Oct 13, 2009

HBS study of corporate silos

We know that organizations have silos that hamper the development of a leaner enterprise, but is there a way to quantify and understand what's happening within and across divisions and subgroups?

Harvard Business School postdoctoral fellow Adam M. Kleinbaum, and professors Toby E. Stuart and Michael L. Tushman took on the challenge by analyzing server logs of e-mails and calendars, publishing their findings in a working paper, "Communication (and Coordination?) in a Modern, Complex Organization."

They analyzed more than 100 million e-mails and 60 million electronic calendar entries over a three-month period in a 100,000-employee company--studying what Stuart calls the "soft wiring" of invisible social networks--and found that people tended to communicate within their own groups. "We were surprised by how little interaction occurs across three major boundaries: the strategic business unit, the organizational function, and the geographic office location," Stuart told Sara Jane Gilbert of the HBS Working Knowledge e-newsletter.

"Two people who are in the same SBU, function, and office interact about 1,000 times more frequently than two people at the company who are in different business units, functions, and offices, but are otherwise similar. Practically speaking, this means that there is very little interaction across these boundaries," said Stuart.

He also said that people tended to interact with others at the same level in the organization, making me think that higher management didn't communicate with operational managers much, which would happen in a leaner company. They also found that people mostly e-mail people they already talk to, supplementing personal relationships that already exist.

The exceptions: junior executives, women, and members of the salesforce were active in bridging silos. Stuart and his colleagues will be doing more work to try to learn why those people—and not others—play such important bridging roles.

Although the research doesn't try to answer why corporate silos are so difficult to tear down, Stuart hopes the data will help managers understand, pinpoint, and remove bottlenecks within their own organizations.

1 comment:

Scott Sorheim said...

This is very interesting. Thanks for sharing.

I've never liked silos myself. However, functionally I understand why the exist and the importance of having, for example, a product engineering team with talented people that can focus on developing a good product. So I can see why that teams' efforts and interactions would almost certainly involve the same group of people the majority of the time. I wonder if their data would reveal the value of having another group/person/people that have the responsibility of managing the whole value stream. Wonder if it would be possible to see the silo-ed organization that has this champion versus the one that doesn't. Seems like outwardly, the data would like similar in terms of interactions, with the exception of this smaller set (team/champion) that crosses the boundaries.

Thanks again!

Copyright @ 2005-2014 by Karen Wilhelm