to XF transparencye.g., can we be formally evaluated on their commitment to XF transparencye.g., can we access anyone at any level in any function of their organization without access anyone at any level in any function of their organization without bureaucratic barriers? bureaucratic barriers? **Fire vendors who dont get itmore than get it, welcome it with open arms. **Jaw. Jaw. Jaw. Talk XF cooperation-value-added at every opportunity. Become a relentless bore! a relentless bore!

11 XF50/#50 XF50/#50 **Excellence! There is a state of XF Excellence. There is no XF Excellence. There is no Excellence without XF Excellence without XF Excellence. Excellence = XF Excellence. Excellence = XF Excellence. Pursue it. Talk Excellence. Pursue it. Talk about it. Demand it. Reward it. about it. Demand it. Reward it.

12 XFX = X* * Cross-functional Excellence = Excellence (or: Excellence = Cross-functional Excellence

13 XFx


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