Silo Mentality

Gillian Tett's column in the October 9 Financial Times deals with an old problem in so many companies, and not just in the financial services industry: silo mentalities. That is, narrow tunnel vision that afflicts managers, especially when their incentive systems push them to maximize their own organizations' results (even to create personal fiefdoms run for their own benefit), sometimes to the detriment of the company as a whole.

Also, as Tett notes, silo mentality has been at the root of many regulatory failures of late. Regulatory agencies have their own narrow concerns and political interests (as do the members of their staffs), and often fail (or refuse) to see the big picture. Result: big problems slip between the cracks.

During my days in the high net worth marketing department at Merrill Lynch, we had ongoing fights with various constituencies in the firm afflicted by their own silo mentalities. Gaining cooperation to present holistic wealth management solutions to our richest and most influential clients often was an uphill battle, as counter-intuitive as that might seem at first blush.

Members of a corporation's financial staffs are in a unique position to battle silo mentality, tunnel vision or tribalism (other synonyms used by Tett), wherever it appears. You technically have a special fiduciary responsibility to act in the best interests of all shareholders. If you are in a controller's group at a sufficiently high or central level of the corporation, you'll probably be assembling and analyzing various metrics from across the enterprise, offering you the opportunity to see where silos are working at cross-purposes. Don't waste that chance.