“You cannot look in a new direction by looking harder in the same direction.” – Edward de Bono
Dr. Edward de Bono boldly asserted over the years that the biggest problem humans face is not the climate crisis but a failure to think in diverse ways, a skill that can be taught to anyone. He coined the term “lateral thinking” to encourage ways of thinking beyond the traditional logical/linear (i.e., vertical) thinking characteristic of siloed functional departments in organizations (think sales, accounting, human resources, IT, and so forth).
This problem is not new, nor have thought leaders been silent in sounding the alarm. We’ve been trapped in this dysfunctional cycle of being stuck standing still in our silos for decades.
The pioneer of business process re-engineering, Dr. Michael Hammer, shared this same view and devoted his professional career to pushing organizations to adopt cross-functional, process-centered thinking. He referred to functional silos in organizations as “functional castles, little fiefdoms with high walls and moats around them.” Employees of the typical organization today still perform their jobs in isolation from employees in other departments, blind to the “big picture” of their organizations. Metrics to reward employees are still mainly set at siloed levels, encouraging employees to reach silo-level goals at the expense of enterprise-level goals. In large organizations, employees in one department may never meet or even see employees in other departments. They are often unaware of how their roles fit into the larger goals and vision of the organization.
I’m no exception to succumbing to the siloed mindset. As an Information Systems professor for over a decade, I taught Enterprise Resource Planning (ERP) courses to undergraduate and graduate students using a textbook that referred to lateral thinking as “thinking sideways.” The idea was to promote cross-functional, process-oriented thinking to enable digital transformation with ERP systems. Still, I recall in my early years teaching ERP asking faculty colleagues if I should drop the lessons on lateral thinking and change management to spend more time covering the ERP software assignments and activities. I failed to see the value of lateral thinking lessons in a foundational ERP course. I thought, “Aren’t these concepts better taught by Management department faculty anyway?” Eventually, I understood that students could not truly grasp the value of ERP systems and digital transformations without engaging with the cross-functional nature of most business processes in organizations—in other words, learning to switch between vertical and lateral thinking to have a holistic view of how organizations fulfill their goals, mission, and vision. It’s not enough to see the trees; employees must also see the forest.
Still, organizations struggle to evolve beyond hierarchical structures with specialized functional departments. Not only are these models often not efficient—they are also not effective, and they can greatly impede successful digital transformations (or any kind of transformation).
There are too many examples of the negative consequences stemming from siloed thinking to cover in this article, but here are a few examples to illustrate the gravity of this problem.
So how do organizations break free from the rigid norms of functional silos to ensure higher success in weathering not only digital transformations but any disruption? How do organizations become resilient to the inevitable turbulence they will face in the future? Here are some suggestions to promote lateral thinking in organizations.
Once your organization emboldens a culture of lateral thinking, it will naturally create and discover solutions that work best to not only survive but thrive in the long run.
If you are looking to strategize an upcoming transformation or are looking at selecting an ERP system, we would love to give you some insights. Feel free to reach out to me here with any questions you may have firstname.lastname@example.org
Be sure to download the newly released 2023 Digital Transformation Report to garner additional industry insight and project best practices. https://www.thirdstage-consulting.com/reports/2023-digital-transformation-r
Davenport, T. H., & Westerman, G. (2018). Why so many high-profile digital transformations fail. Harvard Business Review, 9, 15.
Hasham, S., Joshi, S., & Mikkelsen, D. (2019). Financial crime and fraud in the age of cybersecurity. McKinsey & Company, (October), 1-11.
Hernandez, J. S., & Varkey, P. (2008). Vertical versus lateral thinking. Physician Executive, 34(3), 26-28.
Christina Serrano’s Bio:
Christina has a Ph.D. in Business Administration with a concentration in Management Information Systems from the University of Georgia. For over 10 years, she taught ERP fundamentals to undergraduate and graduate students at the University of Arkansas and Colorado State University. Christina is passionate about researching, teaching, and learning about topics concerning human behavior and technology. She applies a human-centric lens to help people and organizations overcome the various growing pains inherent in transformations.