How to smash a silo
While he was flying over New York City in a helicopter one winter’s day in 1987, Jack Welch had a lightbulb moment. The charismatic chairman and CEO of the General Electric Company (GE) was frustrated with his organisation’s silo mentality and its detrimental effect on decision-making. As he sped past the skyscrapers of Manhattan, he came up with a solution that would become known as the GE work-out programme.
This took the form of large meetings designed to optimise communication and accelerate change. The sessions had to involve cross-functional groups of between 45 and 100 people from different levels of the organisation to ensure a broad range of perspectives. Each session would be led by one member of the executive leadership team, who had the power to approve or veto any idea arising.
Whenever significant problems presented themselves at GE and rapid adjustments were needed, the company would convene work-out sessions. In each case, the teams that were closest to the problem at hand worked intensively alongside representatives of customers, suppliers and/or other relevant business partners to analyse critical issues and come up with their recommended solutions, which were then implemented at speed.
Many other big companies, including IBM and Philips, have since adopted a similar approach, yet some of the world’s largest brands still find effective cross-functional collaboration problematic. A silo culture, in which departments work independently and rarely share information, can stall the decision-making process, reduce productivity, hide serious problems and hold back innovation.
A recent Raconteur survey has found that 85% of senior business leaders value regular communications from their organisations’ various functions to keep them updated and aid their decision-making. Three-quarters rarely make significant choices without consulting other departments. Despite this, 83% of respondents say that they would benefit from a greater understanding of different functions when making big strategic calls for their businesses. So how can companies up their game in this respect?
Building greater cross-departmental understanding
Joanna Swash is group CEO of Moneypenny, a firm that looks after phone calls and live chats for businesses in the UK and US. She stresses that improvements have to start at the top.
“Leaders need to create an environment in which people feel confident enough to talk about where they’ve gone wrong and what their needs are,” Swash says. “Different departments can then help to meet those needs. The important thing is that everyone understands what the challenges are.”
Swash suggests a straightforward approach to adopt at the start of a big project to stimulate a virtuous circle of healthy communication and collaboration: “go slow to go fast”.
She explains: “Stay in the planning phase until you’ve got everyone who’s working on the project on board with its end goal. Get all the resources you need in place and establish processes to fix any issues that could occur during the project.”
Swash and her team will also conduct what they call a pre-mortem during the planning stage in which they imagine that the project has failed. They work backwards from that theoretical outcome to determine what could lead to the failure and who should be responsible for resolving the causes.
But could such a painstaking initial phase serve as an unnecessary drag on decision-making?
“The most successful projects I’ve worked on have stayed in the planning phase for a frustratingly long time,” she says. “Every business wants to move fast, but taking time at the beginning to engage the entire organisation will ultimately allow the project to advance at speed.”
Moneypenny has also created a central business change department. This is specifically responsible for key choices such as selecting which new customer relationship management system to buy.
“This has really helped us to make the right purchasing decisions,” Swash says. “Our business change department has no vested interest in choosing one system over another and its members are very knowledgeable about the entire business.”
Why businesses must show change
Les Gregory, a strategic adviser and former director at BAE Systems, believes that images are just as important as words in ensuring effective interdepartmental communication.
Looking back on his 40-plus years with the aerospace and armaments company, he explains: “If we were making big organisational changes, we’d get a graphic designer in to draw the big picture. This is a visual representation of all the things that are wrong with the business or a particular process. The image shows what employees, customers, suppliers and the local community think of you, but also how the proposed changes are going to transform the situation and improve the business. It’s a brilliant way to ensure that everyone is on the same page.”
Alison Edgar is another advocate of using visual representations. She helps some of the world’s biggest brands, including Sky and Amazon, to improve their interdepartmental communication. Juggling balls are her preferred metaphor, offering everyone in an organisation a common language that enables them to quickly convey what their priorities are. The idea is that this serves to expedite the decision-making process.
The method uses balls of different sizes to symbolise tasks of varying importance and urgency: basketballs (important and urgent) tennis balls (urgent, but less important) and ping-pong balls (important, but less urgent). There are also what Edgar calls “neithers”: relatively trivial, non-pressing tasks that don’t warrant a ball.
“You have to develop strong relationships to build communication,” she says. “But what happens when someone working in a different department is very different from you? Your gut feeling might be that you don’t like that person. But, if you have a common language in which you’re both fluent, you can still communicate well.”
Building diverse teams, with members who have complementary skills and personalities, is another way to optimise communication and decision-making. Personality profiling is a key tool in Moneypenny’s recruitment process. The company uses the predictive index test to evaluate candidates’ cognitive abilities, personality traits and behavioural tendencies.
“It helps to build a really diverse team,” Swash says. “You need diversity of thought and different ways of approaching a problem. If each member understands why they’re different and what they bring to the table, you’ll have a dynamic team.”
A quarter of a century on from Welch’s inspirational flight over New York, many businesses are still facing similar communication problems to the ones he tackled so decisively at GE.
They don’t necessarily need to adopt a work-out programme, but their leaders would be well advised to engage more often with all areas of the enterprise. In doing so, they will gain valuable intelligence to inform key decisions.
If a firm can set up an independent department that’s dedicated to business change, that should provide an insightful helicopter view of key projects. Moreover, adopting visual forms of communication can create a common language that should help different departments – preferably containing employees with a wide range of skills and experiences – to understand each other’s priorities. The result will be a more coordinated organisation with a collective voice, which will ultimately make better decisions.
This article is part of a series analysing the state of business decision-making. Based on exclusive research of more than 1,000 senior leaders by Raconteur, you can explore the rest of the series, here.