We all know that the organizational “silos” undercut both efficiency and effectiveness. The silos—and the myopic self-interest such entities promote—act to sub-optimize decision-making time after time after time. It’s no longer about the larger organizational mission, and it becomes (at some level) about the mission of the smaller entity. Individuals in the smaller entity think primarily of their own interests, and not the interests of the larger organization. And so the larger strategic objectives suffer because poor decisions are made. Strategic objectives are not attained because the organization, as a whole, is not internally aligned. In at least some respects, the organization may actually be working at cross-purposes.

We all know this to be true. We’ve all experienced this situation. It’s likely the most common work environment in mid-size and larger organizations. Indeed, finding a large organization that was not divided into “silos” would be a rare and pleasant surprise.

Yet despite our best efforts to “smash the silos” (as one consultancy puts it), the “rice bowls” and “fiefdoms” and similar organizational entities seem to persist.

Perhaps it’s just human nature.

Perhaps we should expect ambitious folks to “build their empires” and defend their ‘turf’ from those who would seek to integrate (or annex, if you prefer) disparate organizational entities into one. Perhaps we should simply accept the fact that Type A individuals will put their own self-interest ahead of the interests of the entire organization.

Still ….

It’s tough to be an effective consultant when the hiring organization cannot operate effectively, because of competing organizational silos.

You hire PwC or KPMG or Deloitte or EY, or Accenture or FTI, and you are paying top-dollar for expertise and experience—both of which inform strategic and tactical recommendations. If you hire Apogee Consulting, Inc., you pay significantly less, but you are still paying for the same thing. The same concept holds true for any consultant or professional you may hire—including attorneys.

If you decide to hire outside advisors, you pretty much know you are going to be paying some significant dollars.

So why would you let your ability to implement those expensive recommendations be undercut by your own organization?

Of course you wouldn’t do that in a rational work environment; but, as we’ve already noted, irrational structures and self-dealing individuals persist, despite management’s efforts to eradicate them. (And that assumes management knows about them; they are often hidden from sight in backoffice eddies.)

Too often—far too often—we’ve experienced bizarre and irrational organizational behavior that undercut the strategy and tactics for dealing with Government compliance issues. Big companies, mid-size companies, even small companies: all exhibit a tendency to let competition between internal organizational entities stop effective implementation of the recommended courses of action. And this has been true even after top leadership has agreed to implement the recommendations.

In 1999, a multi-billion dollar corporation paid a consultancy about $500,000 for an in-depth analysis of its contracting and billing functions. The analysis took about six weeks and involved a joint effort with internal counsel and other employees, who were seconded to the analysis team to make sure the consultants got it right. The corporation needed to get it right, because the Department of Justice was already involved. For that $500,000 investment, plus the additional investment of internal time and resources, the corporation received 18 very detailed recommendations. The consultancy was thanked for its efforts; the bills were paid. And then … the corporation actually implemented only one of the 18 recommendations. The other 17 recommendations were ignored.

Why? Why would a corporation facing significant sanctions make those investments and then not make the necessary changes to create the “return on investment” that they had told themselves they wanted?

Many of those other 17 recommendations involved making changes to the ways in which aspects of the corporation operated. They threatened fiefdoms and rice bowls and turf. From one perspective, it was easier to ignore them than to think about work flow and reorganizations and employee transfers. From another perspective, it was easier to ignore them than to expend the political capital necessary to make the changes.

Regardless of the reason, the corporation’s shareholders spent half a million dollars, and received very little return on their investment.

And this is but one of the many examples we could write about.

We could write about the multi-billion defense contractor that paid $500,000 for a new approach to risk management, one that would be designed to reduce line stoppages that stemmed from vendor delivery delays. They got what they paid for, only to see the innovative approach killed by “sector management” because it was that entity who “owned” risk management, organizationally speaking. Innovation threatened their monopolistic position. And so the contractor paid its bills and got nothing in return.

We could write about the mid-size E&C contractor who let its corporate accounting function hold-off the hiring of external consultants to perform an independent analysis of its indirect cost allocation structure (since there was no reason to change what had been successfully working for so long). Yeah, that worked for them—right up to the time DCAA pulled the accounting system adequacy because the company couldn’t document, trace, or support its indirect cost allocations.

So here’s the thing: we consultants do not like to see our time and efforts wasted by your organizational inefficiencies. Despite the popular stereotype, most every consultant we know gets great satisfaction from seeing their recommendations successfully implemented and seeing your problems resolved. We do not simply want to take your money: we very much want to help you solve your problems and improve your operations. Our success is measured by your success, not by the bills you pay.

When you pay our bills but don’t take our recommendations, when your problems go unresolved because you don’t take our advice, then that disappoints us more than you can imagine.

And when you listen to us and agree to implement the actions that we both agree are the right actions to take, and then you don’t implement the actions because your internal organizational “silos” are not aligned and, indeed, engaged in active warfare with the goal of scuttling the organization’s strategic objectives because they threaten somebody’s little fiefdom … well, that upsets us more than you can possibly imagine.

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Why did we write this blog article? Why did this topic come to the forefront of our consciousness today?

Oh, no particular reason.

Why do you ask?