The silo was invented as a place to store grain. And that’s it. There’s evidence that silos were used as long ago as the 8th century in Greece. The first modern silo, a wooden one, was invented and built in 1873 by Fred Hatch in McHenry County, Illinois.
As specialization became the norm in corporations, the term silo was adapted for corporate use. Which brings us to the state of the corporation today.
How many times have we heard the word “silo” used to describe a corporate structure that is so specialized in its various functions that it reaches a certain level of helplessness? How many managers have we seen shake their heads in frustration and say, “We’re just too siloed to get things done quickly,” or “We could do that if we just weren’t so siloed.”
One wonders why the people in different departments of an organization can’t try to understand each other and collaborate, or even just talk. Instead, they observe from atop their silos and wonder why things don’t work. The accountants don’t understand sales. The sales people don’t even understand the technical people. The literature mavens think the chemists are out of touch and they have absolutely no use for the business department. I-bankers don’t understand traders and the bricklayers and carpenters and electricians have equal disdain for each other while working on constructing the same house.
As the legendary comedian Oliver Hardy once said, “Well, here’s another fine mess you’ve gotten me into.”
Fortunately, a very bright cultural anthropologist, Dr. Gillian Tett, has offered some light on the subject in her new book, “The Silo Effect.”
She notes that too often, “the problem of silos is left to management consultants who come bearing new organizational charts.” But according to her, silos are a cultural phenomenon that result from “a dense set of rules, traditions, and conventions that we have absorbed from our surroundings.” In other words, they occur when we classify the world around us and resist any effort to change those classifications.
She cites a couple of examples. In 2005, Sony hired their first non-Japanese CEO, Sir Howard Stringer. The company once famous for the Walkman now languished because of Apple’s introduction of the iPod. In his opening address to his staff, Sir Howard pointed out that “Sony is a company with too many silos.” The term “silo” was unfamiliar to the Japanese and, out of desperation, it was translated to mean “octopus pots.” The rest did not play out well. The team that had worked on the PlayStation wanted nothing to do with the team making televisions or music. Sony continued to produce gadgets that did not work together. In a ditch effort, Sir Howard organized the gadgets in a display to demonstrate how they didn’t work together, hoping to shame his employees into breaking down walls but they did not. Instead, they clung to their own creativity.
The Bank of England became equally hobbled when they failed to predict the Great Recession. The problem, according to a former deputy governor of the bank, Paul Tucker, was over-specialization. Only a generalist could have seen how broken everything was.
So, what to do about the Silo Effect? Dr. Tett points out that at Facebook, Microsoft is considered “the great horror, a once-dynamic innovator turned laggard by its siloed operation.” Desperate to avoid such a catastrophe, Facebook employees are rotated around projects, urged to switch teams, given new challenges. They encourage group activities so people know each other. They have slogans like “Move fast, break things! Done is better than perfect!” In meetings, no one is allowed to talk about “those idiots on team six” or “those stupid marketing guys.” Everyone is referred to by name. They avoid depersonalization. Employees are first, job titles second.
Doesn’t sound like a bad idea, does it?
(This post provided by MDB Communications, a Capitol Communicator sponsor.)