Chapter 6. PRINCIPLE V: Insist on Functional Excellence

As leaders get promoted and gain more responsibility in an organization, they simply can't immediately acquire all the in-depth knowledge required to fully understand every area that falls within their authority. The higher an individual moves in the organization, the truer this becomes. In order to ensure functional excellence, leaders need to have very talented, courageous, and highly principled individuals working for them. These people need to have in-depth knowledge of their field and must be willing to challenge the boss when they don't agree. This is particularly true in skill-dependent functional areas like manufacturing, IT, finance, and HR. When leaders lack knowledge and also lack someone who can be a reliable source of knowledge, things get messy. Huge amounts of complexity are caused all the time by sloppy functional leaders and sloppy practices. It is often the major source of operational chaos in an organization.

I once was in a meeting where the CEO asked a VP of a particular operating division how many manufacturing people there were in his division. The corporate finance guy in attendance immediately pulled up on his PC the manufacturing headcount data in the corporate finance database and said 845. The director of HR for the division responded quickly saying that the corporate finance director was wrong and that the data she had in front of her from HR's more accurate database indicated that the number was 819. She also said that the corporate finance database was always out-of-date regarding headcount and should not be trusted, thus incensing the corporate finance person. The divisional director of manufacturing then jumped in and claimed that each division's manufacturing unit had its own process for tracking its employee base and that the proper way to answer the question was to get the number from that division's manufacturing database. He indicated that his factsheet printed from that database indicated that the number was 814. By this time, steam was coming out of the CEO's ears. What he was experiencing is a typical example of just how complex, fragmented, and sloppy a company can become. Unfortunately, I had the nasty job of telling the CEO after the meeting that it was his fault!