Functionless Units in Organization

When we say a unit is a business function, it often means that the organization can’t operate properly without the unit.

A functionless unit is the one that’s not considered a business function.

Typical example of a business function is HR, management, marketing, R&D, etc. – executives would rarely go to HR or middle management and say, “you better prove your ROI, or I’m shutting you down next quarter!”

However a business function is implemented (e.g. outsourcing), it’s always considered integral to the operation of an organization.

Units like design or innovation lab/hub/centre are often functionless.

In that case, proving ROI of things like design can be incredibly challenging, because it’s often a catch-22 scenario: if the unit is not properly supported, it can be extremely difficult to demonstrate ROI; while if the unit can’t demonstrate ROI, the management won’t support it.

Management may question the performance of a business function (and upon issues, they’d undergo reformations to revamp it), but they almost never question the ROI of it.

By contrast, management would almost always question the ROI of a functionless unit, especially when things like design or innovation is the primary operating feature of that unit.

There’s nothing wrong with questioning the ROI of a functionless unit, nor with asking them to prove their value, until it becomes an unfortunate habit of avoiding accountability while making self-fulfilling prophecies of failure.

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