The Pathologies of Silo-fighting

The division of labour has been the main principle for structuring organisations in the last two centuries. That is still the dominant approach for allocating resources, information and power in companies and public institutions. The new dynamics in a connected world have revealed a rich spectrum of problems related with these structures ranging from ineffective coordination to turf wars. Hence came the reaction, bringing the conventional stigmatising label ‘silos’ and the birth of a whole industry of silo-fighters armed with silo-bridging or silo-breaking services, methods and technologies.

There are various organisational pathologies brought by these silo-fighters. Here I will point out only the two of them which I see most often. The choice to classify the silo-fighters into silo-bridging and silo-breaking – an obvious oversimplification – is made to support the illustration of the these two pathologies.

‘Bridging the silos’ is not a strategy based much on appreciating their role and thus opting for bridging over breaking.  It’s mainly due to silo-fighters’ insufficient resources and power. If they manage to successfully sell the story of the bad silos, coming with a rich repertoire of metaphors such as walls, chasms, stove-pipes, islands and such like, then they get permission to build – as such a narrative would logically suggest – bridges between the silos.

Now, the problem with bridges is that they are either brittle and quickly break, or they are strong enough to defend their reason to be. They break easily when they fail to channel resources for longer time than the patience over their initial failures would allow. However, the identity formation switches on viability mode, and they grow out of network of decisions supporting their mission, now turned into an on-going function. If the reason the bridges exist are silos, and the bridges want to keep on bridging, then the silos have to be kept healthy and strong as they are what the bridges hang on to.

The bridges reinforce and perpetuate themselves up to a point, in which they are recognised as silos, and the problem is solved very often by building new bridges between them. This is how a cancerous fractal of bridges starts to grow. As attractive as this hyperbole is, I have witnessed repeatedly only two levels of recursion, but isn’t that bad enough?

In contrast, the silo-breaking strategies want nothing less than the destruction of silos. There, the silos are seen only in their role of a problem. Nobody asks what kind of problems this problem was а solution to. Instead, this type of silo-fighters start waging exhausting wars. The wars can end in several ways. A common one is resource depletion. Another is with the silos withstanding, or with the silo-fighter being chased away or transformed. And then of course it could be the case of victory for the silo-fighters. And this is when the disaster strikes. Having the silos down, the silos fighters are faced with all the problems being continuously solved by the silos during their life-span. Usually, they have no preparation to deal with those problems, neither they have the time to come up with and build alternative structures.

When discussing these two pathologies, it is very attractive to search for their root cause and then, when found, fix it. But that would be exactly the fuel these two types of silo-fighters run on. It takes a deeper understanding of the circularity of and in organisations, to avoid this trap. By ‘understanding’, I mean the continuous process, not the stage, after which the new state of ‘understood’ is achieved. And it takes, among other things, the ability to be much more in, and conscious of it, and at the same time much more out, but only as a better point for observation, not as an attempt for excluding the observer.

 

Integration of strategic, project and process KPIs

Some organisations, after straggling to implement Balanced Scorecard Systems (BSC), come to the conclusion that they need to at least map their processes. But then the challenge they face is how to link strategic with process KPIs. Others are practising some sort of BPM but have difficulties demonstrating its contribution to the bottom line. As Anatoly Belychook recently wrote:

business consultants know what should be done eventually but have vague understanding of how strategic goals can be achieved with the help of BPM

There are many ways to do that. One of them, usable in the ‘ordered’ domains, is to include process KPIs in the formula of certain KPI (or ‘KGI’, to conform CobiT’s terminology) of a strategic goal. It’s simple but not so straightforward so let’s first have the bigger picture.

There are basically three types of things in the motivational domain: goals, means and influencers. (If you need to dig deeper, Nick Malik’s EBMM is a good place for that. Interestingly, one of the things that had driven that extension to the BMM was the work of Alexander Osterwalder, one of the authors of the now popular Business Model Generation book) The means to achieve most ends, especially of those belonging to the classic ‘process’ perspective of the BSC, either require certain change to be managed or some parameter(s) to be kept within desirable range or both. Let’s illustrate this by combining it in a single case where a strategic goal is supported by certain process which is no yet implemented. Thus there will be another ‘means’ representing the project to implement that process.

KPIs are either primary or derived. In the example, the strategic goal is measured by a KPI 1 (derived) which is calculated by the value of KPI 1.1 (primary), KPI 1.2 (derived) and some specific attribute of their relations like weighting for example. KPI 1.2 is calculated from the values of the project KPI 1.2.1 and the process KPI 1.2.2. They are in reality more than one for both project and process management. If the project duration is shorter than the control frequency  of the strategic goal, then for ‘period 1’ KPI 1.2 will take KPI 1.2.1 and KPI 1.2.2 value times their respective weighting. For ‘period 2’ KPI 1.2.1 will be equal to the value of KPI 1.2.2.

Such an approach needs the support of a repository based tool for modelling and analysis. No matter if its primary focus is EA or BPM, it should support enterprise motivational domain and ideally project and program management.