In this Blog I am going to write about organisational silos, team-working and some implications of big data for these two areas.
My recent reading of Gillian Tett’s The Silo Effect: Why putting everything in its place isn’t such a bright idea, The Economist Schumpeter – Team Spirit – Businesses are embracing the idea of working in teams and Managing them is hard and Collaborative Overload by Cross, Rebele and Grant in the Harvard Business Review, re-sensitised me to a classic organisational dilemma. Optimise performance in a component of a business by establishing strong teams that are allowed to insulate themselves – perhaps in Silos – or focus on removing all internal barriers to optimise cross functional excellence and agility. Reflecting on these very different texts and relating them to my experience in a spectrum of private and public sector organisations has reinvigorated my belief that Leaders can do more to optimise a balance between building efficient teams (ones that develop excellence within their particular domain) and enterprise wide effectiveness that minimises internal silo barriers to optimise agility.
Gillian Tett earned a PhD in anthropology before becoming a Financial Times reporter and uses this pedigree in her investigations into the way people organise institutions and define their social networks. She suggests that organisational silos are cultural phenomena which arise from the systems we use to organise our “world”. If we consider for example the traditional functional structure still used to organise many enterprises, to what extent do the shared values within a professional group (for example accountants) act as a barrier to effective interaction with another professional group (perhaps the Human Resources Department) where the shared values are likely to be very different? Tett acknowledges that organisations need both specialist departments and project teams to get things done. The challenge is how to avoid the downsides of silos (such as parochial views, silo performance becoming more important than enterprise performance, and loss of agility) as enterprises expand. Growing enterprises should, on the basis of Robin Dunbar’s evolutionary psychologist / anthropologist research be sensitive to potential ramifications as they expand beyond 150 – the social group size he identified as optimal.
“A company such as Facebook needs silos, in the sense of needing specialist departments and teams, simply to get its work done”
One of the examples that Gillian Tett explores in detail is Facebook. Not least perhaps because of the deep understanding they have from their data on peoples’ behaviour, their Leadership was particularly concerned about the impact of increasing size on their corporate DNA. Three of their initiatives resonate particularly strongly with me because I see parallels with my own experience – particularly as a Royal Air Force Officer. Facebook invests considerable resources in a six week “Boot camp” that all new employees attend. Whilst the primary objective was to get new joiners up to speed on the Facebook Code base the Boot camp also promoted good habits and created bonds amongst the classmates that persist after the individuals are spread across project teams. In the Royal Air Force (RAF) case, during officer training we were organised in “flights” that comprised a mix of specialities and genders (when I joined the RAF in the late 1970s, the mixed gender flights were being introduced and I recall the added dimension that such diversity to leadership activities and the strong competition between the mixed flights and the male only flights). A second parallel is the movement of people. Facebook moves their people between projects as a key anti silo measure. The RAF’s process of moving people every 2 to 3 years had a similar effect (as well as experience building advantages etc.). Time in the Officers’ Mess (eating, attending social events and perhaps particularly the Friday evening “Happy Hour”) provided numerous opportunities to bump into people from across different sections of the organisation and develop and maintain relationships with people outside one’s own team (Silo). Facebook use mechanisms such as Hackamonth deployments and six weekly hackathons to enhance further such horizontal communication. As Jocelyn Goldfein of Facebook stated to Gillian Tett:
“The power of knowing at least one person in each silo is crucial for making the company work”
This week’s Schumpeter column in the Economist refers to Deloitte “Global Human Capital Trends” that highlights that cross functional teams are continuing to be used more widely and that they are getting more power to run their own affairs. Deloitte argues that a network of teams is replacing the conventional hierarchy. This reminds me of the observation by John Kotter in his 2014 book “Accelerate”, that increasingly networks of “willing volunteers” are working on business critical projects in some organisations alongside their obligations in a traditional organisational hierarchy.
Digital technologies such as Slack make it easier for people to co-ordinate their activities without resorting to hierarchy. The Economist provides an insight into another one of the drivers of this evolution in a quotes John Chambers the CEO of CISCO:
“we compete against market transitions, not competitors. Product transitions used to take five to seven years; now they take one or two.”
Thoughtful leaders will however also be alert to at least potential limitations of teams – particularly ones that are not well led. Problems of coordination, group think and motivation for high flyers who become frustrated with poorer performing members of a team can undermine the benefits of collaboration. Team size is perhaps a key factor to keep in mind. The Economist quotes Jeff Bezos, the CEO of Amazon:
“If I see more than two pizzas for lunch the team is too big”
This view is consistent with established researchers in the area of team effectiveness such as Meredith Belbin (Henley Business School) and the late Richard Hackman (formerly of Yale and Harvard) who both expressed a preferred team size of around six.
A prudent step is to ask periodically whether teams are the best tools for a particular job. Even in the age of open plan offices and social networks some work is best left to the individual. Optimising the mix of agreed team commitments (deliverables etc.) and some more stretching objectives for those with the most ambition and capability. Perhaps giving the latter opportunities to contribute to developing future enterprise capabilities in addition to the current requirements being delivered by their team. One way to do this in a way that minimises the coordination “overhead” (or the Collaboration overload discussed by Cross, Rebele & Grant in the Harvard Business Review ) is to employ appropriate technology – for example Pinsight, one tool for meeting a point made by the FT in the 23 March 2016 article Management makeovers bring in peer reviews for pay – Employers are replacing appraisals and ratings with ‘check ins’ and continuous feedback
“Reformers believe younger workers are happier measuring and updating performance and targets regularly using mobile apps than they are waiting 12 months.”
The rapidly increasing volume of data inherent in our digital world is another driver for silo busting. Gillian Tett gives examples from both the private sector (Sony) and the public sector (New York and Chicago City Halls) to illustrate both the benefits of sharing data across silos and some of the dangers of not doing so. These include more effective deployment of Police resources to reduce murder rates and the uncoordinated parallel development initiatives to replace the Sony Walkman. As I point out in my book Strattomics – Raising Agility, the growing volume of business data is creating a huge opportunity to understand both our markets and our own enterprises better. To capture these opportunities sharing of data across enterprises is essential, rather than guarding it within silos, is now a business imperative for mature enterprises. Doing this can be a great first step towards sharing information between your enterprise and others – perhaps as part of a platform providing infrastructure and rules bringing together producers and consumers in new marketplaces.
What can you do to minimise silos in your organisation, use team work most appropriately and optimise the value of your data? Tom Peters proposes one solution to improving horizontal communication in the following video:
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I will welcome an opportunity to discuss these themes with you and consider the implications for your enterprise.