Competing Silos (October 2010)

Last month, I wrote “Is Ignorance Bliss?” which was about the effect that a lack of perspective on a company’s financial situation has on an organization. One of the side effects of this is silos within an organization. While the lack of financial perspective isn’t the sole cause of a silo-ed organization, I certainly believe it is a contributing factor.

“The silo effect” is people working only with their own or departmental goals in mind, often to the detriment of other departments or the entire organization. I almost always find that there is a lack of perspective on financial performance for the organization as a whole. People simply don’t understand the “bigger picture”. It’s often not their fault. No one has ever given them the data and facts, even in a limited fashion.

Rather than pulling together and fighting against the competition, people end up fighting with each other for internal resources. Victories are about winning vis-à-vis other departments. People consider it a “win” when they get to add a person and another department doesn’t. When they get above average raises for their people. Or when one department gets new computers while another doesn’t. These “victories” are often based upon the political influence of department heads (i.e. how effectively they lobby their points) as opposed to the optimum allocation of resources within an organization. This is destructive to the organization, causes further competition, resentment by the “losing” departments, and contributes to an apathetic attitude toward the decision making process.

I believe people are naturally competitive. If that is true, then why not give them someone to compete against that is healthy to the organization? Otherwise that competitive energy will end up hurting the organization rather than helping it. Employees will end up competing with each other as opposed to your competitors in the marketplace.

There is story that at one point in the history of Anheuser-Busch they launched a “Kill Miller” campaign. Think about that. Two words and everyone in the company knew the objective. Moreover, it could be measured in terms of market share. Ultimately, everyone would know how the company was doing in its quest.

I spent five years at LensCrafters. The leadership team there clearly knew how to focus the organization’s competitive juices toward company objectives. There were times when it was simply inspiring to see the entire organization focus on an objective . . . and exhilarating to be part of accomplishing the goal.

If it is a given that people in your organization are going to compete (and I believe that to be the case), then give them something to compete against that is healthy to the organization. Make sure they know that the true competition is about winning customers in the marketplace and providing better products and services than the next guy. Not about who gets a new desk or office chair or which department gets a slightly bigger share ot the raise pool.

If your business could benefit from fractional CFO services, I would welcome the chance to speak with you. Please give me a call at (314) 863-6637 or send an email to

your cash is flowing. know where.®

Ken Homza
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