The Net Promoter System Podcast
Silos are something of a dirty word in the business world. The term instantly implies bureaucracy, a lack of cooperation and transparency, and the types of insular behavior that frustrate executives and stifle corporate innovation and agility.
Yet, silos are deeply rooted in human nature, and I’ve come to believe we should stop complaining about them. Instead, we should ask ourselves: How can we harness the tribal behavior that generates silos to create value for customers?
To learn a little more about them, I turned to Gillian Tett, an anthropologist by training who served as the US editor at large for the Financial Times and previously its managing editor. While covering the 2008 global financial crisis, she became curious about its causes. Her book, The Silo Effect: The Peril of Expertise and the Promise of Breaking Down Barriers, explores the role silos played in the crisis, and the role they play in our everyday lives.
“Silos exist for the very simple reason that we’re human,” says Gillian. “And we can no more abolish silos than we could abolish, say, anger. It’s part of our human nature.”
Silos come up frequently in my work and on the podcast. For example, in an episode last year, General Stanley McChrystal described how even elite US military units like Delta Force, Rangers and Seals, fighting on the same side in a war, still viewed one another with circumspection, even suspicion.
“The issue is human beings are hardwired to classify the world, or to put their world around them into conceptual buckets or categories. That is absolutely endemic to how the human brain operates. We classify, therefore we are,” Gillian says. “The reason is very simple: We live in a world where we’re constantly drowning in knowledge, and information, and stimuli, and people, and tasks that we need to sort out so we can get stuff done.”
That’s a pretty good description of how someone in a functional role at a company—finance, for example—can be responsible for tracking revenue, yet completely lose sight of the source of that revenue: the customer. Even externally facing product teams can become so attached to their products that they fail to detect changing customer needs. But what if a customer—or a customer’s need—were part of the silo they operated in?
That’s one of the questions I raise in my recent Harvard Business Review article, “Are You Undervaluing Your Customers?” A growing number of companies are creating teams of experts organized around specific customer needs or experiences. (For one example, check out this recent podcast with Vanguard’s Amy Cribbs.) When this happens, the expertise that often worked at cross-purposes when locked in functional and product silos suddenly can act as powerful accelerants to innovation. A new tribe forms, with all the capabilities of those traditional functions, but with very different identity, mission and purpose. It’s a topic we’ll continue to explore throughout the year.
In today’s episode, Gillian explains the formation of silos and how they function. Of course, we explore the many pitfalls of company silos—some with catastrophic effects, like the global financial crisis. We also, however, dig into how silos can serve beneficial purposes. We talk through some of the tactics Gillian believes can be used to create better businesses, and better relationships.
In the following excerpt, Gillian outlines a few tactics for dealing with silos on an individual level, and explains how these practices can impact the larger company as a whole.
Rob Markey: I think that we actually end up in similar places in terms of the good and the bad of silos.
Gillian Tett: I think the essential issue, at all costs, is to move away from tunnel vision to some kinds of lateral vision.
Rob Markey: Yes.
Gillian Tett: Individuals can do it in in their own lives by simply taking measures to try and break out their own mental silos. Whether it’s just trying to make themselves open to colliding with the unexpected, creating small places to roam inside their lives, trying to take the less-traveled path in terms of technology, expertise or professionalism. Just realizing that there’s a value in trying to think yourself into the mind of the others—to look back at yourself. All of those techniques can help the individual overcome silos and tunnel visions in their own lives.
But leaders of organizations need to think about this very deeply. Because, to my mind, one of the biggest marks of true leadership in today’s world for company or organization is to have the courage to embrace a tiny bit of slack in the system. One reason why silos exist is because companies are hardwired to become so focused on efficiency and so focused on customer hits and returns on products that they forget to create that tiny bit of slack, which allows people to jump out of their silos, collide with the unexpected, rethink their organizational structures, and to be innovative.
Rob Markey: What I hear, if I were going to reframe it just a little bit is: No. 1, there’s a responsibility on the individual to take the other perspective and develop empathy for people in the other group. One thing I hear people talk about is, “Always try.” Always try to assume that the other person has positive intent. Because we tend to regard things coming from another group as having negative intent. So, always try to do that. No. 2, I hear you saying: As a leader, explore alternative forms of organization that a) mix things up and shake up the traditional tribes, and b) encourage cross-fertilization and, you said, “collision of ideas” and concept.
Gillian Tett: Yes.
Rob Markey: The other piece I would add is acknowledging that silos are inevitable, and that identity is the root cause of a lot of the pernicious effects of silos. Try to line up the silos with good outcomes—customer needs—and the act of reorganizing and reexamining should always be in an attempt to align identity with the customer, at least, rather than put people in a position of contending for resources just to contend for resources internally.
Gillian Tett: I think you’ve said it very well. Absolutely. I think trying, as ever, to think yourself into the mind of the customer, see yourself through other people’s eyes and then look back at yourself is very powerful.
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