Cascading strategy to customer-facing functions is usually straightforward. Cascading it to support functions is a different story. That’s because of a false assumption about how support functions connect to strategy.
Imagine you have a corporate goal to increase customer loyalty. It’s relatively easy to understand how customer-facing functions can influence this goal:
- If the customer service function is more helpful and friendly and respectful with customers, loyalty can improve.
- If the sales function gets better at matching the right products or services to each customer’s real needs, loyalty can improve.
Because these functions interact directly with customers, they can directly influence goals to do with customers. But it’s harder to see how support functions, or back-office functions, impact on a corporate goal to increase customer loyalty.
The mistake we make in cascading strategy into support functions is to try and align them directly with corporate goals. The assumption is that they can have a strong direct cause-effect link to strategy. It’s a bad assumption, because the support functions exist to serve the customer-facing functions. They don’t exist to directly serve the corporate direction.
To align support functions with strategy, we route that alignment via their direct cause-effect link to the other customer-facing functions:
- The IT function directly impacts the sales function by how quickly they can provide easy access to accurate customer records and purchasing history, to inform the sales team’s campaigns.
- The HR function directly impacts service delivery functions by how quickly they can recruit people into vacant positions, and by how closely the applicants match the skills and attitudes and knowledge the service delivery function needs.
We can align support function goals to the corporate goals, but the alignment is discovered by first aligning support functions with the customer-facing functions.
A better approach to align support functions to strategy:
- Who are our internal customers?
- What goals do our internal customers have, and how do they align to the strategic goals?
- How do we help or hinder our internal customers to achieve their goals?
- Given that, what are the results our internal customers need us to improve or excel at?
There is an exception — when a support function may sometimes have a direct impact on a corporate goal:
- The procurement function can directly impact, through their purchasing policies and processes, a corporate goal of reducing expenditure.
- The HR function can directly impact, through recruitment and staff development processes, a corporate goal of increasing employee engagement.
Strategy cascades to support functions via the functions they serve — not around them.