From the Ask Tom mailbag –
Question:
When you talk about the COO role, you use the words multi-system integration to describe its purpose. I understand silos, and you said we put the silos there for a reason. You said not to get rid of your silos, but to integrate them together. What does that mean?
Response:
Yes, as companies move from Adolescence to Prime, the silos will kill them without system integration. The COO role will necessarily focus on operations confronting two main system integration issues.
- What is the performance standard of the work output from each function (department, system, silo) as work moves to the next function? Each function has marching orders (from us) to be efficient, internally profitable. This necessitates an internal focus to the function. Many critical handoffs occur as work moves from sales through project management into operations. When there is a defect in the handoff, we may not discover the problem until we have poured concrete around steel. It is much easier to unwind in the handoff stage than the jackhammer stage.
- The other system issue relates to each function’s capacity for output. Without someone paying attention, easy for one system to outstrip the capacity of its neighboring system. This may manifest as a breakdown in communication, when the underlying cause is two internally focused systems, heads down not paying attention to the other functions around. Discussions of single system capacity rarely emerge below S-IV, much less the impact of one system onto another system.
One of the critical functions for the COO is to calculate the company’s operational (ops) capacity as operations is most likely to be the constraint in the midst of the other systems.