The Silo Effect

"Why do humans working in modern institutions collectively act in ways that sometimes seem stupid? Why do normally clever people fail to see risk and opportunities that are subsequently blindingly obvious? Why, as Daniel Kahneman, the psychologist put it, are we sometimes so 'blind to our own blindness?'"

- The Silo Effect, page ix

Gillian Tett, the U.S. Managing Editor and a columnist at the Financial Times, began to explore these questions during the financial crisis of 2008. Her eventual conclusion was that the financial system was deeply fragmented— which contributed greatly to the meltdown. Post-crisis, Tett began to explore this “silo effect” outside of the finance industry as well—ultimately resulting in this book.

What makes The Silo Effect especially interesting is that Tett holds a PhD in anthropology—her doctoral thesis explored marriage in a Muslim village in Tajkistan. Here, she applies an anthropological lens to the exploration of silos in organizational life. “Silos,” she writes, “are cultural phenomena, which arise out of the systems we use to classify the world.” Cultural anthropology serves as a powerful lens through which to shed light on how those systems operate.

Tett is a marvelous writer and storyteller—and this is a book of stories. We read about the destructive effects of silos—and the possibilities and power in silo-busting. We also understand why we create silos. Some of the stories are based on situations we are likely to be familiar with—especially around the financial meltdown—while others are more unexpected, such as the story of the Cleveland Clinic. In all cases, her perspective is refreshing.

Within each of these stories are warnings and lessons about what not to do—and possibilities of ways to live our lives to reduce the power of silos. While not a “how-to” book, one can find in its pages insights that can help us to think and act differently.

The Golden Egg

Golden Egg: The biggest takeaway from the book

The Paradox of Our Era

"…while the world is increasingly interlinked as a system, our lives remain fragmented… Many large organizations are divided, and then subdivided into numerous different departments, which often fail to talk to each other—let alone collaborate. People often live in separate mental and social ‘ghettos,’ talking and coexisting only with people like us."
- The Silo Effect, page 13

Despite the broad phenomenon of globalization, and the actual interdependence of systems and institutions, our day to day lives are lived, very often, in tiny silos. The word silo comes from the Greek for “corn pit”—and is still used to describe the towers that store grain. The contemporary usage of the term began in the military—to describe the chambers that stored guided missiles. Eventually, it was adopted by the management world—and is used to describe structures such as departments or units of an organization as well as mindsets—often associated with tunnel vision and tribalism.

Specialization and expertise are required in a complex world—and we are comfortable in our tribes. However, when siloed ways of thinking are all we have, then we don’t see the possibilities that arise from interconnections. The results can be catastrophic—the senior leaders of UBS genuinely did not know that they were losing billions of dollars because the activities that contributed to the meltdown were happening outside of their view and in a very narrow silo. Sony ceded its place at the top of the electronics industry when it produced multiple (mediocre) digital music recorders, using different technologies. A company founded on the premise of innovation had grown large and fragmented, leaving the opening for the iPod that soon followed—the product of a company that worked hard to create collaboration and avoid silos.

Examples are plentiful—and combatting the destructive effects of silos requires a great deal of intention. When we are intentional and do transcend our silos, the possibilities for innovation and new ways of thinking emerge.

Gem #1

An actionable way to implement the BIG takeaway (Golden Egg) into your life

Step Out of Bounds

"…breaking down silos can spark innovation in unexpected ways. If people are willing to take risks by crossing boundaries in their own personal lives, this can deliver unexpected benefits."
- The Silo Effect, page 143

One of my favorite stories in Tett’s book is about Brett Goldstein, who left his role as operations manager at Open Table to join the Chicago police department. While a highly unlikely move (so much so that his fellow officers suspected him of being a Fed plant) he contemplated the possibilities of using his experience in the Internet start-up world to improve the system by which policing happens.

After a grueling training and serving as a street cop, he found his way into designing a system by which potential murders were actually anticipated and prevented. It was only because he was able to connect the dots from what he knew about the streets and what he was able to do as a tech geek that this innovation was possible. While you’ll need to read the book to find out the challenges his innovation faced—the idea of seeing possibilities because of our own capacity to shift our boundaries and rethink how we see the world is inspiring and accessible to all of us.

Gem #2

An actionable way to implement the BIG takeaway (Golden Egg) into your life

Change the Way You Classify

"...the crucial point about Cleveland Clinic…was that it showed the value of thinking about classification systems. When people…were encouraged to reimagine the world—say, by looking at the world from the perspective of consumers, not producers—they could often become more innovative and effective."
- The Silo Effect, page 217

We are born classifiers. Through the act of classification we create meaning. In example after example, however, we see that our classification systems can limit our thinking and limit innovation. While every story in this book relates in some way to our propensity towards classification and the value in rethinking the categories we create, none is more powerful than the story of the Cleveland Clinic.

Here, an entire hospital was reorganized around the patient’s view of the world, disrupting the status of surgeons vs. non-surgical doctors, nurses vs. doctors, etc., in an effort to provide care around the true needs of the patient. For example, a Urological and Kidney institute brought together all caregivers who work on that specific body system together—changing the perspective on the patient and the possibilities for patient care. The result was a more humane and people-centered institution—built on an already progressive foundation.

Classification systems exist in institutions—and in our own minds. Where can we reframe and rethink the classifications that we take for granted?

By now I’m sure you’ve realized just how much I enjoyed reading Gillian Tett’s book. Great stories, great lessons, great writing. And, while I’ve read more overtly actionable books, this one keeps coming to mind as I work with organizations and see possibilities for thinking differently about what we can do by shifting our understanding of boundaries and classifications.

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Ronni Hendel-Giller

ABOUT Ronni Hendel-Giller

Ronni Hendel-Giller has been passionate about leadership since she was a teenager. She's worked in non-profit and for-profit leadership positions—always with an eye to guiding others to realize their leadership potential...
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