5 October 2015

In both business and sport, specialisation can increase efficiency – and blind spots

There is value in strategic looseness.

Seeking to explain why his company was in free fall in 2006, a senior Sony employee offered a practical answer: “I have 35 Sony devices at home. I have 35 battery chargers. That’s all you need to know.”

The problem was easy to describe but difficult to solve. The company was fatally fragmented, split up into specialised units that had no incentive to collaborate. Sony’s decline is an example of the dark side of the division of labour. While specialisation often increases efficiency, it can also create blind spots. Where Sony’s autonomous departments were at war, Apple benefited from Steve Jobs’s broad and unified vision.

This is the theme of Gillian Tett’s new book, The Silo Effect. Silos – derived from siros, the ancient Greek word for “corn pit” – are the tall towers used to store grain on farms. “Silo” has also become a metaphor for describing a problem within business and government: a system or department that operates in isolation from others.

Tett describes three central risks of silos: separate teams wasting resources by fighting each other; a preoccupation with classification and categorisation rather than value; and overspecialisation, leading to tunnel vision and information bottlenecks. I recognised all three as problems in professional sport, which, in the era of ultra-professionalism, is increasingly vulnerable to siloisation.

As a county cricketer, I once asked the coach why he had called the whole squad back for pre-season training as early as 1 March, including players who had organised warm-weather match practice in Australia and South Africa. What was so good, I wondered, about spending seven uninterrupted weeks among depressing indoor nets housed in a gloomy hall above a swimming pool located just off a suburban roundabout? It transpired that the decision had originated from a deal with freelance fitness coaches, who understandably wanted as many days of work as possible. The tail was wagging the dog. This is a classic silo problem: a pushy department, sensing the absence of a coherent overview, forcing arrangements that suit it to the detriment of the whole.

Over-classification is another hazard. The questions “What is it?” and, worse still, “What is he?” carry implicit dangers. Managers become preoccupied with definitions, causing blindness about qualities that are hard to pin down. When I worked in newspapers, I was surprised to observe a silo effect caused by categorising content. Because budgets flowed through rival departments, journalists had to define themselves. Did you write about business, or sport, or current affairs, or foreign news? Interesting articles, however, are often hard to classify. What about journalism that explored parallels between different spheres, developing surprising analogies and connections?

I had experienced a similar bias in sport. In the 1990s, one-day cricket teams became obsessed with defining batting “roles”. Is he a power player, who blasts the ball to the boundary, or is he a touch player, who nurdles ones and twos? Ironically, the definitive pairing of the era, Australia’s Adam Gilchrist and Mark Waugh, blurred the two “roles”. Gilchrist was the more explosive hitter, yet Waugh, with his sublime touch and technique, quite often got a faster start to his innings.

Instead of getting hitched to a prescriptive “game plan”, what could be better than two brilliant players performing naturally? There is value in strategic looseness.

There are two points here. First, the available pegs may not fit the holes. Second, conventional wisdom may have the holes in the wrong place anyway. Basketball provides a classic example. A basketball team is permitted five players on the court at once. Conventionally, they have been sorted into five positions: point guard, shooting guard, small forward, power forward and centre. In 2012, however, a Stanford University undergraduate, Muthu Alagappan, remapped the positions of NBA players according to how the game was actually played. He discovered that the five established positions not only oversimplified the game but also wrongly grouped very different types of players. Consequently, coaches were substituting one “small forward” for another “small forward” but accidentally ending up with an entirely different team formation. Alagappan’s matrix of 13 alternative and distinct positions led several NBA teams to employ him as a consultant.

The “five-positions” type of category error explains why England lost to Wales in the Rugby World Cup last month. With Jonathan Joseph (a creative player classified as a “centre”) ruled out by injury, England needed a replacement. They settled on the highly physical pairing of Sam Burgess and Brad Barritt. Both are technically “centres” but neither brings Joseph’s qualities to the pitch. Instead of replacing missing creativity, England’s selections further reduced their creativity.

During the match, lacking flair and sparkle, England failed to convert their massive dominance into scoring opportunities. Stuck with a misleading set of classifications, England had asked the wrong question. Instead of “Which player also labelled as a centre shall we pick to replace Joseph?” England should have asked themselves, “In the absence of Joseph, do we have enough ingenuity on the pitch to score tries?” The answer was, “No.”

The first book I would recommend to any sports coach or manager is Nassim Nicholas Taleb’s Fooled by Randomness. It is hard to coach effectively without understanding the challenges and complexity of causation. The Silo Effect should also be on the shortlist. The two books scarcely mention sport, and that furnishes the underlying theme. The ghettos of saturation-level expertise need to be balanced constantly by the generalist’s wider perspective.