Silos: Don’t You Just Love ‘Em?

On the lowest rungs of the corporate ladder, somewhere below the yes-man, the department bully and the person from audit, sits the siloed thinker. Everybody, loves to hate them: they’re un-collaborative and don’t see the bigger picture. Few truths are more proclaimed by business schools as self-evident: a company whose component parts are allowed to run as silos loses the ability to derive value from the sum of its parts, and eventually goes out of business.

So if the siloed thinker is so destructive, why do they not just exist, but thrive? Anybody who has kept a grain of honesty through corporate life will attest to the fact that silos resist every CEO’s attempt to kill them off. Well, the ugly truth is that, deep down, most people prefer working in silos. Why is that? Well, to plagiarise a grizzled survivor, “because stuff gets done there…”

The silo cuts out the noise and the clutter of the world beyond your immediate focus and reduces corporate complexity to a level that, most  of us are able to work with. Inside them, authority lines are simpler and it’s clearer who’s accountable for what – and whether or not they’ve done it. Any person with a looming end-of-year review knows that time spent in collaborative working groups and trying to drive multi-department action is time spent away from what they are really going to be judged on by their line manager.

Unfortunately, there is no denying the fact that this does eventually cause real damage to companies. For example, a siloed department finds, develops and maintains the data it needs to work effectively. The data developed by other departments is likely to share the same base and require many of the same business and technical processes to make it available and useful, but that work will be done in a silo. Consequently, the views of the company conveyed by each department will often differ significantly creating intractable issues at the layers of the organisation that are specifically designed to build bridges between silos.

Once this data becomes encased in legacy systems and processes, it becomes almost impossible to break out of operational silos, which then start perpetuating. Past a certain point, different parts of the organisation are essentially being run without reference to the other and the enterprise is no longer deriving a coherent view of either itself or the competitive landscape. Starved of the ability to work meaningfully on the basis of shared data, collaboration between functions becomes little more than a set of theoretical aspirations on Powerpoint.

The advent of the cloud and platforms that are designed to enable collaborative working is spawning exciting new opportunities to derive value from data far more effectively. The irony, however, is that the companies that stand to benefit most from this are precisely those described above and they are less likely to invest in new approaches given the corporate outlook that inevitably develops when so much of your attention is spent managing your own complexity.

Mature large companies are treasure troves of data which can’t be exploited properly because it won’t flow across departmental boundaries. These companies are unlikely ever to be able to manage their own complexity except through silos. Unless they find ways of making it easy and practical for data to flow between them, and enable cross-functional collaboration that draws on the resources of the whole company, they won’t be able to translate legacy assets into current value. Ensuring that your departmental silos can collaborate effectively is the mature company’s equivalent of walking whilst chewing gum. Those who find a way to do so will enjoy a new lease of life. Those who don’t will doubtless still look like orderly places for the remaining years it takes to be slowly managed out of business.

We would love to hear how others have worked to navigate the department silos that we all love to hate.