Bookworm: The Silo Effect

Silos may be comfortable, but they encourage groupthink and limit growth and innovation, writes Gillian Tett.

Who wrote this book?

Gillian Tett is a Financial Times journalist, perhaps best known for warning, in 2006, that a huge financial crisis could be on the horizon. Best to take her advice seriously…

And what exactly is a silo?

A silo is a way of working that essentially means people stick to what they know. As Tett points out, a silo isn’t just a feature of a business; it’s a feature of everyday life. We socialise in silos and we tend to limit ourselves to the people we know and whose references we understand. In the workplace, however, silos basically prevent communication between different departments, Tett argues.

We all have our own specialisms though, don’t we?

Absolutely. And we should. Tett’s point is that silos prevent these specialisms improving the business. One of her examples is Sony, which was a far more dominant company in the 1990s than it is in 2022.

Once Sony became particularly enormous, it decided to divide into different units. In Japan, where there is no word for ‘silo’, each unit of Sony’s business was effectively competing against the other, and they stopped communicating or collaborating efficiently.

So, silos are dangerous?

Yes, because they make communication more difficult. There is a reason that prisons keep prisoners in separate cells when the lights go out: they cannot talk and conspire with each other.

Who’s managing to avoid silos?

Tett has plenty of examples, one being is Meta (or Facebook as it was when the book was written). Meta doesn’t just encourage mixing between teams but makes the practice a formal part of its business strategy.

The company runs two initiatives that illustrate this openness: a 'hackamonth' and a hackathon. In the former, a member of the team who’s spent a year working in one department goes on to spend a month in a different department, often staying there on a long-term basis by choice. And, in a hackathon, hundreds of engineers congregate to solve software problems together.

Isn’t it a bit of an effort just to get people to talk to each other?

It does take time and effort to identify how silos are holding back a business, but’s quite easy to implement regular initiatives to prevent them occurring. And the financial risks inherent in silos are far greater than the manageable costs of breaking them open.

And presumably silos aren’t just institutional, they’re psychological?

They are, but if we proactively engage with people who are different to us in our social lives, we may be able to carry this behaviour through to our professional lives. Because silos are comfortable, they are appealing. But important discoveries can be made by expanding our networks and opening ourselves up to diverse viewpoints and opportunities.

So, everyone can learn something from everyone else?

Precisely. Tett cites the example of computer expert Brett Goldstein, who used his data skills to help Chicago police predict where gang killings were likeliest to occur. A rigid silo would have prevented this kind of cross-departmental interaction. And, in this instance, that would probably have cost lives.

What am I most likely to say after reading this book?  

“Get me out of here!”

What am I least likely to say after reading this book?

“We all need to stay in our comfort zones. It’s so cosy.”