The three infamous silos are Business, Development and Operations. They come in different shapes and colours, but the lack of alignment is typically very similar. Let’s look at a typical scenario:
What we call “Business” in this context are the internal departments such as Marketing and Product Management. Business looks at the market and understands that the customers have changed and that the company needs to become more innovative and reduce the time to market for new or enhanced products and services. Developing a product for years and years is no longer how things work today. You need to react fast, and bring out your product even faster, or someone else will make your customer happy instead. This is the reason why Business is slowly losing its patience with Development, the second silo.
Development is responsible for developing new products or services. They too want to react quickly to new needs and bring cool new products to market. But they understand that there are limitations. In the case of IT, for example, new systems need to be integrated in an existing environment, which oft en means they need to interact with 20-year-old legacy systems that were never meant for the job. Th ere are concurring projects that fight for the same resources or want to implement conflicting changes to the same system. Finally, many internal processes set up to ensure high code quality make it hard to react quickly and release even quicker. This leads to higher cost and unwanted delays. Instead of innovating, Development spends time and resources on legacy systems that only hinder innovation. Their efficiency is measured on requirements, which the market does not need.
Once a product has been launched in the market, someone has to maintain it and be there for the customer. This is what Operations does. This typically means that Operations wants a stable and performing product – one that makes the customer happy. If there is a problem with the product, they want to solve it fast and cost effectively, but they don’t always receive the necessary information from Development. Operations works under constant cost pressure, so when a new product introduces new issues, this can cause a lot of frustration. They are at the front line – unsatisfied customers will reach out to Operations, not to the organisation responsible for the issue. This can lead to frictions between Operations and Development and trigger the blame game for low quality levels and unhappy customers.
Silos are never healthy for an organisation, but there is more to lose than just the ability to innovate. One example is what happens when Business is so unhappy with their IT department and the cost it generates that the company starts buying IT services externally, be it at big companies or small, innovative startups. Core strategic services are no longer produced in-house because this seems too expensive. The company loses key capabilities and becomes dependent on others, which may or may not act in its best interest.
On the other hand, we often meet situations where the Development department has the ability and willingness to be more flexible and innovative, due to being constantly in touch with new technologies and methodologies, and the Business departments are lacking the understanding of the impact of these new approaches on the company and the market.
Apart from risking short-sighted strategic decisions, it is simply not healthy for a company to be at constant war with itself. And the reasons for the conflicts are as simple to describe as they are difficult to address: the silos do not see each other as part of a bigger process. Each one of them tries to improve itself and optimise its own cost structure, while looking at other silos as external forces to which they can adapt, but which cannot be changed. Challenges are addressed locally, never on a broader level. The full value chain is never looked at, which finally leads to sub-optimal services and products for the customer.