Silos are a defining characteristic of organizations of all sizes, even in businesses that naturally operate as fluid networks. For example, management consulting firms are known for organizing around temporary project teams, but they also have formal expertise silos (often called practices) and fixed regional structures.

Of course, we often hear about the negative side effects of silos: Boundaries may lead to insular mindsets that inhibit sharing or collaboration between verticals, or worse, they could lead to finger-pointing and turf wars. The incitement to “bust” or “break down” silos appears frequently both in practitioner and scholarly journals.

But if silos are really such a bad thing, why then do they persist? Silos, or verticals, exist for three good reasons:

• To aggregate expertise. They provide the focus and critical mass required to develop expertise on an ongoing basis.
• To assign accountability. They provide boundaries and hierarchy that make it possible to assign accountability. Responsibilities are clearly delineated, objectives are well defined, resources are allocated firmly, and decisions are made and communicated quickly.
• To provide a sense of identity. They create stability and allow for the development of collective behavioral norms and ways of working. These, in turn, provide a sense of identity, security, psychological safety, and predictability for the people who belong to the silo.

As verticals serve a clear purpose – especially in today’s turbulent environment – we would like to mount a defense. Yes, verticals have undesirable side effects, but the solution is not to dismantle them. To preserve the strengths of the inescapable verticals while minimizing their side effects, organizations should do two things: build bridges between verticals, and institute checks and balances.

[Here are their thoughts about the first initiative.]

Building Bridges

The topic of building bridges between verticals has been well covered already elsewhere. Researchers André de Waal, Michael Weaver, Tammy Day, and Beatrice van der Heijden have identified four examples of how companies build bridges:

• Values. A company’s corporate values statement codifies the behavior that is expected from employees, and can serve as an effective compass for all. By including “one-company” behavior in its corporate values, a company signals that people should think and act beyond the boundaries of their verticals. It is no surprise that “collaboration” figures eminently in studies about frequently cited corporate values.
• Operating model. People within a vertical know by routine how they should go about their daily work. But they may feel less secure and be reluctant to collaborate with people in other verticals. Such collaboration can be facilitated by hardwiring the interfaces between the verticals: Defining clear procedures (for example for approvals, consultation, and communication across boundaries) and providing an enabling infrastructure (for example, a common IT platform). Responsibility models, such as RACI, PACSI and others, can help.
• Community and people. When building bridges, “softwiring” is as important as hardwiring. Companies must create opportunities for people from different verticals to get to know each other’s capabilities and interests, for example, through joint training programs, cross-functional innovation initiatives, and company-wide expert networks. Once familiarity is established, people will connect more easily whenever a concrete need for collaboration arises. Likewise, companies must pay attention to networking skills when recruiting people, designing training programs, considering sideways career moves, and measuring and rewarding performance.
• Leadership. The effectiveness of both hardwiring and softwiring depends on the company’s leaders. They should have the skills and incentives to collaborate, for example by having performance indicators that measure the desired behaviors. They should demonstrate collaborative behavior themselves, for example, by showing loyalty to the joint decisions made in the management team.

As the above list shows, bridges by and large call upon the enlightened benevolence of people in different verticals. That may or may not work: While managers may genuinely acknowledge the benefits of collaboration, they still compete with one another for resources, senior management attention and power.

This is where checks and balances enter the picture: They enable companies to minimize the side-effects of verticals more forcefully than bridges do.