The Silo Lives! Analyzing Coordination and Communication in Multiunit Companies
Toby E. Stuart, interviewed by Sarah Jane Gilbert
This is a riff in Harvard Business School Working Knowledge about a study documented in this faculty paper: Communication (and Coordination?) in a Modern, Complex Organization. The gist is that large organizations still consist of nearly independent little units that don’t communicate with one another.
An analysis of hundreds of millions of emails and calendar entries involving 100,000+ employees found corporate denizens conversing electronically with the same people they already deal with face to face. Most likely to hop outside the confines of their unit and physical location were women, junior execs, and sales & marketing types.
Although every leader at some point in their careers becomes frustrated with the difficulties of coordinating behavior across organizational units, we were surprised by how little interaction occurs across three major boundaries: the strategic business unit, the organizational function, and the geographic office location.
Our analysis indicates that two people who are in the same SBU, function, and office interact about 1,000 times more frequently than two people at the company who are in different business units, functions, and offices, but are otherwise similar. Practically speaking, this means that there is very little interaction across these boundaries.
Communication patterns were extremely hierarchical: Executives, middle managers, and rank-and-file employees all communicated extensively within their own levels, but there were virtually no cross-pay-grade interactions in the firm (other than mass e-mails and between administrative assistants and the managers they support).
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{ 3 comments… read them below or add one }
Hmmm, I wonder if this study is an indication of the optimal size of a network for usefulness, or at least a timely response to new data?
My experience is that this type of interaction among co-workers is very common and I’ll bet it is also the same for non-work networks as well (social networks). I think it goes back to Everett Rogers’ explaination of the “strength of weak ties.”
As Rogers indicates (sorry to get all academic), “the information-exchange potential of communication networks links is negatively related to their degree of (1) communication proximity (location) and (2) homophily (which is the degree to which a pair of individuals who communicate are similar.)
I think people that are similar in attitude, job function and especially location tend to think and act alike which stiffles creativity and innovation.
To innovate, you have to hang out and communication with people that you don’t normally hang out and communicate with…in most organizations, that’d be the customers.
Karl, that’s precisely the point. Silos are echo chambers. jay