Breaking down silos

Many of us have worked for firms which appear to be more like a group of sole traders than a partnership; each partner ploughing their own furrow with their own dedicated team, isolated and remote from fellow partners and employees. While this approach can be of huge value to a firm, it can also be very damaging in equal measure. Management theorists refer to this as a silo mentality; problematically, as firms grow larger the problem of silos can become more acute.

Management theory identifies two types of silos; lonely and functional. The lonely silo exists where the focus is on getting something 'out of the door' rather than doing it well. This often happens in smaller firms. The functional silo arises in team based environments where all the effort goes into a particular client or departmental goal, to the exclusion of the goals of the firm as a whole.

Silos are often in place for very good reasons, such as regulatory necessity, specific projects and confidentiality. They can help with team building and create a healthy and competitive environment. However there are also highly damaging aspects to silos. Narrow self-interest, hoarding knowledge and expertise, duplication of effort, and departments wasting time competing with each other for the same resources and same work.

I remember a recent incident where a prospective new client was negotiating with two different people in the firm over fees, both of whom were unaware of each other. This was of course completely unethical by the client and a very good reason to refuse to have anything further to do with him. However it did emphasise the point that two closely linked parts of the firm were oblivious of each other's involvement with the same prospect, and that's certainly a cause for concern.

I have even seen unhealthy levels of rivalry developing where certain members of teams would barely talk to each other.

Many years ago I was part of
a merger in which the department
I worked in was parachuted into the newly merged firm's office. Management, for reasons best known to themselves, kept the two sets of staff separate from one another, but on the same floor. The result? No integration, an unhealthy level of suspicion and a very bad atmosphere.

So how can we retain the benefit of silos without suffering the side effects?

First, as with all corporate solutions, strong leadership is important. As I have mentioned previously in my columns, the leaders in any firm set the tone for the whole firm; for better or worse. Leaders need to have an open door policy and a transparent approach to business, in which communication and collaboration are encouraged. If they are seen to be integrated with other departmental leaders, then other partners and staff will follow that lead.

Inter departmental co-operation is very important and needs to be rewarded. If an employee brings in a decent client who is not on his patch, they would normally pass the client on to someone more suitable, who'll get the benefit of the billing on their ledger (possibly for many years) and the employee who brought the client in
may receive no credit. So why should they bother?

If that contribution is recognised however and, whisper it quietly, maybe even rewarded, then they would be far more incentivised to adopt a collegiate approach. That can only be of benefit to the firm. And how about this for an innovation; if someone brings in work to another department, their ‘reward’ should be increased by 50 per cent to reflect having been a good citizen.

There is also an essential need to clarify responsibilities. Everyone should be aware of their responsibilities within their department and within the firm. These responsibilities will always dovetail with each other.

Finally, if you want to create a sense of camaraderie, regular social events (and even retreats) can create mutual respect and encourage friendship between people. Ensure that these events are across the departments and as mentioned above, all senior staff must attend as it is their example that will set the tone.

If everyone in the firm is working toward a common goal, they will all ultimately benefit from achieving that goal. So why not stop being a sole trader and start turning your firm into a true partnership of professionals? 

Geraint Jones is a tax partner at Berg Kaprow Lewis

He writes the regular in-practice article on doing business for Private Client Adviser