The mystery of silos

Silos are poison for agility. Every modern business leader has felt their sting: information trapped in departments, teams working at cross-purposes, and innovation stifled by invisible walls. Like the towering structures that lend them their name, organizational silos continue to dot the landscape of our 21st-century work environment, long after they’ve served their purpose. But if silos are so destructive, why do they exist at all?

The surprising truth is that organizational silos were not born out of inefficiency – they were designed for reliability and scalability. To understand their roots, we have to go back to the early 20th century and the work of Frederick Taylor.

Taylor’s groundbreaking “time and motion” studies revolutionized work. By breaking down complex tasks into their smallest components, he discovered ways to eliminate waste and maximize productivity. His methods reshaped industries, laying the foundation for supply chain management as we know it today. At the time, these insights were transformative: Work could finally be standardized, optimized and scaled to unprecedented levels.

The success of Taylor’s model created an organizational DNA that favored specialization. Departments, business models, technologies and even skills evolved into whole ecosystems that resembled the grand containers of the industrial age, each dedicated to one specific commodity – grain, salt, cement. In a stable environment, these systems produced flawless results. Each function played its role, creating efficient, predictable outcomes.

But stability is no longer the rule. It’s the exception.

From efficiency to complexity

As globalization took hold and consumer expectations shifted, cracks began to appear in the silo model. Thirty to forty years ago, seller’s markets gave way to buyer’s markets. Customers no longer wanted “one-size-fits-all” products; they wanted options. They wanted choice. 

Think of the automotive industry. Buyers stopped purchasing cars off the lot; they wanted customized vehicles, with features and finishes tailored to their preferences. Digitization made this possible, enabling assembly lines to produce dozens of product variants on a single line. For customers, this was a dream. For supply chain managers, it was a challenge.

The integration of planning, scheduling and execution became critical for corporate success. Industries that once thrived on predictability faced the challenge of volatility. And in this new environment, silos became barriers. They slowed down response times, limited collaboration and left companies vulnerable to disruption.

Breaking down the walls

Businesses that thrive today are the ones that have learned to evolve beyond silos. They recognize that agility – not just efficiency – is the currency of the modern economy. To achieve it, companies must build capabilities that cut across traditional boundaries.

The key ingredients? Orchestration, end-to-end visibility and cross-functional skills.

And perhaps the most powerful change agent of all: (agentic) AI. Artificial intelligence can dismantle silos by providing unified data insights, automating repetitive tasks and enabling smarter, faster decisions. With AI, organizations can shift from siloed execution to orchestrated agility.

The future beyond silos

Silos were the backbone of the industrial age. They delivered consistency, reliability and scale. But the world has changed. Markets are volatile, customer expectations are fluid, and disruptions – from global pandemics to everyday surprises – can appear overnight.

In this landscape, clinging to organizational silos is not just inefficient; it’s risky. The companies that will succeed are those that reimagine their structures for flexibility, collaboration and resilience.

The mystery of silos is that they were never designed to be villains. They were born from a desire for order and productivity. But in today’s fast-moving world, survival depends on breaking down their walls – or reshaping them for the future.

It’s time to trade silos for synergy. And with AI as a catalyst, the path forward is clear: orchestrate, connect and adapt.