The Silo Effect

The Silo Effect:  The Peril of Expertise and the Promise of Breaking Down Barriers, by Gillian Tett, Simon & Schuster 2016

Silos - companies have spent millions on consultants and IT schemes intended to circumvent, fracture, break down and otherwise defeat the problem of silos.  But despite all these efforts, silos, with their mysterious cement and iron bars, seem to find their way into the best organizations, and they stay put.  

After the 2008 financial meltdown author Tett observed what she calls the silo syndrome.  "Everywhere I looked in the financial crisis it seemed that tunnel vision and tribalism had contributed to the disaster.  People were trained inside their little specialist departments, social groups, teams, or pocket of knowledge.  Or... inside their silos."

But isn't it the job of management to oversee silos, directing movement of data (and money) out of one and into another?  Good question.   Where do silos comes from?  And is there anything we can do to "master our silos," and prevent them from taking over with massive stop-action moves?  Tett shows us eight case studies:

*  Mayor Mike Bloomberg's City Hall in New York (pre-DeBlasio)

*  Facebook in Menlo Park

*  The Chicago Police Department

*  Cleveland Clinic Hospital in Ohio

*  BlueMountain Capital

*  The Bank of England in London

*  UBS Bank in Switzerland

*  Sony in Tokyo

Chapter 8, "Bucket-Busting", covers the thrilling financial moves of a newcomer to Wall St., BlueMountain Capital, a partnering of two JP Morgan financial whizzes.  BlueMountain started small, took some big calculated risks, dodged bullets and still managed to earn its keep.  Tett cites their very different and flexible approach to financial management - although traders were indeed experts in particular financial vehicles such as mortgage funds.  In this start-up, traders wrapped a global approach to trading around the narrow markets in which they traded. Their competition was the big houses - JP Morgan, Chase, UBS - and their approach paid off.  Bett credits their David and Goliath successes to a keen understanding of how the partners did not want to run their operation, i.e. not silo'd, combined with the kind of intensity and flexibility that can only come from an energized start-up.

"We cannot live without silos in the modern world," she writes.  But we can avoid succumbing to the problems they pose.    Finally, she offers fvie specific lessors for mitigating the problems that can result from entrenched silos, including ideas on how to organize office spaces, to how to lead teams made up of people with disparate expertise.