Fear, Loathing, and Organizational Health

some thoughts on fiefdoms and silos

I’ve written quite a bit here about organizational health - largely about the things leaders should do to create a healthy organization. But recently, I’ve been thinking a lot about this challenge from a different angle - the signs of an unhealthy organization.

The more I ponder it, the more I think that silos and fiefdoms within an organization are key indicators of organizational dysfunction.

The Story that Hit Too Close to Home

Way back in 2004, I read The Fiefdom Syndrome by Bob Herbold. Bob had been a COO at Microsoft (back when I had no idea what a COO did), but he told a lot of stories in the book that were obviously about the late 1990s Microsoft. I re-read it a few months ago, and this time it had a completely different impact. The difference is that in 2004, I didn’t know what organizational health was. Today, it’s something I study a lot. When Herbold talks about fiefdoms and silos - and why they exist, it comes down to actively avoiding the things leaders can do to build healthy organizations.

This quote from the book jacket should have found it’s way into a blog post long before today.

The problem begins when individuals, groups, or divisions - out of fear - seek to make themselves vital to their organizations and, unconsciously or sometimes deliberately, try to protect their turf and gain as much control over what goes on.

I didn’t realize how much this was going on at msft in 2004 as much as I do now on reflection. In 2005, I was pursuing msft-wide licenses for something that would have helped break down silos and promote learning. It was a good deal - in hindsight, it was a fantastic deal…but it was shut down by someone defending their turf. A GM in another division blocked the deal because “his team may build the features of this product some day”. He was scared, and he was defending his turf. To date - twenty years later, that product still doesn’t have those promised features (and still is one of Microsoft’s worst products).

The Advantage (again)

I just did a blog search, fearing that I’ve talked about The Advantage by Patrick Lencioni thirty times in the last year, but apparently this is only the third time I’ve referred to it. It’s Lencioni’s only work of non-fiction, and it’s packed full of the science and data behind many of his business fiction stories.

Lencioni and Herbold are looking at the same problem from different sides. Herbold talks about silos and fiefdoms and how they emerge (along with solutions), while Lencioni talks about how to avoid getting into that problem at all. What’s interesting to me after having both of these books on my shelves for so many years is how aligned they are.

Herbold’s solution appears late in the book and underscores the need for communication and clarity. As simple as that sounds, my experience is that healthy organizations are ultra clear on what their leadership is doing, why they’re doing it, and how they plan to do it. In the Bill Gates days of Microsoft, he’d send company-wide memos outlining the company priorities and the reasons behind them. Conversely, “The Balmer Years” at Microsoft contained very little communication - and the growth of many more silos and fiefdoms.

While Herbold takes 22 chapters to stress the importance of communication Lencioni leads directly with clarity and communication as the fundamentals of organizational health. This graphic is on the cover of many editions of the book.

From my view, this is the preventative cure for organizational silos.

First, your leadership team need to work together on shared goals. In other books, Lencioni talks about Team One or First Team - with the idea that the the working relationship between the members of the leadership team is more important than the teams they manage. If the members of the leadership team don’t like each other, refuse to work with each other, or have competing priorities, silos and fiefdoms will grow - and thrive.

Second, establish clarity on what the organization does, why they do it, what’s most important, and the culture you want to have. What I’ve seen time and time again is that when this clarity doesn’t exist - teams will do whatever they want - and they will behave however they want. Failure here, also leads to silos.

Next, communicate the organizational clarity until it sticks. Talk about it a lot - highlight where it’s working, and call out where it’s not. More often than not, organizations will put some goals and values on a slide somewhere, then are surprised when people in the org don’t have clarity. Without clarity, people will do whatever they want, and yet again, slip into silos.

Finally, reinforce the clarity by infusing it into every system you can. If your company has values they care about, they should (IMO) be part of the review and reward system. Good company values will come up unforced in meetings and discussions. Clear priorities should be part of the decision making process organization-wide.

If everybody understands why their work is important, and share goals with those around them, it’s very difficult to build a silo.

Truth Bomb

This article from McKinsey calls out just how important Organizational Health is.

But now we see new, longitudinal evidence that redoubles our conviction. Companies that work on their health, we’ve found, not only achieve measurable improvements in their organizational well-being but demonstrate tangible performance gains in as little as 6 to 12 months. This holds true for companies across sectors and regions, as well as in contexts ranging from turnarounds to good-to-great initiatives.

and then goes on to discover that not only can you improve organizational health, but that it’s not that hard.

Almost all companies perform better if they improve their health. Around 80 percent of companies that took concrete actions on health saw an improvement, with a median six-point increase in their overall health

In this research, they find something not too surprising if you’ve read this far in the article

Have a clear vision and health improves. Have. A. Clear. Vision. and. Health. Will. Improve.

Fear

On the surface it looks simple - so why don’t more organizations do it? One answer (as Herbold calls out) is fear. Creating a good vision and getting people aligned requires iteration and transparency. A lot of leaders are so afraid of being wrong that they’d rather not try at all. The best leaders I’ve known - those who have built healthy organizations were all proud of being wrong, and happy to take input from anyone who would give it.

Herbold highlights how fear (fear of loss of control, relevance, or job security) can drive individuals and teams to isolate themselves, withhold information, and resist collaboration. This fear then motivates leaders and departments to create and defend their own "fiefdoms," where they can maintain control over their domain without interference from others.

The solution, yet again, is clarity…

Why?

The evidence around the value and positive impact of organizational health is profound. But we still have silos (notably, this article from HBR earlier this year on How to Lead Across a Siloed Organization). We know that healthy organizations get more done, and employees are happier. We also know that the steps to improve organizational health have been reached via independent research.

Yet knowing all of this, many organizations remain content with dysfunction and silos. And finally after all of this research, I get to the point where I just don’t know why. Part of me wonders if the majority of leaders are either too set in their ways to think there’s a better way, or if it’s just pure intellectual laziness.

It’s funny, because I’ve seen “executive mandates” for a million things that don’t actually need or benefit from being mandated (except as a power play), but culture is the absolute one-and-only thing I know of in an organization that has to come from the top.

I asked ChatGPT why more organizations don’t actively try to improve health. It gave me a long answer that boiled down to laziness and fear, so maybe I’m onto something.

I guess I’m off to do some more research.

-A 1:0