The Silo Effect: The Peril of Expertise and the Promise of Breaking Down Barriers

Don't panic, though. She's not suggesting leaders abandon the concept of putting everything in its place. Silos help develop expertise and skills. But leaders need to figure out when they're being mastered by their silos. In other words, leaders need to manage their silos before their silos manage them!

That's all very well, but how do leaders find the right balance, so their teams of experts are able to peer outside their silos and interpret the whole landscape? "The Silo Effect" presents a series of fascinating stories and anecdotes to help readers achieve this balance.

This book will benefit leaders who want to have an impact, and sense their organization isn't making the most of its opportunities. It will also interest people who want to harness the talents of team members to create innovation and success. And, because the author doesn't provide any ‘how to' tips or tools, she's speaking to managers who'll grab her ideas and run with them. Whether you're a leader in the public or private sector, or you just want to evaluate your own personal silos, "The Silo Effect" is for you.

Gillian Tett is able to draw on a breadth of experience. As U.S. managing editor of the Financial Times, she's in the privileged position of having access to a wide range of organizations – from Sony to the Bank of England.

She was driven to investigate this topic after looking into the causes of the 2008 financial crash. She wondered how normally clever economists and financiers could have failed to predict this economic disaster. After all, they're the experts. Was there a factor that had been overlooked during the analysis of the crash?

It's in the area of ‘other factors' that Tett has the edge. With a doctorate and experience in the field of anthropology, she considered the culture in which these experts operated, as well as what action they took.

Anthropologists like Tett study the science of classification. How we categorize our world, at home and at work, has a profound effect on how we live, and it reflects the mental maps in our heads. By studying where the financiers "put things," Tett found her answers. Her investigations were the launch pad for this book.

So keep listening to find out why analyzing the culture of an organization can increase creativity. Learn how the expertise of one person can dramatically improve the success of an organization, and how putting disparate information together can lead to great innovations.

The book is divided into two parts. Part one identifies and explains the dangers of silos. Part two, titled "Silo Busters," covers how individuals and organizations can overcome silos in their minds, lives and institutions. It's an accessible and, at times, emotive read.

The chapters have intriguing titles, like "Gun-Toting Geeks" and "When Gnomes Go Blind." At first these might seem gimmicky, but they work as nugget-sized summaries of the chapter while making you smile. They're a perfect example of Tett's ability to explain difficult concepts by tapping the popular imagination. So don't be fooled into thinking this is a light read. The comprehensive index and bibliography is testament to the breadth of research in the book.

Silos are created through the act of classifying, and Tett points out that this is universal. It's part of being human. We classify things in our minds, our families, our architecture, our institutions, even in our homes.

Just think about how different cultures arrange their living spaces. Some cultures have rooms for specific functions, some have separate rooms for women and men, some have one communal space. These choices reflect beliefs, values and ideas about how life should be lived, and these are reinforced by the arrangement of our living space. In fact, we usually don't question this kind of classification because it's part of our everyday lives and culture.

Because silos are a cultural phenomenon based on how groups classify their world, they're sometimes defined and apparent, and sometimes undefined and invisible. It's the invisible rules and norms, the ones so ingrained that we're not even aware of them, which can cause most problems.

Take our highly intelligent economists and financiers in the run-up to the 2008 financial crash. They followed the usual norms and rules of their world as they monitored the financial markets, made up of banks and insurance companies. But… and it's a big but… there were several financial institutions that the experts weren't able to classify. These were dumped into a murky bucket called "Other Financial Corporations" and left to fester, without scrutiny. Nobody thought to step out of the defined roles and procedures, plunge their hand into the bucket, and see what they found. In 2008 the bucket overflowed with debt, causing financial chaos.

In order to recognize these "mental silos," or entrenched cultural norms, you need to look at the system from the outside, and that's where anthropology comes in. Anthropologists believe the way we chunk and file information determines how we use it, and sometimes information can fall through the gaps. In other cases, it's the people, not the system, that are at fault. People are sometimes so entrenched in their silo mentality that they don't look past their own particular view.

Chapter Two tells the tale of Sony, a company so bound by its silos it missed an opportunity to capture major market share.

In 1979, Sony was relatively small, but it was at the top of its game with the release of the Sony Walkman. At that time the company had fairly autocratic leadership, and specialists worked together to design this ground-breaking gadget.

On the back of the Walkman's success, Sony grew. And under new leadership, the much larger Sony was divided into autonomous departments with their own budgets and status to maintain. This led to competition, rigid boundaries, and the close guarding of information, skills and resources. Over the years, tribalism and tunnel vision became engrained, despite attempts by successive CEOs to break up the silos.

Sony's fortunes declined, but in the late 1990s it had an excellent opportunity to rally. All it needed was to produce a digital Walkman. The company had the resources, including a record label. If departments could only work together, the digital Walkman would be within their grasp. But each player was more concerned with protecting its own silo than collaborating to create a new product, and the tribal boundaries remained.

Enter autocrat Steve Jobs, who ran Apple as a cohesive company, with one profit-and-loss bottom line. No silos – just a melding of the creative and technical genius of his teams. This resulted in the launch of the hugely successful iPod, a kind of digital Walkman.

This story shows how a silo mentality can be invisible to those in its clutches. If leaders at Sony had recognized how the company's divisions were harming its prospects, they may have looked for another way forward. And there is another way – one that can be sparked by an individual.

When computer geek Brett Goldstein decided to join the Chicago Police Department he did so because he wanted to do something meaningful. He was shy, slight and not particularly physically fit. His expertise was in crunching computer data, not solving crime. What on earth could he do for the police? He didn't know himself, but he had a feeling he could help.

He went through the arduous process of joining and training, and was finally out on patrol. As an outsider looking in on this world of crime and policing, he was as shocked as everyone else in Chicago that the murder rate was so high. Wouldn't it be great if the Chicago Police Department could predict where murders were likely to happen and prevent future deaths?

Then the Chicago Police Department remembered that crunching data was Goldstein's specialty, and he was asked to collate information from all the police districts across the region, including live data from patrol cars.

He found the most significant factor in predicting murders was the movement of gangs and their territorial boundaries. Using this data, Goldstein was able to predict murders with incredible accuracy, giving forecasts to patrol cars and Mobile Strike Units. Chicago's murder rate fell to its lowest since the 1960s, and Goldstein's crime prediction program was adopted by police forces across the United States and Europe.

In Brett Goldstein's story, silos were broken on more than one level. Firstly, as an individual, Goldstein broke out of his cozy personal silo, crunching numbers in an office, and joined the Chicago Police Department – a world so at odds with his experience that it seemed crazy. But his position as an outsider gave him a different perspective to that of his colleagues. It enabled him to see the accepted culture, but not be bound by it.

In addition, he was breaking down the silos within the organization by getting police districts to share data – something that hadn't been tried before.

Goldstein's experience shows that moving out of your personal silo takes courage but can have amazing benefits, including positive knock-on effects within your organization.

As you heard earlier, the author is not against silos in principle. In fact, she supports the idea of separating the functions of an organization, because it encourages responsibility and accountability. But there's also a need for divisions to come together, and sometimes it takes a tragedy to make this happen.

When fire swept through an apartment block in a poor neighborhood in New York killing an entire family, there was a concerted effort to prevent it happening again. Preventative measures were already in place. Buildings Inspectors surveyed properties regularly in response to residents' complaints about perceived fire risks. There was an expert team of firefighters who tackled blazes and kept records. But fires continued to break out.

If only City Hall could predict where fires were likely to happen, lives would be saved.

There was plenty of data available, but it was held across different departments. The Fire Department collected data on fire risk. The Buildings Department held data on the condition and age of apartment blocks. The Finance Department and Department of Investigations had information on mortgage defaults. Others held data on crime, complaints about vermin, poverty and a host of additional categories. But nobody had ever tried to gather those data together and join the dots.

When City Hall employed a team of computer geeks to crunch the data, a pattern emerged. They found there was a greater risk of fire in apartment blocks built before 1938 when building codes tightened, in poorer neighborhoods where City Hall had received complaints about vermin, and where owners were in default with their mortgages. By crunching apparently disparate information, by breaking out of its silos, City Hall increased its ability to prevent fires. Previously, inspectors had uncovered problems in 13 percent of buildings flagged up as fire risks. Using the new approach, that ratio went up to 70 percent.

"The Silo Effect" sets out to give leaders an idea of how they can manage their silos to work for them rather than against them. In it, Tett shows us how to spot dysfunctional silos and gives examples of companies that have effectively managed theirs.

In the conclusion, aptly named "Joining the Dots," she offers some ideas on how you can prevent the silo effect. She suggests examining how pay and incentives might be discouraging collaboration. She also recommends flipping your mental map to view your organization from another perspective and, of course, bringing together people from different teams.

What she doesn't do is present a "one-size-fits-all" set of actions to follow because, according Tett, the most important quality anyone can bring to their organization is their unique experience, imagination and way of thinking.

This is a book to challenge and inspire leaders prepared to start thinking outside the box. Some may find they want more instructions on how to break down silos, but others will delight in using their curiosity and imagination to come up with their own solutions.

"The Silo Effect: The Peril of Expertise and the Promise of Breaking Down Barriers" is published by Simon and Schuster.

That's the end of this episode of Book Insights. Thanks for listening.