Synergy Development and Use Dr. Fred Mugambi Mwirigi JKUAT

Introduction  Businesses and business units cannot afford to operate in silos  A lot of capacity is lost because of failure to develop and harness intra-business and inter- business synergy  Businesses and business units must identify and harness synergies in order to optimize their performance

Chapter 16 - Organizational IssuesPPT 16-3 KenyaSoftwareMarketingHR ICTProduction Functional Silos Nigeria TrainingProjectorsRwandaS. Africa Product SilosCountry Silos The Silo World Hardware

Silo-Driven Problems 1.Misallocation of resources 2.Lack clarity & linkage 3.Competence not diffused across silos 4.Success is not leveraged across silos 5.Communication and cooperation weak Chapter 16 - Organizational IssuesPPT 16-4

A Framework for Analyzing Organizations People Structure Systems Culture People Structure Systems Culture External Analysis Strategy Internal Analysis Performance

Obtaining Information about Organizational Components Structure  What is the organization’s structure? How decentralized is it?  What are the lines of authority and communication?  What are the roles of task forces, committees, organizations, or similar mechanisms? Chapter 16 - Organizational IssuesPPT 16-6

Obtaining Information about Organizational Components Systems  How are budgets set?  What is the nature of the planning system? Does it happen in all silos?  How is inter-silo planning coordinated?  What are the key measures used to evaluate performance?  How does the accounting system work?  How do product and information flow? Chapter 16 - Organizational IssuesPPT 16-7

Obtaining Information about Organizational Components People  What are the skills, knowledge, and experience of the firm’s employees?  What is their depth and quality?  What are the employees’ expectations?  What are their attitudes toward the firm and their jobs? Chapter 16 - Organizational IssuesPPT 16-8

Chapter 16 - Organizational IssuesPPT 16-9 Shared Values Shared Values Norms of Behavior Symbols and Symbolic Action Symbols and Symbolic Action Obtaining Information about Components Organizational Culture Figure 16.3 Organizational Culture

Obtaining Information about Organizational Components Culture  Are there shared values that are visible and accepted?  What are these shared values and how are they communicated?  What are the norms of behavior?  What are the significant symbols and symbolic activities?  What is the dominant management style?  How is conflict resolved? Chapter 16 - Organizational IssuesPPT 16-10

Silo-Spanning Objectives Chapter 16 - Organizational IssuesPPT Dysfunctional objectives  Centralize  Standardize  Reduce the number of divisions or agencies  Singularity Appropriate objectives — to improve  Silo-spanning programs & offerings  Brand consistency & linkage  Resource allocation and sharing  Marketing competence  Communication & cooperation

Prerequisites for Building Synergies  Sobering Implications: Identify the real need for synergy and the intended outcomes as a result of the synergy  Common goal: focus on a common and relevant purpose, shared activities and minimize or eliminate time spent on nonessential concerns and issues  Interdependence: realize the need for unified action to maximize the participation of each key player

Stages in Synergy Development 1.Interacting 2.Appreciative Understanding 3.Integrating 4.Implementing

Interacting  Synergistic communication occurs when diverse perspectives, ideas, meanings, attitudes, feelings, and values are expressed and received openly and honestly in a supportive environment.

Appreciative Understanding  This is a nurturing atmosphere characterized by people who recognize and value their distinct frames of reference regarding the task at hand.

Integrating  Only when appreciative understanding is established can individuals seek ways to merge or combine their separate views into mutually supportive patterns for thinking and acting.  It is during this integration phase that individuals invent and experiment with creative ways to move beyond their current thinking.

Implementing  Merely finding innovative approaches to integrate various viewpoints is not enough.  It is only through active planning, goal setting, discipline, and consistent application of various change facilitating methods that a transition can be successfully achieved.  Without a structured implementation plan, the likelihood is low that a synergistic advantage will occur

Leadership Roles in Synergy Building  Get the CEO on Board  Get the right people  Cross-silo teams  Get easy wins  Be facilitator/consultant  Engage the business units  Deliver excellence  Balance central opportunities with local needs Chapter 16 - Organizational IssuesPPT 16-18

Chapter 16 - Organizational IssuesPPT In conclusion The organizational levers are structure, systems, people, and culture. Each must be congruent and support the business strategy. Decentralization with powerful silo groups can inhibit synergy and efficiency. For marketing, it leads to misallocation of resources, confused brands, inhibited cross-silo offerings and programs, weak marketing staffs, the failure to leverage success, and inadequate cooperation and communication.

 The organizational structure lever provides the option to centralize selectively, use teams and networks, use matrix reporting structures, and to employ a virtual organization.

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