Leaders Who Think Across Silos

A Newsweek article titled ‘Know What You Don’t Know’ interviews Cisco Systems CEO John Chambers and plumbs his insights into the futre of leadership. One passage caught my eye in paticular:

You came out of law school and a general business background. Now you’re leading people with highly technical backgrounds. Is that a different leadership challenge than in leading journalists, or artists, or salespeople?

Yes. Engineers are part business leaders, part artists, and you’ve got to know which hat they have on. However, there’s a fundamental change that may be really important to the future of business in this country and the world. At Cisco, we are moving to collaboration teams, groups coming together that represent sales, engineering, finance, legal, etc. And we’re training leaders to think across silos. We now do that with 70 different teams in the company. So we’ll have a sales leader go run engineering. A lawyer go run business development. A business development leader go run our consumer operations. We’re going to train a generalist group of leaders who know how to learn and operate in collaboration teamwork. I think that’s the future of leadership.

Cross-functional teams. Generalists. Learning organization. Collaborative teamwork. Great ideas, but hardly the future of leadership. These ideas are straight out of MBA cases studies of Japanese business practices of the past half-century. This is not to say that all Japanese companies practice these ideas well, or in some cases even at all. The organization into teams, cross-functional collaboration and the development of generalist leaders by rotating them through various departments and roles to acquire company-specific knowledge are well-documented classic approaches that deserves more attention, and it is encouraging to see Cisco Systems taking them up.

The challenge for Cisco to copy these ideas will be to first understand how these practices can be adopted outside of Japan’s specific national, cultural and business environment. For example the development of generalist leaders assumes success in retaining people long enough to take them through multiple rotations of 2-3 years in various management roles, moving from engineering to sales to purchasing for example, often with only slight promotions if at all. Senior executives in major US corporations remain at the same company an average of 4-5 years, and senior managers slightly longer. The Western expectation of promotion ever 2-3 years, climbing the corporate ladder vertically, rather than exploring other silos is another challenge. Western firms often hire specialist managers or technical leaders from outside of the company with limited or company-specific knowledge, in comparison to Japanese companies who value stability and harmony and promote from within. The shock of new blood to an organization can be positive or negative, just as Japanese firms who resist new blood can grow sluggish and myopic. The understanding of these and other factor will determine the long-term success or failure of John Chambers’ plans for leadership development at Cisco.

I am curious as to how Cisco Systems is “training leaders to think across silos”. The real solution should be to “train leaders who remove silos” and connect people in customer-focused processes. No doubt a certain amount of this is happening at Cisco through their efforts to implement lean thinking and lean systems. The question though is whether “the future of leadership” is really to create leaders who simply think across silos without challenging the need for them to exist, or whether the future is to develop leaders who envision and build a totally new way of organizing, collaborating and enabling customer-focused innovation. This is much harder of course, and the typical CEO tenure may not allow the continuity for Cisco to accomplish this.
Creating leaders who truly think and act across silos requires addressing the cultural root causes of silo thinking. This goes deeper than simply changing the lines of reporting, team structure and definition of silos. Those are just artefacts. What enables or prevents silo thinking is a combination of how people are measured, incentivized, how responsibilities and accountability is assigned, and how the role of leadership is understood. It is useful to understand the origin of the modern silo-based functional organization chart. In The Leader’s Handbook by Peter R Scholtes there is a story of the tragic Western Railorad passenger train collision in 1841. The modern organization chart did not exist within industries at this time, and as a result of this accident and the need to answer the questions such as “who did not do their jobs correctly?” and “who is to blame?” this Prussian military-style organization chart was born and soon widely adopted.

So early in the age of railroads, with cottage industries transitioning to steam-powered industry, it is not hard to understand this desire by leaders of industry to create a “mechanical” organization structure with clear functional responsibilities and quick assignment of blame. Unfortunately even today, long after we have heard the truth in Dr. Deming’s words that assignment of blame never addresses the multiple systemic root causes of a problem, the silo-based organization chart persists. While processes, standards and controls are vital to the running of any organization there is a limit to the effectiveness and scalability of command and control. What then is the future of leadership?

In order to answer this question we need to clearly define the problem of today’s leadership. The problem may be different for each organization. The root causes of these problems are ultimately systemic, requiring us to examine mindsets and behaviors and not only the superficial structural factors. The countermeasures may be specific to each organization within their context and culture, even if the root causes are the same. For example a family-owned business that is run as a tribal organization with strongman leadership should not envision a leadership future that leaps immediately to the vision described by the Cisco CEO. There is a need to evolve in stages, even passing through the silo-organization chart phase for a time. Likewise a mature, modern multi-national organization may need to work on leadership skills development, structural modifications to the power structure, negotiate with local or national labor organization or take other steps, or otherwise shake loose the status quo.

Defining the problem may in fact be the trickiest part of organization redesign and envisioning the future of leadership. Simply copying best practice models that seem to be working elsewhere, or with which the CEO has experienced prior success, may be necessary but not sufficient. The Cisco CEO interview referred to a 5-year product planning process and a similar process is needed for organizational development.

Customer-focused, strategic questions to ask may include:

What does a leader lead? This may seem like a simple trade off in horizontal versus vertical, value stream versus silo, systems thinking versus local optimization, but form must follow function and we should not be dogmatic and insist on either-or. The organization serves the customer and the leader serves the organization.

Where should a leader lead? The lean hypothesis is that leaders are more effective when they have access to good information more quickly, when two-way communication happens and when leaders are visible in their support for the organization. The “go see for yourself” principle of lean leadership is challenging but essential for multi-national organizations.

How should a leader lead? This is the fundamental choice that the Cisco CEO hints at, of the leader being a technical specialist, artist or hero-manager or a generalist, team builder and teacher. Because the majority of leaders and success paths today are skewed towards the former, many organizations need to at least consider the merits of the latter model.

When in doubt, the vision of the future of leadership should be biased towards “simple, local, direct”, unless the customer insists on pay for something else. This is by no means an exhaustive consideration for this important topic and I encourage the readers to build on the discussion.

7 Comments

  1. Jamie Flinchbaugh

    June 6, 2010 - 2:57 pm

    Interesting comments from Cisco. Moving people around will expose them to other functions, but it won’t eliminate silo thinking. That “solution” assumes that the “root cause” is empathy, or lack thereof. It’s a more complex problem than that. I’ve seen managers who think Department B is full of garbage, and literally the week he transfered to Department B, he thinks Department A where I came from was full of it.
    I think it starts with helping people manage their connections. Whether an individual contributor, a front-line supervisor, or a division president, I believe everyone can expand their perspective one link (at a minimum). Instead of looking at your work beginning when you start touching it and end when you stop, your work should begin when the previous person in the process finishes their work and ends when the next person begins. Instead of just including the activity in your scope, include the connection to your customer and supplier. It’s a small step, and only a step, but it’s a step in the right direction.
    Jamie Flinchbaugh
    http://www.jamieflinchbaugh.com

  2. mark chamberlain

    June 7, 2010 - 4:48 am

    Training managers to think or manage across silos by giving them experience by working in them is the long road. It surely does give them experience and generalist knowledge of what each silo does and how it interacts with the upstream and downstream silos.In Western companies I would suspect that after four rotations these leaders will be ready to leave for higher paid roles elsewhere with their new found general silo management knowledege. To get management to understand how to manage across silos we need to give them a valuestream to manage.By it’s very nature this will drive the dissolution of the silos and manage value from the customer perspective across the enterprise.Teaching future leaders how to change and create organisations that do not operate with silos, but with value flowing to the customer is the future

  3. George Rathbun

    June 7, 2010 - 7:16 am

    John, one of the problems I experienced firsthand, and what is very likely to happen at Cisco (if the CEO does not maintain 100% engagement with this vision) is that due to the western culture this cross-training at the top tends to solidify Silos rather than break them down.
    What I have experienced is that managers learn the strengths and weaknesses of the silos and use them not to the company’s advantage, but rather to their own advantage and that of the Silo they are currently leading. This is perhaps due to the fact that getting that next, but scarce promotion becomes so paramount that setting-up the failure of leaders working in other ‘known’ silos becomes part of every silo-leader’s strategy…
    To truly break down the silos, Cisco will need to promote cross-functional activities at the middle and lower levels.
    George Rathbun
    INCENT Solutions

  4. David M. Kasprzak

    June 7, 2010 - 9:22 pm

    Your mention of Scholtes’ work is spot on. Instituting rotations doesn’t result in the elimination of silos. Eliminating the silos results in employees who desire rotations.
    Current leaders have, most likely, been developed under a system where they expect to have command & control over a specific business unit or function. If they can’t get that in their current company or position, they will move to the path of least resistance. Since personal financial and self-esteem benefits are derived from climbing vertically, there’s little incentive to move horizontally.
    If we change the manner of compensation, and not necessarily the amount of compensation, we may lay the foundation for overcoming systemic defects in the way in which future leaders are developed and, in turn, affect the types of organizations they create.

  5. Lean MRO

    June 8, 2010 - 5:37 am

    Wow, quite a heavy read! Took me long enough to reach the end, but you covered some very good topics. I work for a consultancy who implement this method of thinking and i can never get enough of peoples opinions on it!

  6. John Santomer

    June 9, 2010 - 1:42 am

    Dear Jon,
    I can relate to George Rathburn’s concerns. The points raised by Jamie Flincbaugh, David Kasprzak and Mark Chamberlain are also valid. My questions though; can the following address the concerns raised?
    People are normally looking for improvement, if the “hoshin” of each manager specifically states that he can only be promoted IFF – improvements were done within his department as a result of the rotation and/or the contribution of another manager (an additional credit to the contributing manager of another silo); will that not help remove silos altogether? I think this will help in team building; in a way, remove the need for competency across silos. Also if the career path of a manager within his own department is clear and he has no means to acquire a position outside his own department but rather has a contributing responsibility to other departments stated in his “hoshin” (meaning he has no power to change, critique, and implement changes except only within his own silo) will that not stave off the “itch” to get a scarce promotion at the expense of another manager? In this set-up, all the cross trained manager should have a group consensus on decision making relating to observed points for improvement on a particular silo instead of one manager advancing because of his own personal observation and interest. Lastly, if a career path or change in it is clearly laid out including the requirements to pursue a higher level, will this not give the associates and the managers something to aim for and look for more improvement whether it is financially or career wise?

  7. Joseph

    June 11, 2010 - 11:24 am

    Jon.
    I would like to think that this strategy by the CEO is based on seeing the effects of LEAN as launched on the shop floor. Doing LEAN on the management would seem the next step. I see this as PDCA. Most jobs fall into a 90% – 10% breakdown. 90% of the job could be done by most people of a simular mind set and 10% is job specific experties.
    Putting managers into other departments to get another experience is what TPM does in maintenance areas. Combine jobs to make multi skilled trades men. This however is followed by reducing the number of trades men.