Can we break Corporate Silos without breaking Specialization?
Mansoor wrote an interesting post a couple of days ago that spurred some intelligent discussion. I want to continue the conversation by adding another perspective to one point in the post.
It seemed like Mansoor said that specialists who are very good at one thing alone can create silos within organizations. That may not entirely be true.
I define Silos as two things:
1- Groups within organizations who are making decisions solely to benefit that group/dept even at the cost of the bigger picture. I.e. if something benefits me but conciously impacts, disturbs or damages another dept, so be it.
2- Silos are groups that – in the process of making solo-focused decisions – are unable to communicate their roadmap, plans and progress effectively outside of their group. Other groups neither have influence nor a way of preventing a path the silo is taking.
To me, Silos aren’t a problem of specialists or generalists but a communication / collaboration / knowledge management problem.
Read on for some thoughts and a suggested approach to breaking silos without the need for major restructuring.
I was a Supply-chain mgmt consultant up through a couple of years ago and Master Supply Planning is a common area where cross-funcitonal, silo-breaking discussion is needed between product management, marketing, sales, production, warehousing, inventory, sourcing and finance.
Yet at tactical levels each of these depts need to focus on optimizing their individual areas fully to keep the ball rolling… except for constraints identified at the MSP level.
E.g. a factory’s interest is in keeping their machines running all the time, people engaged 100% so that production cost per unit is minimal and the profits they record are good. However, a constraint will comes from Sales forecasting or marketing where if there isn’t sufficient demand at a given time, there’s no need to keep machines running at 100% and build up stock. The silo would exist if the factory ignores demand and hands off their finished goods to warehousing. The silo-breaking behavior is frequent high-level cross-functional discussions that impose constraints, added with some IT tool that aligns everyones interests down to individual performance numbers and targets.
Shifting focus a bit – I see a similar problem for product managers within Tech product companies… who have to perform cross-functional work by interacting with development, marketing, sales, finance and customer service to figure out exactly how to plan their next product or release. While their individual role is to absorb cross-functional issues, perform CBA and create an optimal release, the actual successful implementation of that release (with the feature-set and other constraints set by the PM) needs specialists focus in each area.
I believe silos are a communication / collaboration issue rather than one resulting from skillsets. Companies can break them down by using IT Tools that support decentralized collaborative planning, if used in the following way:
- In the first phase, ask all specialist teams to meet in a place where they can literally dump their full interests, plans, wishlists and more in a single place
- Enable one person to use that tool with a decentralized focus (a Supply Chain Manager, Product Manager, Org Strategist, CEO, BOD, or someone else) who can organize the many wishlists into common prioritized goals. This freezing would be the result of a heavily collaborative effort where assumptions and needs could change on a day-to-day basis.
- Once frozen, push the final constraint set (whether its production and inventory numbers, feature sets, sales targets, or other milestones and deadlines) back to the specialists teams as goals
- Enable the individual specialists to beat those goals and optimize P&L for their depts within those constraints.
Update: A comment on Mansoor’s original post points to a similar theory.
10:41 pm
thanks osama, for a very enlightning followup to my post.
i guess we’re talking about the same issue, but from different perspectives. one thing i may have forgot in my post, was that its one perspective to view organizational development from. i guess since i work mostly in this area, i see things from that light.
yet another perspective (which might be a followup on your post) is the centralization vs decentralization evolution, something which is largely seen in our local banking sector.
your given approach is a very positive direction, if conducted successfuly however, towards ensuring stakeholder commitment to plans and goals. however, one thing which i would like to include is a feedback loop on the whole thing. done as a one off exercise, there is a big danger of alienation once a little time has gone by and the original ideas and concepts forgotten. (remember, the corporate world has a real short memory) and when these goals are then viewed as something shoved down the throats of employees by management rather than something which was collaborative in the first place.
my two cents.
cheers
12:00 am
Well said! My approach would be to put these initiatives in a shared public (public to management / functional heads) intranet area…. or have frequent meetings with updates.
Please do send that followup post