27 Mar 2023
3 Questions to Guide Your Evolution from a Functional Leader to an Organizational Leader
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Whether you joined your company’s executive team two weeks ago or two years ago, you have an important transition to make: Evolving from a purely functional leader to an organizational leader. This shift is essential for both you and the organization to thrive, but it can be challenging to accomplish.
When you’re charged with heading up a business unit, your goals and incentives tend to revolve around the group you’re leading. The VP of Sales might receive bonuses when the team exceeds quarterly goals, while the VP of Manufacturing might have compensation tied to production objectives. Meanwhile, many organizational structures don’t lend themselves to cross-functional collaboration. As our work has found, leadership team meetings often become report-out sessions designed to update the CEO on each business unit’s status, rather than opportunities to develop, advance, and align around the corporate strategy.
These realities make it difficult to transition from solely heading up a functional area to serving the equally vital role of an organizational leader. These three questions can help you assess where you are along the journey and help you move forward with a broader perspective and contribution.
- To what extent do your business unit strategy and goals align with the corporate strategy and goals?
It’s not uncommon for corporate and functional area strategies and goals to become misaligned and even counterproductive. For example, the VP of Marketing might approve a campaign to improve penetration in a particular target market, at the same time the company is reprioritizing where and how it wants to market its products and services.
One effective way to maintain alignment is to take a more active role in developing the corporate strategy, which goes back to the purpose of leadership team meetings. The best meeting structures provide opportunities to cross-pollinate ideas, discuss strategy without the distractions of daily crises, identify interdependencies, and ensure every executive team member has a voice in the company’s direction.
It's equally important to educate your functional team about the corporate direction. (That may sound obvious, but when you’re busy putting out fires and meeting deadlines, it can easily fall down the list.) Armed with the right information, your group can participate in developing and executing business unit strategies that align with the company’s plans—and push back when things start veering off course.
- To what extent do you consider how your functional area’s decisions and directions benefit (or impair) other areas of the organization?
A decision or action in one business unit has a ripple effect elsewhere, impacting the organization’s ability to meet customer needs and achieve corporate goals. That’s why it’s so vital to align horizontally.
Yet, a laser focus on your functional area can cause you to overlook how your decisions and actions affect other business units. We’ve worked with organizations where the sales group decides to make a bigger push on a product line without keeping manufacturing and supply chain in the loop. Inevitably, the company can’t fulfill the new orders, customers grow dissatisfied, and employees start finger-pointing.
To avoid this pitfall, consider using the Stop/Start/Continue technique. The idea is to meet with your cross-functional peers regularly and ask:
- What should my business unit start doing that would help your group be more successful?
- What should my business unit stop doing because it’s keeping your group from being successful?
- What should my business unit continue doing to best support your group?
You might also find it beneficial to leverage technology to give your peers a better line of sight into your functional area’s operations. One sales leader began holding a weekly meeting with the other business units impacted by sales to review a consolidated dashboard he’d created just for this purpose, developing a common language to discuss shared goals and priorities.
When you take steps like these to view your functional group’s decisions and actions more systemically and work with your peers more collaboratively, you’re making strides toward serving as a true organizational leader focused on the company’s overall success.
- To what extent do you know and exceed the expectations of all your stakeholders?
Whereas the second question addresses alignment with your peers, the third question ensures you’re meeting stakeholder expectations both upstream and downstream. And since stakeholder groups rarely share their expectations directly, you’ll need to ask them outright.
While any effort your business unit undertakes has the potential to exceed or fall short of a stakeholder’s expectations, we find the reporting function is a prime area where problems can crop up. Groups across the company rely on data for reporting and decision-making. But often, we ask for data or fulfill requests for data without posing questions like these:
- Does your group have the tools to collect and report on the data we’re asking for, in an efficient way?
- Do the reports that my team delivers provide value for your business unit? And do they help the organization create greater overall value?
- Does my team’s request for data create undue burdens for your team?
By setting up a regular cadence of meetings with your key stakeholders and asking how you can better meet their expectations (and vice versa), you can gain new insights, challenge long-held assumptions, and make changes that are mutually beneficial.
The importance of balancing your functional leadership responsibilities and your organizational leadership role can’t be overstated. When leaders attend to both roles equally well, the results are measurable: better collaboration, stronger relationships, more innovative solutions, less executive-level attrition, and the ability to deliver greater value across your ecosystem.
While change is never easy, the right tools and support can help you make this transition smoothly and successfully. Leadership advisory professionals like the experts at Odgers Berndtson regularly advise executives and their teams on how to balance functional and organizational responsibilities, using proven techniques for breaking down silos, enhancing communication and collaboration, and thinking more systemically.
Learn how the Leadership Advisory Practice at Odgers Berndtson can help your organization discover and develop leaders, strengthen value-creating teams, and prepare for what’s next.