Over the years I have often heard bitter complaints about “Silos” within organizations, and have seen many attempts to dismantle or at least de-claw institutional “silos” – sometimes with limited and short-term success, and other times with deleterious results.
In this blog I argue that these divisional boundaries are not just a natural manifestation of vertical specialization common in almost all large organizations, but that they are also vital and indeed necessary for the smooth functioning of the organization itself.
The counterparts to silos, and ways to deal with the downside of silos will also be discussed.
Silos – The Causes and the Upside
Once any group reaches around 70-150 people, it naturally fragments and if you want people to focus on key objectives and deliverables, vertical structures are close to mandatory in order to achieve success.
The reason we need to have a Customer Support division in a vertical structure distinct from Consulting, Sales, HR, etc. is that each needs to focus on deliverables and goals and not get distracted by what other groups are doing.
Paying attention to the job at hand and staying on track with the KPIs and metrics common to the others in that divisional group is vital to delivering the desired results.
So the silos have to stay – unless you can afford to have people just doing whatever they feel like doing.
A counterargument to this is of course the Open Source or Crowd Source example, where the job gets done simply because people who may only contribute a single thing will do so out of intrinsic interest.
However, while this is clearly a model worth looking into, at this point it is unclear whether these discretionary acts are actually a form of parasitism on the traditional work structures – i.e. people tend to only donate excess capacity to Open Source when they have already secured a formal occupation that pays the bills.
Silos represent one of the few strong points of Taylor’s “Scientific Management” – keeping goals clear, simple, and tightly measured usually results in achieving desired results with a minimum of waste of resources or time.
The Downside to Silos
The complaints about siloed behavior are not without cause and many firms have seen internecine warfare erupt amongst divisions over resources, and all of us must have witnessed poor Organizational Citizenship Behaviors that result from an “us vs them”" sentiment within a company.
It is even quite common to find that divisional goals and metrics are mutually destructive – that the success of one division leads to damage to other divisions, sometimes even to the point that one division will pursue goals in a manner that does irreparable damage to the organization as a whole.
You might even have wondered if that division wouldn’t be better off working for the competition!
I have seen cases in which a Networking Sales group of a company refused business on the grounds that it wasn’t in their group’s best interests, but which resulted in disqualification from tendering on far more lucrative tenders for several other divisions in the same firm.
Likewise I have witnessed a Consulting team achieving fantastic results and plaudits all round for implementations that caused long-lasting damage to the Customer Support group and resulted in severe customer dissatisfaction.
A final example is of a sales-team that overachieved quota, but at the expense of both the Consulting group and the Customer Support division, and which virtually crippled the R&D team for years.
In all these cases the achievement of narrow goals and single-minded focus of one silo caused more harm than good when viewed from the perspective of the entire organization.
A second area of damage is degradation of skills and diminished organizational learning.
Divisions are usually largely homogenous in terms of goals and objectives, but are often diverse in terms of functional expertise – several different divisions might each have similar roles, for example salespersons, project-managers, managers, and so on.
By segregating project managers from each other and embedding them in distinct divisions one achieves better focus, but at the cost of loss of knowledge and reduction in organizational learning.
Mistakes tend to be repeated across the organization and discoveries or innovations in one part of the firm may never be utilized or even known in another.
There are two basic approaches to dealing with the negative side of Silos
- Managing them
- Balancing them
Managing Silos – The Leadership Way
The conflict can be solved by leadership at the executive level, and senior managers need to be aware not only of where their division fits in the overall scheme of things, but also how their actions impact other divisions. Often the term “Leadership Team” is more a desire than actuality, and unless there is real teamwork between the managers of different interdependent groups, Organizational Citizenship Behavior (OCB) amongst staff is unlikely.
It isn’t enough to just be friendly in the boardroom – OCB must be visible in the actions of the leaders, and embodied in their presentations and memos, and other communications within their group must be peppered with references to cooperative activities and policies, and must contain specific examples of cooperation and interaction with other groups.
If this isn’t done consistently, continuously, and deliberately, an “Us vs Them” mindset in staff is the default that will slowly creep back in as the operant behavior pattern.
Celebrating the successes of other departments is a good example of highlighting that “they” are “Us”.
Balancing Silos – The Community of Practice Way
To solve the problem of fragmented disciplines and the degradation to Organizational Learning, it is necessary to re-connect the areas of expertise in a way that enables cross-pollination and information flow without diluting their departmental focus. The command & control hierarchy needs to stay according to the organizational chart, but a new, informal structure such as the Community of Practice (CoP) should be built in order to let SMEs communicate with and learn from their peers.
A CoP of Project Managers, for example, enables “lessons learned” to be spread beyond divisional walls, and also opens up the opportunity for innovation – such as when PMs in one division mature a process that can be imported as a practice by another.
CoP’s cannot however be created by fiat – you cannot simply decree that one exists and then expect it to flourish. Instead it occurs by intrinsic reward and attraction, and with the support of the organization through provision of time, space, tools, and acknowledgement.
What the formal organizational structures can provide is resource support in the form of infrastructure such as meeting time during office hours, occasional travel funding, stationary and supplies, meeting rooms and equipment, and the like.
The bigger support though is intangible – it is the explicit and tacit acknowledgement of expertise by management all the way up to the CEO, visible respect for the fact that the organization has experts in the domain, and some degree of deference to that expertise.
It becomes visible in simple but powerful messages – like when a management meeting is rescheduled or relocated to a different venue when it clashes with CoP meeting or event. This sends a clear signal that expertise is a highly-valued quality, and that demonstrating one’s expertise in an organized fashion earns respect.
That respect engenders awareness, identification, and a desire to contribute and participate.
Silos are a natural part of the corporate ecosystem and need to be retained, but like any organism, may need to be pruned or trimmed occasionally. Silos can be kept healthy by managing them properly in ways that show the interdependency of each and its relationship to the success of the whole, and by balancing the formal structures of the Silos with the informal structures of expertise to be found in Communities of Practice.
That’s my story and I am sticking to it.
Matthew Loxton is a Knowledge Management professional and holds a Master’s degree in Knowledge Management from the University of Canberra. Mr. Loxton has extensive international experience and is currently available as a Knowledge Management consultant or as a permanent employee at an organization that wishes to put knowledge to work.
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