Platt Perspective on Business and Technology

Thinking through tables of organization and their communications enablers and barriers 2

Posted in strategy and planning by Timothy Platt on October 16, 2013

This is my second posting to a series on tables of organization as they arise in practice in real organizations, and with both real-world strengths and enabling qualities and with real-world limitations (see Part 1.)

In an earlier series of postings: Best Practices for Building a Better Table of Organization (at Business Strategy and Operations – 2, postings 217 and following for Parts 1-5) I discussed and outlined a series of approaches for building a better table of organization that is more aligned with and supportive of the business and its goals, strategy and operations. In Part 1 of this series I outlined a number of ways that a table of organization can shift away from that critical alignment, and at overall cost and risk to the business as a whole. Then at the end of that posting I said I would continue its discussion in a second installment, here focusing on how table of organization inefficiencies and disconnects can contribute to the formation of deleteriously impermeable silo walls and the formation of what amount to local corporate fiefdoms. That is my goal for this posting. But to build a foundation for that I begin that discussion with at least a brief look at organizational silos per se. And I begin with an important if seemingly contrarian assertion:

• Organizational silos and even what amounts to the development and maintenance of relatively impermeable barriers between areas of a business and the rest of that business as a whole, are not necessarily problematical. They can at times even be essential for that business’ ongoing success and they can be essential risk management solutions.

Two example scenarios come immediately to mind for me there, and I cite them here as I have seen both play out in real organizations as necessary day to day realities:

• Regulatory-driven compartmentalization: Legal due diligence can in effect force businesses to sequester certain operations and their task-specific information resources from the rest of their overall organization. This can mean building organizational structures to more robustly and securely comply with regulatory law that is designed to limit exposure of personal or other confidential information. Or it can mean walling off teams-based functional areas of a business organization with responsibility for specific areas of government classified or otherwise sensitive work so that can be protectively kept behind secure walls.
• Unique value preservation-driven compartmentalization: I have seen this where a larger organization brings in a critically important smaller business acquisition that offers products or services, or proprietary technology, or market research or reach … some source of defining value that the larger acquiring organization could not otherwise cost-effectively obtain. But this acquisition offers its unique value because of its corporate culture and its organizational approach that are very different from those of the now-parent organization. Setting this now-acquisition as if a stand-alone business for how it internally operates and in its own protective silo can, in the right circumstances, be essential for preserving it as a vital ongoing source of acquired value.

So I start out this posting by stating that the silo walls that I write of here are not put in place to meet risk management concerns or to preserve unusual but significantly important sources of business value. And I will add they are not set up or maintained to preserve trade secrets or for other positive reasons. They simply develop and their walls simply get thicker and higher. So I am talking very specifically about pathological silo formation and proliferation here, and offer the above as context for what that does and does not mean.

Now let’s consider pathological silos. Managers sometimes cultivate and grow their own corporate fiefdoms within a larger organization in pursuit of their own personal agendas. Sometimes this means building a power base of personal control and ownership. I have also seen this happen when a manager is looking for personal career advancement and is, at the very least, primarily concerned with bolstering their own resume for next steps up. I am not writing about ego-driven silos here either.

• I am writing about internal barriers and silo walls that form as protective measures to limit the impact of organizational disconnects and dysfunctionalities,
• And particularly where they arise from organizational problems that also express themselves as table of organization problems.

And I begin that with the fundamentals:

• A good table of organization clearly states who reports to whom, and who is responsible for whom for supervisory support and oversight.
• When a table of organization breaks down, chances are that the most pressing indicator of that is ambiguity as to who has oversight control and authority for what, and with gaps where perhaps even critically important functional pathways are left out of control. As a working example, I find myself thinking of a very specific business that was formed out of a merger of two smaller, previously competing firms – and their tables of organization where at best only partly connected, with dysfunctional duplications and with organizational and functional gaps left in place. Their new combined table of organization showed single lines for each of the key functional areas but as the saying goes, the devil is in the details. And between dotted line and informal matrix management and other irregularities from stated organizational approach, there was a lot of uncertainty and some real acrimony to be dealt with.
• So groups that initially came from one or the other of the two firms that had joined together, carved out control and oversight for some of their ambiguous organizational gaps. People who would ultimately be held responsible for failures in them, took over them as protective measures.

I cite an extreme of real example here, and add that this was a business I backed out of working with as their internal barriers and the distrust that went with them was such that it was literally impossible to get senior executives from the two sides in the same room at the same time to deal with these conflict areas. And I would have gone in as a consultant to help build a single solution approach where both former firms had what amounted to competing branches on their table of organization – both of which were becoming increasingly problematical.

I do not think that any of the people I met with there were megalomaniacs, out to build personal empires. None of them were looking to burnish their resumes with favorable accomplishment bullet points and regardless of the benefit or cost of that to the organization they were working for. They were not looking to move on and they wanted their business to succeed. Rightly or wrongly they were all walling off functional areas and responsibility areas for their own protection and for the protection of their colleagues who they had been working with from before the merger and who they personally valued.

I want to finish this posting with a more general concluding thought. When you see an emerging organizational or functional discontinuity or inefficiency and the business does not seem to be able to address it effectively, start out by asking what this might be a symptom of. You cannot solve an underlying problem simply be addressing its symptoms as they serially appear and recur. You have to identify and work on the underlying problems and issues, and I add the deepest ones that you can arrive at as being causally connected to those initially presenting symptoms. And you have to be able to bring the right stakeholders into a room to achieve buy-in on what is wrong and on what has to be done to fix it.

In my example above, the initial problem I was invited in to discuss turned out to stem from and relate to underlying table of organization disconnects and other problems. And they had still deeper underlying causes. But it was not going to be possible to get the necessary stakeholders on any same page for any of this, or even into the same room to try. Not perhaps surprisingly this two part series turns out to be about change management, and in this case knowing when it is or is not going to be possible.

You can find this posting at Business Strategy and Operations – 3 and related material at Page 1 and Page 2 of that directory.


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