It’s time to cure the vast array of symptoms of silo sickness in organizations. These symptoms creep up and spread, before people realize where they are coming from. The reason the symptoms spread is because an organization is a living organism, a system. Dividing an organization up artificially into silos not only creates the disease of silos, it prevents the cure.
What kind of things go wrong when silos are allowed to exist and dominate? For individuals, there are many implications. Communication does not flow easily where it needs to. People do not have the authority to carry out the tasks for which they are responsible. Careers are limited because people work for a boss who has to improve their own performance in a vertical way. This means that competencies, both technical and managerial, do not find a natural way to develop. This creates frustration due to artificial “ceilings”.
The worst faults caused by silos
At the organizational level, departments carry out their work based on the local measurements and therefore local optima, losing sight of the overall goal of the organization. Production, for instance in the steel industry, can be completely uncorrelated with sales. This is because there is no feedback mechanism within the organization.
We can summarize the three worst faults in an organization that operates in silos as:
- no feedback
- no visibility of the customer in the organization
- no learning cycle based on feedback
Even more dramatically, silo sickness means that the larger implications of cause and effect relationships that happen in organization are totally disguised. It takes time for the effects of a cause to propagate through a system. People have no means of understanding the implications of their local, silo-ed decisions on the big picture. Even the heads of functions are blindsided to them.
For example, let’s say that the VP of operations decides to cut 5% of maintenance costs. A moment will come when the organization is unable to make a sale because it us unable to deliver what it has promised due to breakdowns, and nobody will ever know that the problem originated in the cut in maintenance costs.
The Network Solution
When silos exist in an organization, they will always make decisions on what is best for themselves as opposed to what is best for the organization as a whole because that is the way that they are measured and rewarded.
What is the alternative? We need to understand that organizations are not made up of parts. Organizations are organic wholes, they are living systems. Consequently, the most effective way to build an organization is as a network. More about that in the next post.
About the Author
Angela Montgomery Ph.D. is Partner and Co-founder of Intelligent Management, founded by Dr. Domenico Lepore. Dr. Montgomery’s new business novel+ website The Human Constraint looks at how Deming and the Theory of Constraints can create the organization of the future, based on collaboration, network and social innovation.