Good case studies which have experienced the silo effect, usually for ill, and some which have addressed the problem. Thought provoloking. ( )

Interesting examination of our natural tendency to back ourselves into solid of thinking and organizational expertise. Sharing data as well as sharing analysis and perspective are essential to combat blind spots and poor risk assessment. Lots of case studies, a little repetitive, but interesting.

I enjoyed Tett's earlier book on the financial crisis titled Fool's Gold so I was anxious to read her latest work. Unlike Fools Gold, this book may not be appropriate for the general reader. This is an excellent book for entrepreneurs, business leaders, CEO's, leaders of government agencies and managers of large divisions. Many large companies or government agencies are divided into separate departments or functions (silos). Sometimes these departments may not communicate with each other so that it benefits the whole. Tett points out incidents where companies have suffered losses, market share etc due to this lack of communication or where these divisions act in their own self interest at the expense of the company. Sony was a great excellent of this as cited in the book.

This is not a topic that I see covered in the business press but it is a very important issue for large companies and agencies.

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Society’s straightjackets

For anyone who has ever encountered a phone tree where s/he got passed from person to person because they didn’t quite fit the silo, this book will be validating. Silos are nothing new. Everyone understands they work in a silo. They are specialized. They have territory. They have to guard data. They have to compete against their fellow workers in other areas. They have to show profits of their own, regardless of what any other area of the company might be doing.

How did we come to this? According to tett, the basic theory is that humans tend to organize, categorize and standardize – everything - their lives, their homes, their work, their social connections. Over time, these contortions become the norm, get entrenched and become rules, at least of thumb. Different clans, tribes, societies and countries have their way of doing things, which look bizarre to outsiders, who have their own rules to (unconsciously) follow. Early on, it became evident to anthropologists that they didn’t have to spend years in Papua New Guinea or Angola to see this in action. The UK and the USA provide just as wild examples of restrictions and conventions.

Silos result in distortion. Different desks value securities at different pricings. Different divisions come up with competing products or standards. Risk evaluations are all over the range. Data goes unshared. “Interference” is not tolerated. The result is less forward movement, more stagnation, or even crumbling.

Possibly Tett’s most rewarding story comes from The Cleveland Clinics, whose leader had the temerity, the power, and the persistence to break down the old structure and impose an entirely new one. He decided that the hospital should function the way patients thought – around their conditions. So sending a patient to see four different specialists who all dealt with this condition from different angles (treatment, surgery, psychiatry, etc.) – the normal structure in hospitals – came to be seen as bizarre in his vision. Instead, he made the Cleveland Clinics implement a number of “institutes” where treatment and opinions could happen in one setting. This not only raised patient satisfaction dramatically, but lowered costs substantially, as it was no longer a game of how many doctors were scheduling how many tests and procedures in their particular silos.

Contrast that with the SONY story, where the CEO was continually Yessired and ignored. Nothing changed. The silos remained intact. The CEO left. And SONY sank deeper into trouble. The problem was the same as in Cleveland, but the entrenched silo structure won.

It seems we recognize the disadvantages of silos. They are aggravating, expensive and self-defeating. We can only hope those with the power and stamina to implement change read The Silo Effect.

David Wineberg ( )

Technical Library - shelved at: C3