Food for Thought V7: Bridging Silos

Silos allow management and teams to focus, however, they also create barriers to collaboration and the flow of much needed information. In this interview by McKinsey with Paolo Cederle, CEO of Milan-based UniCredit Business Integrated Solutions, Paolo outlines the business model UniCredit designed to move away from siloed thinking and provides some key insights into how they overcame many of the challenges the new organisational structure presented. Some of those insights included:

1. Matrix organisation guided via a governance layer. The organisational structure is now defined by a matrix of business lines and banking and infrastructure service lines referred to as the “factory layer”. Overlaying the matrix is a governance layer aimed at driving the integration of silos.

2. Disruptive cultural change. They recognised the culture change required was particularly disruptive as the new organisation required business and support people to work much more closely. People with often very different skill sets and ways of doing things needed to meet and find a new common ground.

3. Communication through technology. As with any change, communication is key. UniCredit used the latest in technology to drive the cultural shift. This included manager blogs, webinars, PC-enabled video conferencing and the use of narrowcast videos.

4. Management support. They did not sit back and find out which managers rose to the top, they designed the governance layer to specifically support them to both understand their new role and to assist them to drive the transformation.

While I have long upheld that a good risk management framework breaks down silos, I fully recognise that breaking down these ingrained structures is a complex task and this interview highlights some key steps to take to manage the transition.