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Beware Digital Silos, Coming to an Organization Near You!

If ever you needed a reminder that digital technologies on their own do not change business paradigms, accelerate speed to market or unleash swathes of innovation, then listen up. Digital silos are coming (or may already exist in your organization). This was a message aired at the Henley Business School’s annual regatta yesterday and was also a theme in a recent discussion about the digitization of factories in Europe.

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First up, Lebene Soga, PhD student from the Henley Centre for Leadership, reported on his research into a Fortune 2000 Pharmaceutical industry that introduced social media platforms into the organization, including Facebook and Yammer. The use of social was intended to encourage collaboration and cross fertilization of thinking, but as Lebene says: “Virtual silos emerged along departmental lines that replicated the physical organization”. Managers are now being tasked with having a presence in virtual communities in order to bridge the communities.

The second time that the topic of digital silos cropped up was in conversation with DXC Industry 4.0 consultant, Wolfgang Lucny, who reported the experience of a Finnish pulp manufacturer. The customer has queues of production line suppliers outside his factory doors, who are trying to flog their products-as-services. Whether a robot or a raw material, each as-a-service requires a discrete data connection into the factory; this generates network traffic and security vulnerability – and the biggest crime – doesn’t share any data collected.

If the philosophy behind digital is to enable thinking and action in joined-up and agile ways, then its application is to break down silos, rather than reinforce them and certainly not create new ones. Feedback from the frontline of digital of social media ghettoes springing up, and suppliers selling discrete smart products that create data silos in factories, is disconcerting. So what is to be done?

A quick look at digital innovators such as Netflix is salutary and shows a no-nonsense, if not brutal, philosophy in the pursuit of joined-up excellence. Their start-up culture retains an intolerance of platitudes and mission statements that perpetuate siloed thinking. Instead behaviour that relates to results and outcomes is encouraged and rewarded. Apocryphally, these included such mottos as:

No vacation policy (take as much as you want, as long as you’re doing a great job and covering your responsibilities).

“Outstanding” employees only–doing an “adequate” job leads to your getting a “generous severance package,” so the company can hire an A-player in your place.

“Freedom and responsibility” vs command-and-control: Good managers give their employees the right context in which to make decisions–and then the employees make the decisions.

Netflix is now a big enterprise, and presumably the sharp edges of some of this start-up culture have been smoothed. Nonetheless, success of these unconventional policies suggests that now is the time for the HR chief to step forward and play a star role in transforming culture if digital is to deliver on its promises.

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Helen Beckett

Author: Helen Beckett

Helen Beckett is the Community Manager of the Business Value Exchange. She has been a writer and editor for over 20 years and takes a particular interest in the challenges facing the CIO in today’s business climate.