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The Silo Effect: The Peril of Expertise and the Promise of Breaking Down Barriers.

I. Introduction

Silos can be deadly. On September 11th, 2001, nineteen individuals, financed and directed by an international terrorist organization, used American passenger planes to kill nearly 3,000 people on U.S. soil. (3) The 9/11 Commission, set up in the aftermath of the attacks to investigate the circumstances leading up to them, discovered systemic failures within the federal government. (4) These failures allowed the hijackers to carry out their deadly mission from within the United States and under the noses of U.S. intelligence and law enforcement agencies. (5)

Subsequent to the bombing of the U.S.S. Cole in 2000, and into the summer of 2001, the U.S. intelligence community assessed that al Qaeda was planning a spectacular attack, but the when, where, and how were unknown. However, different governmental agencies possessed pieces of information, which if connected, could have helped to answer these unknowns. (6) For example, Zacarias Moussaoui, the so-called twentieth hijacker, was arrested in Minnesota in August 2001 for violating immigration regulations, and subsequently raised officials' suspicions because of his interest in learning to fly commercial airplanes. (7)

However, this information was not connected to increased reporting on a forthcoming al Qaeda attack. (8)

Information such as that concerning Moussaoui may have given the government some prior warning that the September 11th attacks were coming, but because of the silos that existed within the government at the time, information that should have been shared among different agencies was not. (9)

In simple terms, silos are divisions within organizations that hold something important, and make it hard for others access. (10) In the case of the U.S. Government, agencies created during the Cold War and designed to confront the Soviet Union, suddenly didn't work when confronting a diffuse, worldwide terrorist organization. (11) It took the September 11th attacks to show how deadly these silos within our own federal government could be. (12) In The Silo Effect, Gillian Tett takes on the issue of silos, illuminating them through multiple case studies to provide the reader a framework for understanding what they look like, how to evaluate them, and how to eliminate, or at least, limit their effects. In Tett's view we live in an interconnected world, but despite this, many organizations are fragmented into silos, or insular worlds of specialized expertise, which fail to communicate or collaborate with one another. (13) As a result of this, the people in these silos, and the organization relying on those people, suffer from a kind of myopia that prevents them from seeing risks or opportunities that they might see without this fragmentation. (14) Tett does not maintain that silos are necessarily harmful to organizations; in fact, she acknowledges that they can be both necessary and good in the correct context. (15) However, she does maintain that it is necessary for organizations to recognize that silos exist, and develop a framework for recognizing whether they help or harm the organization. (16)

II. The Framework

Tett organizes her ideas around the view that since silos are really systems for organizing information into a logical framework, and the field of anthropology is inherently focused on the way cultures organize themselves, anthropology provides the best framework for studying them. (17) She gives six reasons for this: first, anthropologists take a bottom up view of the world; second, they attempt to see how different parts of a society interact together; third, because they are interested in cultures as a whole, anthropologists often examine aspects of culture that may seem innocuous, but turn out to have a significant effect on that culture; fourth, they listen to people and contrast people's statements with what they actually do; fifth, they look at cultural systems with new insight because they compare them to other systems; and sixth, they acknowledge that there is more than one correct way of doing things. (18) Tett then applies this framework to seven case studies: three studies of silo's detrimental effects on organizations and four discussing individual or organizational responses to silos.

III. The Case Studies

Chapters 2, 3, and 4 of the The Silo Effect focus on three organizations overcome by their institutional silos. In chapter 2, Tett examines how at the turn of the last century, Sony Corporation, the company that invented the Walkman portable cassette player, failed to be competitive in the digital music delivery market, in spite of their earlier success with the Walkman. Sony's different departments were so insular and non-collaborationist that two separate departments, the consumer electronics department and the Vaio computing department, each created and released digital music offerings without consulting with the other department. This damaged Sony's potential for innovation and was confusing to industry watchers and consumers. (19) Chapter 2 represented one of Tett's stronger chapters. She very clearly illustrates how silos developed within Sony over time, and how the company's history, structure, and leadership all inadvertently helped to keep them in place to the company's detriment. Using the anthropologist's tool of comparing societies, Tett is able to contrast the situation at Sony with that at Apple, a company that became the giant in digital music delivery at the same time that Sony entered its decline. In Tett's view, this was due to Apple, and specifically, Apple CEO Steve Jobs', imposition of a culture of collaboration and cohesiveness in his company that did not exist at Sony. (20) Tett supports this claim by showing that Sony ran profits and losses by individual departments within the company, rather than as Apple did, on a company-wide basis. (21) This created a perverse incentive for departments to be overly protectionist of their own developing technologies and ultimately resulted in the dueling digital music devices fielded by Sony. (22)

Chapter 3 examines the case of UBS, the Swiss banking giant, and how its structural silos concealed significant financial risk when one department started buying up risky mortgages that were not properly collateralized by the bank and were actually ignored by the bank's risk managers. (23) In chapter 4, Tett examines how economists, as a distinct social group, failed to foresee the 2008 financial crises. Essentially, while the way that economists understood the financial system was sound if viewed from within their particular areas of expertise, they failed to account for fundamental changes occurring within the financial system outside their rigidly constructed mental silos. (24) Because of this, they missed some of the cues that problems were developing within the economy. (25)

While useful, chapters 3 and 4 suffer from a significant defect: in a book that relies on humanities for its overarching argument, Tett uses technical examples from the financial industry and macroeconomics, without providing sufficient explanation of these systems.

For the reader unfamiliar with the worlds of finance and economics this can make for daunting reading. It is not without trying that she does this, as can be seen in this excerpt:
   A few months earlier, UBS had created a
   department in the New York office
   dedicated to trading something called
   "collateralized debt obligations" or CDOs.
   This was a particularly specialized field in
   the business of securitization. Essentially,
   it revolved around the craft of taking
   bundles of different loans and bonds, and
   turning these into complex new financial
   products. One way to visualize this
   process is with the image of how a butcher
   makes sausages. Instead of simply
   grabbing a carcass and selling steaks, a
   butcher will sometimes take numerous
   different joints, chop them up, and mix
   them according to somebody's taste, and
   then sell it inside new casings. The process
   of creating CDOs echoes this, in financial
   terms. The banks start by amassing loans
   they have made to customers (companies
   or consumers), break these down into
   different pieces of lending risk, mix them
   up, and sell them to new customers in new
   cases called CDOs. (26)

For anyone unfamiliar with the world of finance, the sausage example may create an interesting visual analogy, yet it sheds little light on the actual processes Tett refers to. It is unfortunate that Tett could not illustrate her point with examples that were as accessible as the Sony example in chapter 2.

Tett moves on in chapters 5 through 8 to discuss four cases of individuals or organizations overcoming silos. Chapter 5 concerns Josh Goldstein, an executive with the internet start-up OpenTable, who was motivated by the September 11th attacks to do something which made him feel like he was contributing more to his community. (27) Goldstein quit his job at OpenTable and was accepted into the Chicago Police Department's police academy. He later, parlayed his analytic skills into a position within the department's headquarters where he developed a way to forecast where violent crime was most likely to occur in the city. (28) Tett's stated purpose in telling this story is to illustrate how individuals can combat silos, and as she points out, "one of the most basic steps that we can make to fight the risks of silos starts ... inside our heads." (29) However, other than this single story, Tett fails to provide much insight on what we might do in our heads to combat silos. This is unfortunate, because as Tett rightly states, organizations are collections of people, and because of this fact, it seems the more dangerous type of silo would be the mental silo that perpetuates the structural silos in organizations. (30)

In chapters 7 and 8, Tett provides examples of two organizations, one consciously preventing and the other breaking down, institutional silos. In the case of FaceBook, managers specifically set out to avoid the pitfalls that affected Sony. (31) The company began a systematic training regimen for all incoming employees in order to inculcate FaceBook's institutional values and create a sense of shared purpose before employees moved on to their specialist teams within the organization. In addition, FaceBook developed a program it called "Hackamonth" where an employee who had been in the same job for about a year would move to another team of their choice for a month and at the end, was given the option to stay with that team or go back to their original team. According to Tett, this prevented teams from developing into hardened silos within FaceBook.

In the case of the Cleveland Clinic, one of the nation's premier hospitals, rather than rotating professionals within the organization, the hospital altered the old system of classifying medical professionals by their particular skills, and instead reorganized them around specific parts of the human body or specific illnesses. So, rather than maintaining a delineation between surgeons and physicians for example, the hospital placed everyone responsible for treating the brain, or a certain type of cancer, in to one interdisciplinary team. (32)

The big takeaway from both the Cleveland Clinic and the FaceBook examples seems to be that organizations who spend a lot of time and effort looking inward and using creative strategies to prevent or breakdown silos in their organizations will be rewarded with better performance. However, neither organization's tactics should be taken as a panacea since their solutions to the issues their organizations faced were very specific to their purposes: medicine and technology. What these examples do is provide a good example for how an organization might seek to look within itself and creatively limit silos.

In chapter 8, Tett attempts to show what she means by silos blinding organizations to "exciting opportunities." (33) She moves back again to the world of finance, explaining how a hedge fund called Blue Mountain Capital took advantage of silos within its competitor's organizations to play the market and make money at the competitor's expense.

Unfortunately, just as in chapters 3 and 4, chapter 8 is so riddled with jargon that it is hard to follow for the average reader. The only real takeaway for those unfamiliar with the finance industry is likely to be one can use a competitor's silos to their own advantage. It seems there are other more accessible examples Tett could have used to illustrate this point. A prime one, taken from one of her earlier chapters would be how Apple's management style took advantage of Sony's rigidly hierarchical organization to become the market leader in portable music technology. (34) This would have given Tett the opportunity to not only examine how apple exploited Sony's silos, but to examine in more depth how Apple is organized in a way that prevents silos from forming within itself. (35)

IV. The Takeaway

In Tett's view five lessons emerge from the case studies she presents. First, fluidity within organizations, that is, ensuring people are able to move or communicate freely within organizations, e.g. FaceBook, can help prevent the development of silos. Second, organizations should be careful to not incentivize sub-organizations to be noncollaborationist, that is, to take heed of the example of Sony where each department maintained its own separate profit and loss sheets. Third, developing information sharing systems among departments can help avoid organizational risk, such as happened at UBS when the right hand did not know what the left was doing. Fourth, that people should be willing to re-examine the classification systems they are given and not just accept them based on precedent. And finally, using the wealth of data the information has provided us access to can be an important tool in breaking down silos, such as in the example of Brett Goldstein's crime forecast. (36)

While these are useful lessons, Tett could have given more attention to their opposing arguments. For example, when does fluidity within organizations create efficiency issues?

In the example of the FaceBook Hackamonnth process, at what point are the returns from this process diminished by the disruption it causes among teams? In her preface, Tett tells the story of the city of New York using multitudes of data it collects on its citizens to determine what buildings could house fire hazards. But as The Guardian newspaper has pointed out, one thing Tett might also want to ask is what the downside could be to government agencies, or corporations for that matter, collecting and using large amounts of data on individuals? (37) As Tett acknowledges at the outset, sometimes, silos are necessary. (38) However, she fails to provide examples of what a necessary silo looks like versus one that should be broken down. The most relevant example to Army Judge Advocates being the Army's Trial Defense Service, which is itself a silo, for good reason. (39) It would have been nice if Tett had provided some insight on where the tipping point lies between useful silos and damaging silos.

V. Conclusion

The Silo Effect is a compelling work that will hold the interest of anyone who has ever been part of a large organization. It is thought provoking in that it defines a problem that people are likely to recognize exists, and provides a framework for devising solutions to that problem. However, the book does have flaws that limit its usefulness and should be read with this fact in mind.

Reviewed by Major Alex C. Barnetf, Judge Advocate, U.S. Army. Student, 65th Judge Advocate Officer Graduate Course, The Judge Advocate Gen.'s Legal Ctr. & Sch., U.S. Army, Charlottesville, VA.



(3) Id.

(4) Id.

(5) Id.

(6) Id.

(7) Id.

(8) Id.

(9) Id.

(10) Vijay Govindarajan, The First Two Steps Toward Breaking Down Silos in Your Organization, HARV. BUS. REV., (last visited Apr. 19, 2017).

(11) KEAN & HAMILTON, supra note 3.

(12) Id.

(13) TETT, supra note 1 at 13-14.

(14) Id.

(15) Id. at 19.

(16) Id.

(17) Id. at 19-20.

(18) Id. at 251.

(19) Id. at 54, 62-63.

(20) Id. at 63-64.

(21) Id.

(22) Id.

(23) Id. at 91, 97.

(24) Id. at 108-09.

(25) Id.

(26) Id. at 88-89.

(27) Id. at 139.

(28) Id. at 139, 152-57.

(29) Id. at 142.

(30) Id.

(31) Id. at 169.

(32) Id. at 205.

(33) Id. at 247.

(34) Id. at 63-64.

(35) Tim Bajarin, Three Ways Apple Sets Itself Apart from the Competition, TIME, /2012/07/30/3-things-that-set-apple-apartfrom-the-competition/ (last visited Apr. 19, 2017).

(36) Tett, supra note 1 at 247-50.

(37) Steven Poole, The Silo Effect by Gillian Tett Review - A Subversive Manifesto, The Guardian (Oct. 17, 2015), /2015/oct/17/the-silo-effect-why putting-everything-in-its-place-isnt-such-a-bright-idea-gillian-tett-review.

(38) Id.; Tett, supra note 1, at 13.

(39) U.S. Army Trial Defense Service - History, U.S. Army Trial Def. Serv., homeContent.xsp?open&documentId=C440AF1C 1F5 5 89C285257B49006 9B306 (last visited Apr. 19, 2017) (explaining why TDS exists as a separate organization outside the purview of unit/installation SJAs).
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Author:Barnett, Alex C.
Publication:Army Lawyer
Article Type:Book review
Date:Apr 1, 2017
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