NOTIONS: This silo story could be about your business

Bruce Hetrick is on vacation this week. In his absence, this column, which appeared on March 4, 2002, is being reprinted.

Once upon a time, there was a manager who worked in a big place. This manager directed a few dozen employees in a subsection of a department within a division beneath the left armpit of an organization.

The manager admired the organization’s role in the world, but grew weary of fighting the other subsections of departments within divisions beneath its various bodily cavities.

If the manager needed a computer for an employee, for example, there was a capital budget process, available only once per year.

To participate, the manager had to complete many forms, in triplicate, and write many paragraphs explaining why the computer was needed.

The manager’s request was then weighed against requests submitted by other managers directing other subsections of departments within divisions.

If the manager wished to market the subsection’s services to other subsections, the manager had to complete marketing forms, in triplicate. The forms asked what the marketing should achieve, which audiences must be reached, how the program would operate, how results would be tracked and how soon the effort was needed (but no sooner than six months from the original date of request).

Part one of the marketing forms went to advertising. Part two went to public relations. Part three went to administration and finance, which, as a rule, said that all advertising and public relations budgets had been depleted for the year. Therefore, the subsection’s request would be placed in line for next year’s marketing budget.

In the unlikely event that its marketing request was approved, the subsection had to deal separately with advertising and PR. That’s because, as a rule, these two subsections did not get along. In fact, the subsections’ employees and managers spoke to one another only rarely, usually at goingaway parties for shared-but-frustrated clients.

Unable to accomplish anything because of computer-less colleagues and unmarketed services, the frustrated manager quit.

Unburdened by management, the unmanager hung out a shingle. The selfdubbed entrepreneur claimed to offer every service the subsection had offered, but without the departments within divisions.

For a while, the entrepreneur’s life whirled with activity-calling on customers, closing deals, doing work, sending bills, collecting receivables, paying taxes.

But soon, there was more work than the entrepreneur could handle. So a colleague was added, then a second, then a third, then a bookkeeper, then a receptionist, then an executive secretary, then scores more colleagues. Next came an accountant, administrative assistants, an attorney, department heads and divisions in Omaha, Cleveland and Katmandu.

Before long, the entrepreneur had four senior executive chief administrative honchos running various bodily cavities to oversee divisions that operated departments that coordinated subcategories directed by managers who oversaw the collective efforts of employees.

But the entrepreneur (now dubbed “the chairman”) awoke one morning to the shocking discovery that the entrepreneurial shop had become-egads!-an organization.

Hoping to avert déjà vu, the chairman split the organization into silos, each headed by a senior executive chief administrative honcho. That way, said the chairman, each silo would deliver dramatically increased profits by operating entrepreneurially.

The silos were built not around customers, of course, but around the organization’s products and services. Soon, each silo boasted its own sales force, marketing team, accounting methods and computer systems.

What’s more, each silo had its own newsletters, logos and brochures-all bearing different messages printed in conflicting typefaces with clashing colors.

Inevitably, salespeople from different silos bumped into one another while delivering dueling brochures to the same customers. Next, those customers’ bills arrived, bearing duplicate charges from competing silos. Then, the customers found that it took three months for one silo to pay another and credit the errors.

The customers told the salespeople to get their act together. So the salespeople told the subsection managers who told their department heads who told their division leaders who reported in to the silo chiefs.

When the chair learned about the problem from six senior executive chief administrative honchos-during a board meeting, no less-a corporate identity consultant was retained to clarify relationships within and among the silos.

If you suspect this column is about your organization, it probably is. Egads.