Ironclad silos hold you back – Business Agility Roadblock #2

Organizational design is fundamental to establishing a business agility foundation. Without the right operating model in place, it’s like jumping on a bike that’s missing a wheel—you won’t get anywhere.

The problem with silos

Organisational silos are endemic to many larger enterprises. Traditionally, organisations had a tendency to introduce new departments into the business as they grew. Departments like marketing and HR – not critical to the core function of the business – would be added on to bring more of the supplementary functions of running a business in-house.

While this approach may help to boost the bottom line and achieve economies of scale, the problem is that silos build bureaucratic barriers between departments. These barriers make it very difficult for disparate teams to work together to achieve common outcomes – which is what transformational business agility is all about.

Mirror the start-ups

Siloed organisations are simply less nimble than those who don’t have rigid structures, processes and hierarchies in place. Enterprises need to think and act like start-ups – smaller, agile companies that work as a whole to change direction or achieve business goals.

Of course, it’s not simple to flick the switch on silos and pivot to thinking like a start-up. But that’s not to say that it’s impossible. Changing organisational design can be achieved, particularly if you start within one department or line of business. The goal here is to “de-scale” your organisation, while not losing the advantages that scale has brought you.

Tips

• Experiment on a small scale. Choose one team, line of business or project and demonstrate the advantages of bringing other teams on board to support the project.
• Demonstrate the success of one project and then roll out to other areas.
• Support long-lived teams, giving them accountability for expenditure and return on investment.

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