If bees stayed in their hives every day, the miracle of cross-pollination — which creates the bounty of fruits and vegetables that we eat daily — would not occur. Which begs a question: Do your employees engage in corporate cross-pollination at work? Or, to use another agricultural metaphor, do they remain comfortably ensconced in their silos every day, never venturing out into other departments to fertilize the workplace with ideas and innovations?
Odds are that they do more of the latter and very little of the former. And the result, while it may not be visible to the naked eye, is a kind of organizational sclerosis that stifles innovation, if not growth. After observing this problem for years, journalist Gillian Tett, the managing editor of the American edition of the Financial Times, has written a book about it called, The Silo Effect: The Peril of Expertise and the Promise of Breaking Down Barriers.
“We need to think about our assumptions and recognize that if we don’t stop to think about how we organize ourselves, we will be beset by tunnel vision,” Tett says, explaining the premise for her book. “Modern corporations tend to have very strict ideas about how departments should be organized and separated from one another. And in the end, this creates tunnel vision that blinds us to opportunities – and to risks.”
As an example, Tett cites Sony and Apple. The latter created the iPod, arguably one of the most transformative consumer products of the modern era. Sony did not — even though it had all the resources to do so. “Sony dominated the world of consumer electronics in the 1970s and 80s and created the Walkman, which defined an entire product category. They had everything in place: incredible brand recognition, amazing computer power and a music label. So the question we need to ask is this: Why on Earth did Sony not create the iPod?”
Actually, Sony did create an iPod-like device — three of them. And therein lies the problem; the trio of digital devices cannibalized each others’ sales, creating a vacuum that Apple later exploited. How could this happen? “Sony was very siloed,” Tett asserts. The software, hardware and content (music) departments were so deeply inbred in the company that they ended up producing several versions of digital Walkmans instead of one.”
Ironically enough, the reason most companies are similarly organized stemmed from nothing but good intentions. “We all want to organize and make things effective and efficient,” Tett points out. “Without order, you drown in chaos. But the tragedy of silos is they arise from this sensible, reasonable impulse. If we become too rigid and accept them unthinkingly, we get mastered by them.”
Missed opportunities aren’t the only victims of silo-think. Many companies also miss potential risks as well — liabilities that occur because the proverbial head doesn’t know what the hands and feet are doing. Witness the breathtaking financial losses — billions of dollars — that occurred in 2008 at Swiss banking giant UBS AG, where company officials didn’t realize the extent of different divisions’ investments in subprime mortgage securities, she notes.
So what can be done to kick-start the silo-destruction process? For starters, consider the old adage that says the first step toward solving a problem is recognizing you have one. “I know it sounds incredibly obvious, but it’s amazing how few companies actually do it,” Tett says.
Next, take steps to ensure that the departmental boundaries used to organize your company are fluid. As an example, Tett cites Facebook, which has devised cross-departmental policies in an effort to “become the anti-Sony,” as Tett puts it. “They rotate people periodically so they work on different teams, which stops them from establishing only in-looking boundaries.”
Facebook and other progressive companies also utilize architecture/building layouts to force employees to walk around and bump into colleagues from other departments. “They’ve also introduced a rule that employees can’t call anyone on another team anything but their Christian name,” she adds. “That keeps the focus on whole, real people, rather than one-dimensional stereotypes, which leads to the creation of tribes.”
The noted Cleveland Clinic tore down its figurative silos by reorganizing according to customers’ needs, as opposed to a doctor-driven hierarchy. In simplest terms, it organized the hospital in a way that would make sense to its patients, creating departments based on body parts (brain and heart, for instance), rather than on disciplines such as neurosurgery, Tett points out.
“They broke down the rigid doctor-driven silos and replaced them with patient-driven silos instead,” she explains. “Now they have a brain institute and a heart institute and so forth. … The key point is that in the brain department, they have neurologists, neurosurgeons and so forth all sitting together, rather than neurosurgeons in the surgery department and neurologists in the neurology department. As such there are less interdepartmental transfers, which reduces costs, too.
“This kind of organization can be applied to many different fields,” she continues. “We all unthinkingly use a classification system, but if we get locked into it, we tend to get very rigid. And if you start rethinking it, you can unleash a lot of innovation.”
The clinic also minimized the distinctions between doctors and nurses, which results in a more integrated form of treatment. “As organizations get big and professions get specialized, they tend to become more bureaucratic and fragmented,” Tett says.
Whatever your company or group decides to do in order to deconstruct the silo mentality, don’t expect smooth sailing. Silo-busting usually requires trampling on some employees’ turf, and loss of power will likely spur certain employees to resist the new initiatives. “The reality is that people in charge of divisions will want to protect their own home turf,” she notes. “Benefits that seem very obvious later on aren’t always obvious at the time if people are completely bound by their cultural rules.
“To combat this, you need to create incentives, lead from the top and show people how breaking down silos can result in innovation and creativity,” Tett says.
In other words, silo-busting will get that corporate beehive buzzing — and prompt some serious cross-pollination of fertile ideas within the workplace.
