Organizing by function (e.g., all sales together) seems efficient but incentivizes teams to optimize their individual metrics, not the company's success. This sub-optimization prevents cross-functional learning and leads to blame games, ultimately harming the entire customer value stream and creating a non-learning organization.
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When one team (e.g., engineering) adopts agile methods while interdependent teams (e.g., finance) do not, it creates system-wide dysfunction. This "arrhythmia" highlights the need for a holistic view of transformation, ensuring all parts of the organization can keep pace.
To create an integrated product suite, Cisco dismantled divisional silos and restructured into a platform-based organization. An org chart directly dictates product architecture, so leaders must design their organization to produce the desired integrated outcome, not just individual products.
When different departments push their own projects onto the sales team, reps get overloaded. To solve this, enablement leaders must shift the focus of every initiative away from departmental priorities and toward a shared customer outcome. This unified goal minimizes internal friction and clarifies what's truly important.
A major organizational red flag is when the people who decide on pricing are different from those who decide feature priorities. This disconnect indicates a broken strategy loop where value creation and value capture are managed in separate, unaligned silos.
Focusing on individual performance metrics can be counterproductive. As seen in the "super chicken" experiment, top individual performers often succeed by suppressing others. This lowers team collaboration and harms long-term group output, which can be up to 160% more productive than a group of siloed high-achievers.
If a company creates a siloed "innovation team," it's a sign the main product organization is stuck in "business as usual" maintenance. Innovation should be a mindset embedded across all teams, not an isolated function delegated to a select few.
Earnouts rewarding only the acquired team's siloed performance create a major integration roadblock. This structure incentivizes them to hoard resources and avoid collaboration, directly undermining the goal of creating a unified culture and destroying potential cross-functional value.
In a multi-product company, horizontal teams naturally prioritize mature, high-impact businesses. Structuring teams vertically with P&L ownership for each product, even nascent ones, ensures dedicated focus and accountability, preventing smaller initiatives from being starved of resources.
Setting rigid targets incentivizes employees to present favorable numbers, even subconsciously. This "performance theater" discourages them from investigating negative results, which are often the source of valuable learning. The muscle for detective work atrophies, and real problems remain hidden beneath good-looking metrics.
Average teams measure success in functional silos (sales vs. marketing), leading to finger-pointing. Elite teams remove functions from the equation. They focus entirely on the customer's journey, identifying patterns that lead to pipeline and fixing those that don't, regardless of which department "owns" them.
