Threats emerge and opportunities are missed when the left hand doesn’t know what the right hand is doing. Here’s how project managers can bridge silos, support better risk management and assist innovation.
Why did one of the world’s most risk-averse banks suffer deep losses during the US subprime mortgage crisis? Why didn’t Sony, the company that invented the Walkman in the 1980s, replicate its success in the 2000s with digital music players? How did a geek, who retrained as a police officer, predict gang-related murders in Chicago?
The answer to all these questions is hidden in silos*. Every medium to large organisation contains silos. They may be areas of specialisation, discrete departments or simply cliques within the workplace or system.
We need silos because the human brain likes to organise things, it likes to classify people, responsibilities, and processes. At the same time, silo thinking can blinker us to what else is going on in the organisation and in other areas that may not at first seem connected to the responsibility of each department.
Take the Swiss bank UBS, an ultra-conservative, risk-averse organisation with a stellar, safe reputation prior to the Global Financial Crisis. It was inadvertently exposed to the US subprime mortgage crisis because one of its departments calculated risk differently to the way the auditors saw risk. The result was it was far more exposed than it realised and this didn’t emerge until the actual point of losing billions of dollars.
Silos can cause cultural issues as well. When Sony decided to break its company into divisions, little did it realise that the culture within each silo would become so entrenched that the divisions would compete rather than collaborate with one another. The result? Apple released the iPod and Sony, for all its smarts in electronics and a music company on its books to boot, lost the digital music device market.
Fortunately, as project managers, you’re often interdepartmental, cross-cultural and unaligned. You’re both an insider, privy to the inner workings of an organisation so long as you can justify its value to the project, but you’re also an outsider, able to see cultural differences and the gaps between silos.
Your mission, should you choose to accept it, is to bridge these silos so that organisations have greater visibility over what threatens to tear them apart. Bridging silos is also key to finding opportunities to innovate, or at least make things more efficient by introducing a common language between siloed cultures. Do you accept?
*Also in The Silo Effect by Gillian Tett (Little, Brown, 2015)