Silos started as a clear division of labor into areas of expertise, while giving those areas authority and power to run them. The Administrative Management Theory coined this idea.
Division of labor was a great idea in a world that saw organizations as machines and people as clogs in those machines. That was a great solution for the (simple) business world 100 years ago. After all, many organizations succeed based on this structure. It was a better solution than the common generalists before the management revolution 100 years ago.
Any solution for one problem creates new problems and division of labor is not an exception. As the business world develops, it becomes more and more complex. The complexity of the business world required people from different divisions to communicate, share data and work together. On top of the need to exchange data, the Internet revolution increases the need for people to share data.
We can’t escape human nature. We were part of tribes and loyal to the group we are part of. Nothing changed. Once you told a human, he is part of group A, Group A becomes “WE”, all the other groups are “THEY”. We share data with people we trust (the group) and not with untrusted groups (they).
Two main reasons create enterprise silos. Grouping people together to increase their knowledge and experience in one business domain and the human tendency to see groups as trusted and untrusted. The need to share information makes the silos a problem. The Internet just proves that in other settings than companies, data can easily share between different groups and people.
What needs to be done to eliminate functions is simple, but it is complicated and complex how to do it. In a nutshell, creating a hybrid team of people from different “silos” is a solution that breaks silos from a business structure point of view. On the other hand, it breaks people feel of belonging and create initial confusion and frustration. The last has a bigger impact and results when an individual is part of multiple groups.
To carry out a change that turns organization structures from groups based on skill sets and experience into hybrid groups is the hard part. Many projects are already running as interim hybrid groups. The matrix organization is one solution that tries to resolve problems associated with hybrid groups from management and structure points of view. I don’t think the matrix system is working and it should be a model for creating permanent hybrid groups.
The software development industry tried a different matrix organization based on squads, chapters, tribes, and guilds. You might want to try this model, although I believe it will end up with the same results any other matrix environment will produce.
The alternative is to create a few permanent hybrid groups (at least three) and try three different management approaches to see what works best for an organization. Based on that experiment results push the best solution into the organization.
There are three different management systems I would use for the experiment, you might have others. The first one is leaving one leader of the group. The leader will be responsible for all people in the group, regardless of their knowledge and experience. The struggle is that the leader is not familiar with other expertise needs and requirements. I have a terrible experience with this model.
The second one is to leave the leader, but with a minimum authority that focuses on assigning work, set priorities, resolve conflict and clear roadblocks. All the other managerial and HR duties should be done by an extended HR group, that follow the same hybrid approach.
The third model is following the Chinese Wu-Wei approach. Do nothing. Let the team self-organized until a certain order will be in place. Don’t worry, a leader will naturally evolve and will be acceptable by most of the group members. The main disadvantage: it takes a lot of time and chaos will be the ruler for a long time. It takes patient and internal control to live with the chaos until order takes place.
In all three scenarios, the company needs to provide education for people that want to improve their knowledge and experience. This effort should be associated with informal groups that increase professional knowledge and experience (the same as the guilds in software agile).
Removing silos has significant positive impacts on many common problems that organizations are dealing with. Don’t worry; it creates new challenges. The process of removing silos needs to be slow and following implementations based on successful experiments. This is a slow process that takes two to three years for a group of ~50 people.