Business Strategy Consulting

Bridging Business Silos

My colleague David Burgess recently wrote on Optimal Organisation and made the comment – The argument that organisational structures can form “silos” which leads to dysfunctional outcomes simply highlights that the procedures are not developed to link the organisational structures to provide the desired outcome.

Now didn’t that strike a chord with me. I had a client who wanted help defining his business strategy and putting this into a business plan that could guide his management team. I started by chatting with his managers and quickly realised that none of them had the same understanding of the businesses direction, or their role in it as the CEO. This surprised the CEO as he had lunch with members of his management team every day, generally meeting each of them in this way over a fortnight.
Of most concern was the fact that some of the management team believed one of them was a “protected species” – roles had been created for him to move him out of areas where he had not succeeded. Worse, this particular manager would redefine his role to suit what he was comfortable with, rather than what was required by the business.
Now we can all see that this was something that should have been addressed by the CEO, but it wasn’t.

This took the planning project off on a tangent as it was obvious we needed to define the critical functions and related roles within the organisation so we would have a management team able to implement the plan. A functional organisation structure was needed.

Functional Organisation is arguably the most effective form of organisation, because it is designed around functions, rather than people. Each function has its own responsibilities, separate and distinct from any other. The functions don’t overlap, and the scope never changes to fit an individual. Individuals are chosen to fill functions based on their ability, knowledge, training and experience.

Once we established a functional management structure team spirit improved because each department became a team with all personnel within the department reporting to a single person who has complete responsibility for the performance, training, guidance and direction of the department, and who also has the authority to make the department fully effective in accomplishing its goals. While each department must communicate, cooperate and coordinate with all other functions in the company to achieve the company’s overall goals, each individual now reports to only one person, and all directives, orders, requests etc., will be funneled through that person.

Like so many things in business it sounds so simple, but you may be surprised how often it is not the case.