![]() ![]() The first action priority is to work on changing employees’ mental models, starting at the top of the company. There is no magic wand solution, but there are concrete initiatives that can be taken to move in the right direction. The real question is: how can we move away from this type of organization? ![]() 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 emphasis is on appropriating internal resources, particularly skills and knowledge, and then jealously guarding them. They minimize staff mobility and avoid the pooling of resources between departments or business units. What defines managing by silos? In those organizations, managers devote a significant amount of energy hoarding knowledge. However, for the large majority of organizations, managing by silos remain the default form of management. Information technologies are often presented as a powerful catalyst for such mode of transversal collaboration within companies or even among different companies (this is particularly true for complex projects such as smart city schemes). More recently, and from a more systemic perspective, there is an abundant academic literature celebrating the virtues of organizations as networks of interdependent actors. ![]() But they also recommended establishing integration mechanisms between these different units to ensure their overall transversal cohesion. 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. This is true for all kind of organizations, being businesses, public bodies or non-profit organizations.Īt 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. BPR recommends the removal of a function-focused approach and its replacement with a process-focused approach, thereby destroying the functional silos and encouraging cross-functional integration.Organizational silos are without a doubt the most widespread managerial structure, even though all management textbooks warn against them. "Functional silo" is a technical term, and further explained here why process-oriented organizations particularly one to avoid it:Ī term used within business process re-engineering (BPR) to denote areas within an organization where managers occupy a privileged position in terms of resources and influence, and where they use this for their own, self-interested, functionally-oriented motives rather than for the wider benefit of the business. This becomes problematic when the direction of focus creates barriers that do not serve a reasonable business purpose and negatively impacts the unit's ability to serve their role in the broader mission of the organization. "Silo" in this context needs to be understood along with the word "functional silo":Ī functional silo exists when the business processes of a functional unit within the division of labor of an organization focus inwardly on their functional objectives. ![]()
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