Business School Associate Professor Stephen Willson looks at how businesses can look to avoid damaging cases of "silo mentality".
Reporting lines segregate functions to get the benefits of specialisation, control and measurement. But this creates boundaries (sometimes even physical) that are intended to increase that department’s efficiency and reduce risk whether to individuals, departments or the business. When these boundaries solidify we encounter ‘silo mentality’.
Justin King, having just taken over at the helm of Sainsbury’s, saw instances of war between retail and logistics, two units he felt should have been closely collaborative. He addressed the issue by making both functions report to the same director. His view on reflection was that it didn’t solve the problem overnight, but it made a tremendous difference.
A number of contemporary approaches illustrate attempts to get the benefits from departments while avoiding the drawbacks from silos.
Matrix management means a middle manager would have for example one reporting line up through product division and another with potentially conflicting priorities up along territory lines. Reconciling these issues depends on middle managers who can apply judgement amid broad potential for conflict, confusion and frustration.
Virtual teams are small groups of individuals from different departments tasked to find solutions to on an urgent cross-functional issue in parallel with their day job. This requires a degree of organisational ‘fat’ to draw on.
Cross-functional career paths attempt to broaden the perspective of managers through familiarity with potentially conflicting concerns and find delicate compromises through previous personal engagement.
The prevalence of such approaches suggest that no formal organisational chart reveals how to get effective outcomes and that the role of middle managers in boundary crossing for deal-making, consensus building and favour trading is more crucial than is conventionally recognised.