Over the weekend I stumbled across an article Why the silo effect makes us stupid? by Gillian Tett. The article is an extract from the book, The Silo Effect and offers an insightful analysis into the area of silos and silo mentality. I’m no expert in this, but was amazed at some of the examples that were highlighted in the article and made some notes for myself which I am sharing in this post. Please keep in mind, the following is my interpretation of the article so kindly forgive any mistakes!
The silo effect is particularly relevant to financial services in the current climate of disruption from new financial and technology based start ups, and the sometimes failure amongst incumbents to recognise the threats and risks to their traditional business models.
What is Silo Mentality?
This is my interpretation – The silo mentality is where business units within a company operate as separate and competing entities with little collaboration or motivation to achieve a shared and common objective.
Who Suffers from Silo Mentality?
Now this was the most surprising thing for me! Silo mentality can seemingly strike any organisations at any time. The examples highlighted include: Sony, UBS, BP, the CIA, UK National Health Service and General Motors
This got me thinking, silo mentality can operate at an organisational level but individuals make up an organisation. Surely these organisations and the individuals therein aren’t blinkered, are they?
We Need Silo Mentality…
…Yeah! Christine Lagarde, Head of the International Monetary Fund (IMF) explains “The world has become a hum of interconnected voices and a hive of interlinked lives”.
So in a world that is increasingly complex, connected, intertwined and where the boundaries are blurred we need silos in order to make sense of the world around us. Gillian Tett explains that “Silos help us to tidy up the world.”
The Problem with the Silo Effect:
Keep in mind that we’re speaking about the silo effect from an organisational perspective. From this organisation perspective the objective must be to achieve a common and shared vision and goal. But the silo mentality prevents this because:
- Silos often create their own products, competing with other silos or business units within the organisation with little or no perspective of the partnership opportunities
- There is little collaboration and combined innovation
- Externally, rather than operating as a single organisation, the company operates as a series of fragmented and unorganised business units
- Instead of competing with other products in the industry, the silos within the company compete with each other and cannibalise each other
- Tunnel vision takes command within the organisation, and external “threats” are not recognised
- When the left hand doesn’t know what the right hand is doing, you’re in trouble!
How to Prevent Silo Mentality:
Various preventative methods are highlighted by Gillian Tett, but in summary the following are seen as good ways to prevent the silo effect from embedding itself within a company:
- Create a shared vision and common goal that spans across your organisation
- Staff rotation – encouraging the movement of employees from one department to another
- Encouraging collaboration through knowledge sharing sessions, social and business related cross-organisational events & meetings
- The use of technology to enable cross organisation communication
- Encouraging rewards, even salaries, according to the company’s collective performance
- Creating communal spaces where employees from across the company can mingle
Examples within Gillian Tett’s article include Facebook, BlueMountain Capital and Apple. The Apple example is pretty cool, citing the development of the iPod by brainstorming ideas within Apple across multiple product categories. The rest as they say is history….
Silos and Anthropology
For me this was the really interesting bit! Gillian Tett completed a PhD in cultural anthropology, so her work as a financial journalist is analysed and interpreted through that anthropological lens.
I wasn’t really sure how the 2 – anthropology and silos – were connected. But Gillian explains that silos have a lot to do with the culture within an organisation. And anthropologists spend a lot of time analysing classification systems, the process of classification is something that is inherent in human culture.
Still with me? Ok, Gillian continues to explain that silos can be brought down when you “…question boundaries, challenge classification systems, and try to reimagine the world”. Pretty cool stuff, eh? Now the people that challenge silos, aren’t they often the leaders – in the true sense of the word – around the world?!?
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See Beyond YOUR Silo
I was truly fascinated by Why the silo effect makes us stupid? and would encourage you to take a peek. The thing that struck me most in the article were the provided examples, these are huge companies with highly intelligent people. I’m sure at some point they had external consultants providing advice on best practices and all the rest of it. Yet, they were still operating as silos. Clearly, tunnel vision is a double edged sword.
The article also highlighted the responsibility of individuals to recognise and challenge the silos they see around them, not only in their professional but also their personal lives.