January 18, 2024


Functional silos are a bitterly-recognised problem in large organisations. They arise out of the idea that specialisation is efficient, that the accountant should just account, the salesperson should just sell, the service deliverer should just deliver. As a business scales, it seems obvious that to create more capacity, you simply add more specialists to each function.

The problem is that these separate functions lose their connection with what the business is there to do and who it does that for. In the worst cases, they become mini fiefdoms, each with their own internal rules, reluctant to share information with other silos, poor at ‘passing the baton’ to the next silo when needed, optimising their own internal operation at the expense of the whole.

Common solutions involve finding ways to pierce the boundaries between silos – cross-functional teams, rotating people around functions, modelling processes with swim lanes to represent the function responsible.

But no matter how you dress them up, they’re still silos.

I think the problem is more fundamental.

Silos are a manifestation of a profoundly internal view of a business. They are about the hierarchy. They encourage people to focus on ‘the Boss’ instead of the client. They encourage people to compete inside the business, instead of in the market.

So I believe the solution needs to be more radical too. Instead of trying to build bridges between silos, or tunnel through them, or create elaborate schemes for inter-silo communication, we should do these things:

1) re-configure the business as what it really is – a system for making and keeping promises to the people it serves:

2) Design and document a set of end-to-end processes that reflect this, enabling everyone in the business to run any or all of them. So that everyone’s a Boss, and nobody is ‘overhead’.

3) When you need to scale, simply add more people. Or replicate the entire system across geography, industry, product – whatever dimensions work for you. It’s still possible to automate and outsource, if you want to, as long as it’s your process that’s being run.

This way, you can grow a sizeable business, that’s lean, efficient and effective, without ever going corporate.

Obviously this is easiest to do if you start early, before you’ve laid the foundations for silos, when as an owner with a small team, you’re first grappling with increasing scale, but it’s never too late.

Ask me how.