Horizontal Integration and the Role of Internal Business Networks
Recently, I was reading an interesting HBR blog post by Sohrab Vossoughi on the value of horizontal integration within companies.
The concept of horizontal integration as a common practice across the most successful, customer-focused companies is an interesting one.
According to Vossoughi, “for a leader trying to ensure customers value their experience, three things are essential to the organization:
- a passionately articulated purpose (“to make money” is not sufficient);
- a crystal-clear understanding of who all of this work is being done for; and
- people tasked to be integrators, to foster human connections and champion the organization’s purpose”
I’m interested to see if you agree with this hypothesis.
Personally, the first two bullets are a bit of motherhood and apple pie. Not sure that anyone would disagree with the fact that you have to have a clear vision and a clear understanding of your customer to succeed. The third bullet is of particular interest, however. The role of employees as integrators – working across the organization to bring the best results for customers – is likely not prevalent in most companies today. The issue I see is that most organizations are not set-up to facilitate that type of collaboration across functions within an organization. That is where I see the role of internal business networks.
I’d be interested to understand from Vossoughi whether the companies he’s referenced as leaders in this space, Amazon, Virgin and Apple have formal internal networks set up within their organizations. Another company that comes to mind as exemplifying Vossoughi’s point that I know does leverage internal networks is Zappos. In CFO Research’s study Collaborate to Win, a Zappos executive references the importance of both internal and external networks to deliver the ultimate customer experience.
As social technologies enable companies to create formal networks I would imagine that more and more companies will be able to move employees toward becoming integrators. The catch, however, is that companies must also develop a culture that truly enables and rewards employees for this type of behavior. I imagine that Amazon, Virgin and Apple have done that. Has your company?