Most organizations are naturally vertically aligned, meaning that most companies are organized by functional area, line of business, or some other division of labor. These vertical silos allow the organization to focus specialists on specific business areas.
As a general example, accountants usually work in Finance, database administrators work in IT, marketers work in Marketing, and salespeople work in Sales. And as an insurance industry line of business example, specialists in car insurance work in Auto, specialists in health insurance work in Health, and specialists in life insurance work in Life.
Of course, this division of labor makes sense since most of the daily operations of the organization must be carried out by people who have been trained in a very specific type of business activity.
However, when taken to its extremes, this vertical orientation creates organizational silos that lose sight of the fact that the sum of silos is one horizontal enterprise. According to enterprise mathematics, in an organization with five functional silos, 1 + 1 + 1 + 1 + 1 = 1 (not 5).
Just like we can’t see the forest through the trees, we can’t see the enterprise through the silos.
This state of affairs presents a complex challenge for enterprise-wide initiatives, such as data quality, master data management, or data governance, which require a cross-functional alignment, where the group identities of vertical silos re-identify with the super-group identity of the horizontal enterprise.
These initiatives try to encourage horizontal collaboration across the organization’s vertical silos, which will require some vertical sacrifices for the horizontal greater good. This means striking a balance between allowing verticals to continue their unique contributions to the enterprise’s success, and requiring they also dedicate some of their resources (money, time, people) to horizontal efforts, which, in the short-term, may be somewhat disruptive to their vertical efforts.
In other words, the enterprise-wide initiatives require the organizational silos to find ways to be horizontally vertical.
Have you found ways to be horizontally vertical?
Please share your experiences with enterprise-wide initiatives at your organization.
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