Silo Mentality

When I’ve taught courses in Organization Design and Behavior I often say that it is best to organize around a purpose and that all organizations are perfectly organized to get the results that they get.

One common way that businesses organize is by function. In other words, in functionally organized businesses you will find departments for each of the basic business functions of marketing, finance, operations, human resources, sales, and so on. However, most of these businesses realize that no one function alone adds value to the customer. So one approach is to form cross-functional business teams (i.e., teams with members from each relevant functional area) to manage a customer group, a brand, or a product line. A lot of my team development work focuses on helping these cross-functional teams at all levels of an organization.

The reality is that our business schools do not help people work cross-functionally by the very way that the schools themselves are organized. Most business schools have departments of marketing, finance, accounting, operations, human resources, management, etc., that mirror the silo structure of the functionally organized business. Unlike businesses that try to work cross-functionally, faculties tend to stay in their department silos and so students progress through these business programs without any practical experience in learning how to work across functional boundaries. Remember what I said about organizations being perfectly organized to get the results that they get. Well, business schools are simply organized to turn out functional experts who have little or no practical training in understanding how to get work done through and with others across organizational boundaries.

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