“The Silo Effect” puts your business to the test

“Why do humans working in modern institutions collectively act in ways that sometimes seem stupid?”

That’s the motivating question behind Gillian Tett’s The Silo Effect: The Peril of Expertise and the Promise of Breaking Down Barriers. Tett, the managing editor in the U.S. for the Financial Times, combines her professional background in finance industry reporting and her academic background in anthropology to reach some damning conclusions about the way well-meaning businesses fall victim to their own success and fail to collaborate effectively.

“Many large organizations are divided, and then subdivided into numerous different departments, which often fail to talk to each other—let alone collaborate,” she says.

When we identified the 9 types of collaborators most likely to roam your office corridors, we put a spotlight on the reclusive Siloist. At an individual level, these collaborators can wreak havoc by constantly working offline, creating versioning headaches, and annoying project managers with their lack of transparency. At an institutional level, silos can be ruinous. Tett charts a few prominent examples from different sectors. We’re not talking merely about businesses being passed by their competition—though she explains in detail how silos prevented Sony from successfully moving from the Walkman era into the digital age—but about 9/11 and the banking collapse. Big stakes.

In other words, The Silo Effect is a perfect passive-aggressive gift for the silo-friendly status quo soldiers in your life.

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Do you spot any of these silos? (They aren’t all identical)

When we talk about silos in business, we are typically talking about teams not communicating with one another. Sometimes this is the result of territorial mentalities, other times it’s just the result of “business as usual.”

Tett cites corporations taking silos to the extreme, establishing separate P&L accounts for different departments (a Wall Street model that found its way into vogue for consumer goods and other industries). In this model, there’s little incentive for cooperation or risk-taking.

Silos can also exist within departments, as when engineers are siloed according to project. Tett uses Facebook as an example of a business that avoided this despite the sort of rapid growth that often transforms company culture for the worse. At Facebook, leadership began moving engineers around on different projects, giving workers opportunities to recharge and find passion projects.

Tett quotes Facebook engineering leader Jocelyn Goldfein: “On a day-to-day basis nobody in the company has time to understand what everyone else in the different project teams are doing. But the key thing is to get this rich surface of community and information sharing, in whatever way you can.”

Silos are usually seen as contained within an org chart, but Tett makes a different case .

“The crucial point to note is that the word “silo” does not just refer to a physical structure or organization (such as a department),” she says. “It can also be a state of mind. Silos exist in structures. But they exist in our minds and social groups too.”

The meltdown on Wall Street is perhaps now the classic example of this particular type of silo.

“Networks of experts can become captured by silos, in the sense of displaying blinkered thinking and tribal behavior, even if they work in different institutions and countries,” Tett writes. “This is not a problem that is unique to the economic profession.”

Is your office designed to break or reinforce silos?

We’re a technology company, but we’ve long been singing the praises of rolling up your sleeves and doing some good old-fashioned demolition of some physical barriers that prevent collaboration. This isn’t just about scrapping cubicles for open floor plans.

Silicon Valley is a pioneer in this category—Tett again pays a visit to the Facebook offices to show how they’ve leveraged creative architecture and the design of their “campus” to help promote the sort of synchronicity and collaborative happy accidents that can have a massive impact on innovation—but it’s a mistake to write this off as something the kids are doing. Tett also details how the Cleveland Clinic adopted some of these same philosophies, and not without controversy in the beginning.

Is your technology designed to break or reinforce silos?

It’s great that your CMO and CIO are talking to each other, perhaps while sharing an artisanal cheese plate during a tandem bicycle ride through your company’s sculpture garden. But are your documents confined to silos? Is data from your account team on speaking terms with the data in other departments?

Here, again, Tett points to behemoths and bureaucracies capable of possessing enormous amounts of information and knowledge, but lacking the systems in place to put it all together, and, just as critically, lacking the collaboration champions who will make it a priority to maintain a steady flow of information from one end of the org chart to another.

Is your business speaking the language of silos?

A real commitment to collaboration requires a serious consideration of company culture. Sometimes we reinforce silos without even being conscious of it. In her chapter on Facebook, Tett explains the lengths to which the company has tried to remain vigilant.

“If we ever catch anyone using a depersonalized moniker then you interrupt them and stop them,” she quotes Mike Schroepfer (the now-CTO) as saying. “We never let people refer to anyone else as, say, ‘those idiots in team six’ or ‘those stupid marketing guys,’ since it is one sign of dehumanizing a group. When you don’t know who people are and depersonalize groups, then you get into problems.”

A final word of warning

The Silo Effect is divided into two sections, each revolving around case studies. The first tells the stories of businesses and industries that didn’t see the silos until it was too late; the second takes a more inspirational view. But it isn’t a happier-ever-after story with a magical formula.

“Mastering silos is not a task that is ever truly completed,” Tett writes. “It is always a work in progress.”

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