Breaking Out of Silos
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Breaking Out of Silos

How transversal management can overcome organizational silos



Thursday 13 April 2017



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Organizational silos are without a doubt the most widespread managerial structure, even though all management textbooks warn against them. This is true for all kind of organizations, be they businesses, public bodies or non-profit organizations.

At the theoretical level, Paul Lawrence and Jay Lorsch developed a contingency theory in the 1960s in which they underline the need to integrate separate entities through transversal processes. In their landmark book, Organization and Environment: Managing Differentiation and Integration, they highlighted the importance of “differentiating” entities within a company, helping them to adapt to their respective environments. But they also recommended establishing integration mechanisms between these different units to ensure their overall transversal cohesion.

More recently, and from a more systemic perspective, there is abundant academic literature celebrating the virtues of organizations as networks of interdependent actors. Information technologies are often presented as a powerful catalyst for such a mode of transversal collaboration within companies or even among different companies (this is particularly true for complex projects such as smart city schemes). However, for the large majority of organizations, managing by silos remain the default form of management.

What defines managing by silos? In those organizations, managers devote a significant amount of energy hoarding knowledge. They minimize staff mobility and avoid the pooling of resources between departments or business units. The emphasis is on appropriating internal resources, particularly skills and knowledge, and then jealously guarding them. The main risk with such an approach, apart from waste (constantly re-inventing the wheel, investing multiple times to reach the same outcome), is that of focusing the organization’s energy inwards and not outwards, at the expense of a better understanding of competition and market trends.

 

The real question is: how can we move away from this type of organization?

There is no magic wand solution, but there are concrete initiatives that can be taken to move in the right direction. The first action priority is to work on changing employees’ mental models, starting at the top of the company.

In my empirical research, and in my experience as a consultant for numerous organizations in various countries, I have observed that it is often at managerial level that practical actions to perpetuate silos are the most pronounced although they may preach the exact opposite. The teams led by such managers are often obliged to operate in a compartmentalized fashion, even though they would prefer to exchange and share information. Employees are often frustrated in such situations, although they cannot take concrete action to change them without running the risk of punishment.

It is often useful to run an audit in order to bring dysfunctional aspects to light and make them discussable. The involvement of an external facilitator can be invaluable in this process. Executives and managers frequently accuse their own colleagues of perpetuating silos, without realizing that they too are contributing to this situation. They need to become aware of their own behavior so that a process of genuine change can be implemented.

Then, you have to cascade this awareness-raising process throughout the whole company, with workshops focusing on overcoming organizational silos and promoting transversal management. The lower you go in the company hierarchy, the weaker the resistance to change tends to be. We noticed that employees who are not in managerial positions are often eager to share knowledge and work transversally!

Setting up transversal project teams can help to open up breaches, eroding the barriers between different structures. These project groups should be composed of employees from different departments and entities, focusing on topics of general interest such as “how to strengthen innovation,” “how to boost responsiveness” or “how to be more customer-centric.”

Training programs on transversal management is often required for the teams involved. Methodological sessions can be usefully backed up with “action learning projects,” which serve as laboratories for transversal experimentation (and learning). But it is important not to lose sight of the real objective: this should not be a one-off initiative as the aim is to change the way the organization functions as whole. The challenge is to make the transition from managing a specific project to adopting a project-based management style.

Another important lever on which we can act is the promotion of mobility between different units. The HR Department should work to identify high-potential employees and make the coordination of their career paths a top priority. Here again we must overcome the reticence of some executives and managers, who may be keen to keep the best employees for themselves. The aim is to put the general interest first. Employees are not prisoners, and high-potential individuals who see no potential for advancement will simply seek out new opportunities elsewhere. We must help managers to realize this, showing them that by acting as mentors and nurturing the development of their subordinate, they can create value for the company. Those who consider that helping high potential employees seizing attractive job opportunities is part of their role also benefit from it as they strengthen their personal network!

Last but not least, we should not underestimate the importance of team building programs, sports and cultural activities involving different units of the same organization, which can make a major contribution to breaking down silos. Interpersonal relationships have the power to sweep away barriers by creating interpersonal networks. Technology can facilitate this cooperation, for example by enabling employees to become part of communities of practice which transcend organizational barriers. Exchanges between colleagues occupying the same post or working on the same project are an undeniably enriching experience for employees… and the organization.


HEC Paris, a leading global institution





 
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