Equally important is horizontal integration. In many companies – especially old economy – the caste system is still very much alive: There’s the R&D crowd, the guys from production, sales people, marketing people, finance people and so on. Sooner or later many different ‘esprit de corps’ develop.

For example the production guys will insist that they obviously do a great job, but R&D always wants fancy solutions, HR doesn’t give them enough people, finance doesn’t give them enough budget, purchasing doesn’t give them the best parts, sales wants the product yesterday and marketing insists on USP’s. Depending on the perspective, other divisions will argue in a similar way.

The system is held together by the good old hierarchy. Board members from all divisions usually meet once a week, but what about the rest? They only meet when working on a common project, which usually doesn’t involve all divisions. It is difficult and time-consuming to develop positive relations and common understanding under these conditions. Some employees, which are more proactive than others, develop their own ‘private’ and ‘personal’ networks. But this is not the solution.

Customers don’t differentiate between divisions – for them there is only one brand. Companies are well advised to break down the caste system and facilitate horizontal and vertical integration. It improves the relations: inside and outside.

What’s your view?