Each functional group has its mandate.
Sales brings in revenue. Production produces defect free products. Customer service keeps customers happy. These functional KPIs are specific to each department.
For a business to operate in a cohesive manner, you need all the teams work together and support each other.
This means you need to communicate what the overall goals are for the business. You need to be clear on where each functional group ought to focus their energy so there is alignment on priorities.
Functional KPIs are siloed KPIs when there is little consideration for cross-departmental impacts. For instance, a promotion campaign is great for bringing in revenue. But if the fulfilment team isn’t able to keep up with delivery, it doesn’t go well with the customers. Marketing achieves excellent lead conversion but the warehouse team ends up with a huge backlog. Functional KPIs are siloed KPIs when there is little consideration for cross-departmental impacts. Click To Tweet
Without proper collaborative planning, one group excels at the expense of another.
When you assign functional targets, it is important to look at the business in a holistic manner. Understand the interdependencies across functions to ensure that there is adequate collaboration to address potential conflicts.