Fiefdoms and Silos: What to Do About Them
With time, organizations seem to get into the rut of being overstaffed, bureaucratic, consensus-oriented and fragmented. As a result of the fragmentation, the many individual units and divisions strive to be a independent as possible and typically become impenetrable fiefdoms and the whole organization becomes very slow to respond to anything.
This presentation begins with a description of how things had gotten so complicated and fragmented at Microsoft in the early to mid 1990′s that it was almost impossible to close the books at the end of the quarter and produce the necessary financial numbers for Wall Street. We then cover an example from Procter and Gamble and how Sam Walton himself had to confront the company in 1988 and demand that their bureaucratic sales practices be dismantled. More recently, when Alcatel and Lucent merged in 2006, the new leadership allowed massive duplications and consensus management to bring them near the brink of bankruptcy. We review in detail how they got into this problem, and most importantly, how a strong new leader was inserted and quickly cleaned up the mess and how he did it.
We then step back and discuss the three human behaviors that cause these kinds of bureaucratic practices, complexity and fiefdoms to emerge. We then review the steps that can be executed to avoid these kinds of problem, achieve industry-leading efficiency and agility, while also increasing the innovative output of the organization. This presentation can be adapted to be meaningful to just about any industry or geography. Also, the messages are very relevant to non‐profits, government agencies, and educational institutions.