Why Silos Can Be Good For Enterprises - InformationWeek
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6/26/2015
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David Wagner
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Why Silos Can Be Good For Enterprises

Flat organizations can get too flat. Build your teams the right way for success.

15 Tech CEOs Make The Cut In Glassdoor Rankings
15 Tech CEOs Make The Cut In Glassdoor Rankings
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Enterprises, especially startups, have made increasing efforts to break down silos, flatten organizational structures, and create "one culture." This, according to University of Pennsylvania professor Damon Centola, might be taking it a bit far. If you can think about them the right way, some silos (or at least teams) are actually good. Silos, groups, or teams -- or whatever you want to call the social networks inside your company -- work better if they overlap, but aren't just one big disorganized soup.

Centola's paper,"The Social Origins of Networks and Diffusion," studied how social networks form and how complex information travels across networks. It builds on studies going back to the 1970s by Peter Blau and Joseph Schwartz. Blau and Schwartz proposed the very influential theory that if society was too structured it created barriers to ideas spreading. Essentially, social barriers like class or race could prevent ideas from easily diffusing. Centola's study adds that that reverse can also be true. If a social network is too loosely organized, complex ideas don't spread either. Essentially, we become a collection of individuals and we don't reinforce good ideas.

To get a "network effect," the network has to be defined enough by commonalities for the ideas to be accepted and put into practice. What this means for enterprises is that unless you are quite small, you are better off maintaining some of your group structure.

This is true if you want to spread a new idea, an innovative culture, or even a new best practice. In an interview with InformationWeek, Centola said, "In order for a group to change their behavior, they need cultural norms. If the norms are changing, what is going to inspire you to buy into that change? People need lots of social reinforcement to buy into these changes." That's why you need a group or a team to reinforce the behavior. But how does it move outside of the "silo" or team into the organization as a whole?

[Learn more about the importance of shared goals. Read Is Your IT Team Working In a Vacuum? ]

That's where team design is crucial. "The key," Centola says, "is to have several members of a group be a bridge to another group. When you design groups, design a few people that overlap." What you want is a few people from each team in communication with another team, and a few different people on the team to be connected to another team, and so on and so on. This way, you create networks of teams that are bridged together. These ties from one team to another allow an idea to move and diffuse across a network much faster than it would if it was one big team.

When you do this, you have to think about the size of your bridge. The study shows that one person is often not enough to build an effective bridge between groups. You need a few people to reinforce the social behavior. Obviously there is no hard and fast rule on the number of people, and it is greatly dependent on team and enterprise size. But when asked for a rule of thumb or a way to think about it, Centola said, "Rule of thumb is a good way to put it. There is a window of maybe a third of the group overlapping. That ends up being very effective. More than that would be a problem. That would be too many dual memberships. But a third gives enough influence."

Here is a Goldilocks kind of picture. The network on the left is too diffused. The network on the right is siloed. The network in the middle is just right.

(Image: Damon Centola)

(Image: Damon Centola)

As an example, imagine that a new environmental initiative starts inside a single team. The group reinforces the behavior inside its own group through a combination of social influence. To spread it from one team to the next, you need multiple people reinforcing that idea to another group. Once it "takes hold," the network effect can reinforce the idea inside that group and continue passing it on to other teams. Centola's study shows that the idea would move much faster across those influencing teams than it would if the same people were all just "one network."

The good news here is that managers can stop trying so hard to break down the walls between teams to create a single culture or a flat organization. What you really need is to build bridges between them. It is no longer important if everyone in IT is best buddies with everyone in sales. But it is important that a wide bridge of people are friendly and that a different group can say they are connected to marketing. This kind of structure is much easier to achieve than making wholesale changes to culture to instill outrageous amounts of communication. In the end, you will be much more successful in spreading complex ideas and best practices than what you were trying before.

David has been writing on business and technology for over 10 years and was most recently Managing Editor at Enterpriseefficiency.com. Before that he was an Assistant Editor at MIT Sloan Management Review, where he covered a wide range of business topics including IT, ... View Full Bio
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batye
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batye,
User Rank: Ninja
7/2/2015 | 12:27:51 AM
Re: Silos
@tzubair, I could not agree more... as it not always the same way... or same pattern of communication....
batye
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batye,
User Rank: Ninja
7/2/2015 | 12:26:33 AM
Re: Silos
@jries921, interesting point... but I would like to say... it all depends on some factors... like let say this days all co. trying to save... while cutting corners... one way or other...
jries921
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jries921,
User Rank: Ninja
6/30/2015 | 2:13:54 PM
Re: Silos
The laws of social inertia make it unlikely that any but the most conscientious techies will deliberately seek out and befriend their end users.  so if you seat them in their midst, you definitely up the odds.  And you get the added benefit that "normal people" get to see that they have a lot more in common with techies than they had been led to believe.

One thing i thought about yesterday is how the US armed services are organized and how such an organizational system might benefit corporate IT.  It turns out that the three service departments (Army, Navy, and Air Force) have no operational control over troops, planes, and ships in the field as they once did; rather, the units stationed in a particular part of the world report to the head of the command responsible for it (and all of them report directly to the Secretary of Defense).  Instead the general staffs of each service advise the President and Secretary of Defense on strategy and tactics (the JCS is effectively a military think tank), while the departments focus on recruiting, training, and equipping their people (and remain responsible for promotions).

So imagine, if you will, a corporate IT department responsible for recruiting and training people to support the company's operations, advising senior management on technical issues, procuring and/or developing hardware and software for the company's use, managing the central network and the corporate website, setting general computing policies, and supplying the other departments with the people and equipment they need to manage their own computer operations; *but*, the people so assigned would be paid out of the "client" department's budget and would function as employees of that department until/unless reassigned.  This would make all managers responsble for directing the computer operations for their own groups (with the appropriate professional advice from the IT staff assigned to them), thus giving them the ability to insure that those operations are adapted to local needs and making the computing staff they are assigned responsible directly to them, instead of to IT (helping to give the local manager's priorities the proper weight).  And at the same time, IT would be still in a position to coordinate and set general computing policy and avoid needless duplication of resources (and assigned personnel could mediate between their bosses and the central IT department).
tzubair
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tzubair,
User Rank: Ninja
6/30/2015 | 12:42:03 AM
Re: Silos
"Computer people are going to interact with each other anyway due to common interests; getting them to interact with end users is the challenge."

@jries: I think you're underestimating the geeks here a bit. Yes, they will talk to other fellow geeks but it isn't a big deal to make them interact with the outside world. There are several common interests they share with other users and that can serve as a good starting point for conversations.
jries921
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jries921,
User Rank: Ninja
6/29/2015 | 1:37:10 PM
Re: Why flat organizations do not work
It's not possible to regularly communicate with everyone in an organization with more than a handful of people, but a small company is much like a small town in that "everyone knows everyone else" (or at least knows where to find him) and people *can* communicate when they need to without having to go through the boss (who usually has enough to do without the added burden of mediation).
jries921
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jries921,
User Rank: Ninja
6/29/2015 | 1:32:58 PM
Re: Silos
Correct, though I suspect that an "IT guy/gal" who reports to the head of the group he/she serves will be more responsive to its needs than one who reports to a central IT department (or an outside contractor).  But to quote the famous engineering maxim: "There ain't no such thing as a free lunch".
jries921
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jries921,
User Rank: Ninja
6/29/2015 | 1:28:58 PM
Re: Silos
Agreed, but I would maintain that the best way for the organization to insure communication between IT people and those they serve is not to put them all in their own little ghetto where they have minimal interaction with anyone but their fellow "geeks" and the only real communication they have with the rest of the organization is through their bosses, but instead to put their desks among those of their users.  Computer people are going to interact with each other anyway due to common interests; getting them to interact with end users is the challenge.
David Wagner
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David Wagner,
User Rank: Strategist
6/29/2015 | 12:53:08 PM
Re: Silos
@jries921- I think what you are saying meshes nicely with the network fingings here. It isn't so much who who the boss but about making sure the communication likes are open and broad, but not so broad they lose meaning. I think when you are talking about who should be talking to who, you are really talling about the right way. nstead of who reports ot who, it should be who talks to who.
WalterSokyrko2
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WalterSokyrko2,
User Rank: Apprentice
6/29/2015 | 12:10:31 PM
Why flat organizations do not work
The reason that completely flat organizations do not work is that everyone spends so much time communicating that nothing gets done. A truly flat organization, such as a start-up, requires everyone to communicate with everyone. i.e. a full mesh network. A flat organization with N people requires N(N-1)/2 communication links. This number gets very large, very quickly. A hub and spoke organization is most efficient with (N-1) communication links but is limited to small organizations because one leader can effectively manage only a small number of people (5-7 optimum, 10-12 maximum).  A pure hierarchy, such as the military, minimizes communication links for a large organization. This article correctly points out that modern enterprises require communication links between siloes.
tzubair
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tzubair,
User Rank: Ninja
6/28/2015 | 3:51:58 PM
Re: What a nonconventional piece!
"And that degree varies from organization to organization."

@nasimson: I think the size of the organization has a major role to play in this. When it comes to small organizations, flat is good. As the size increases, complexity increases. In case of large organizations, too flat an organization can reduce control and affect the output. In that case breaking into silos is the best option.
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