Who Moved My Silo?
When high walls and self-centered actions have a place in your
organization (and when they don’t).
Just down the hall, Dr. Joe’s engineering department is just
simply not playing fair. His administrative assistant is not in the rotation
for switchboard coverage. Their expense
reports don’t have the required receipts attached to them, yet they get
paid. They infrequently show up to the
weekly staff meetings. They go around
H.R. when hiring. Dr. Joe’s casual Friday’s
are cringe-worthy. Information flows into
Engineering, but the sounds of crickets come out. How is it that this
department is not held to the same standards as everyone else? Why isn’t the VP addressing this disruptive
situation? Surely, there has been a
great deal of grumbling amongst the rest of the department heads. And now, it’s effecting turnover outside of
engineering. This silo has apparently not kept everything inside its walls.
“Silo” is a pejorative business term and no institution,
whether academic, commercial, or non-profit is immune from the silo’s
impact. Despite its relatively recent
negative connotation, the silo is not a new invention, and only gets the
moniker when others are negatively impacted.
That silo down the hall from your office, didn’t naturally occur. It was purposely established and while not
inside of it, you helped with its construction.
But maybe it’s not a mere silo.
Building
Silos
Silos are a metaphor for closed-loop internal business
communication and function. Resources
and communications are held close to the vest.
Silos might be constructed in your organization indirectly as a result
of contractual obligations. The client
has contracted for dedicated space/staff/equipment. Accounting practices may make it easier to
limit the number of hands working on a project so as to track the specific
FTE’s used on the project/product. Or specific training for the project for
very few individuals make that skill set difficult/restricted to pass on. Example:
Working with radiolabeled compounds may require hours of training by an
external source. Thus when one needs
help to get past a bottleneck, there are only a handful of people that can be
called upon to assist with the burden. Once that finite skill set is
contractually obligated to inhabit a silo, the remaining projects needing that
scarce resource will have a difficult time meeting their milestones.
The president of your organization wants to provide the new hired gun with all of the resources he
needs to get the job done. The CFO wants
that specialist to be fiscally conservative and share resources. These
are often diametrically opposed actions. One is a silo building action and
the other is a silo busting action.
There are Six
Irrefutable Laws of Silo’s
1.
A silo
will persist as long as it is profitable for the organization.
The hiring director woos a
specialist to join the company with the promise of dedicated staff, etc. The
length of the honeymoon is dependent entirely upon the profitability, bid
success, innovative output or the positive industry recognition gained by the
specialist in his silo., Performing
below promises or expectations, gets a monitored honeymoon with a shortened
silo or it may be engulfed into a different silo.
2. A silo is either a fortress or a prison.
In the obscure 1965 Movie, The War Lord, Charlton Heston’s Saxons
occupy a (silo-shaped) fortress in hostile Friesian territory. After some
questionable “public relations” decisions their castle becomes their prison as
the locals gain control of when the Saxon’s can freely leave their
quarters. Whether a silo is a fortress or a prison depends entirely on which side
of the door the key is on. Similarly, the silo in the department
down the hall may be keeping a toxic influence out or it may be keeping a contaminant contained inside. The hiring practices over in the engineering
department may not be appropriate (or legal) but at least they are isolated
away from your department. Conversely,
their perspective may be that they have discovered a fast track to expense
reimbursements and it might ruin their advantage if they let the secret out and
everyone took the shortcut. If everyone
is on your road, it’s not a shortcut for long.
3. Silos which are contractually established for
dedicated resources are impervious to process improvement programs.
It will not matter that a six
sigma program determines a new process that makes better use of labor or
equipment. If that new process involves
sharing the government-purchase electron microscope rather than have it sit
idle for 3 days/week. Then that new process will be contractually forbidden.
Similarly, if PharmaXYZ has exclusively leased 10,000 square feet of laboratory
space for their short notice development testing, they will not be a client for
long if you utilize that space for BiotechABC for 1 week a month, simply
because you did not schedule effectively.
Other organizations are limited
contractually to provide dedicated equipment, laboratory space or staff
members. These situations inherently
create silos. Government contracts will
create silos of expertise and/or equipment.
Companies which secure government contracts may purchase a specific
piece of equipment, eg. Gas chromatograph, to be used for the government
project. When that piece of equipment is
idle, it cannot be used on any commercial work, unless it was contractually stipulated
to be allowed. Thus a wall is
erected. Had the equipment been leased
on a per sample basis, then it could be used on commercial work. If the contract is based on FTE’s and the
FTE’s were to be Ph.D. level staff then the silo is erected around the Ph.D.’s and
therefore cannot be utilized to troubleshoot commercial project which may be facing a
deadline issue.
4. Incentive/Bonus programs reinforce silo
construction.
Cooperative sharing incentives for
localized leadership will expand the diameter of the silo. Incentive programs
constructed to turn lack luster groups into profitable ones, which contain no cooperation clause will
establish/reinforce “every man for himself” strategies by the incented one.
5. A
silo will be replaced by a silo with a different scope of influence.
Sometimes
called “realignment”, it may take time for the organization to recognize it
that the new organization is just a different configuration of a silo. Business Development, Marketing,
Communications and Social Media units will merge and morph into each other and
then subdivide again in varied combinations.
The break up will occur once the silo is recognized as having diminished
effectiveness. e.g. Why doesn’t Marketing talk to the Business Development
group? If we put them in the same group
they will have to work together.
6. If the CEO didn't want silos,
there wouldn't be silos.
How the entire organization is
structured will be a determinant if silos are intentional. Those enviable
start-ups are nimble because they operate in an environment where every
employee is unselfishly driving towards the same goal and they know they cannot
achieve the goal without the collaboration of the entire team. The CEO
(COO/President/General/Dean) paints the vision for the organization and
assembles the team. When the CEO has not created this environment, at the
organizational meeting it will be apparent to the most casual observer whether
a departmental update comes as news to the other departments. Retracing steps
or rehashing issues are evidence of siloed organizations.
Silos
(sometimes) Have a Place in Your Organization.
Organizations with departments with different funding
sources or with strikingly different regulatory requirements are keenly poised
to create silos. This does not have to be a negative situation if the entire
organization understands where expense and resource lines must be drawn. These are siloed organizations by design. Mergers
and acquisitions hold the greatest challenge for silo busting. Maintaining that unique identity of
the acquired group must first be determined if that is essential for continued
success of the organization. Otherwise,
let the silo busting begin!
