In the late 1980s, the leadership of J.P. Morgan faced a growing problem. The bank was expanding rapidly into complex financial products. Different trading desks were taking risks, but no one could see the bank’s total exposure in one place. Each team understood its own risk, tracked its own positions, and reported in its own language. It was like the HQ of a logistics company receiving warehouse reports in different units such as kilograms, pounds, gross weight, and net weight making it impossible to reconcile.
The bank’s leadership lacked a clear firm-wide picture. The CEO, Dennis Weatherstone, made a simple but unprecedented request. Every day at exactly 4:15 p.m., 15 minutes after the New York Stock Exchange closed, he wanted a single report on his desk that showed the bank’s total risk exposure, across all businesses, all markets, and all geographies. This report would allow him to understand the bank’s overnight risk and address any outlier threats before the markets opened the next morning.
This became known as the “4:15 Report.” At first, producing such a report seemed impossible. Risk was measured differently across teams. Systems were fragmented. Data was scattered. But Weatherstone insisted. His decision forced teams to develop sophisticated risk measurement capabilities and more importantly, it forced them to make those capabilities visible and shared across the organization. Quantitative teams began building new models and created a standardized way to measure risk called Value at Risk (VaR). These tools were documented, shared, and understood across business units. Risk management was no longer hidden inside individual teams. It became a visible organizational capability, a unified strategic strength. This led to a service called ‘RiskMetrics’ which proved to be so successful that it was spun off as a separate business in 1998.
The lesson is clear: the 4:15 Report did more than improve risk reporting. It dismantled silos.
Working in silos (the word comes from tall grain-storing towers on farms) can make sense when deep expertise is needed, regulatory boundaries exist, and there is a need to prevent conflicts of interest. But in large organizations like banks and technology firms, working in silos can have several downsides:
- Information gaps. Critical risks go unnoticed. Product teams are blind to customer feedback. Sales doesn’t appreciate the company’s full strengths. Strategy fails to translate into action.
- Duplicated effort. Teams develop similar tools and overlapping initiatives wasting time, money and effort.
- Misaligned incentives. Without shared KPIs, functions like sales, risk, and operations compete with each other.
- Slower pace of innovation. Knowledge is hoarded, limiting collaboration between engineering, data, and project teams.
- Lower employee engagement. An ‘us vs. them’ culture disconnects employees from the broader mission of the company.
- Higher enterprise risk. Fragmented oversight can obscure cumulative risk exposure (see above example).
- Inconsistent customer experience. Disconnected onboarding, servicing and billing create friction for customers.
When our work stays within only one function, identity becomes tribal, perspective narrows and our ability to connect dots shrinks. Breaking down silos does not happen organically; it requires deliberate leadership action. Leaders can:
- Define shared outcomes. Establish enterprise-level goals and KPIs that require cross-functional collaboration. Tie a portion of performance evaluation to enterprise contribution.
- Make work visible. Cross-team demos, shared dashboards, knowledge sharing sessions, and team spotlights in townhalls, can all help people know what others are doing.
- Ritualize collaboration. Cross-function working groups and problem-solving sessions where each function explains their role and impact make working across functions a default, not a special event.
- Create cross-functional career paths. Job rotations, short-term project secondments will increase empathy. Leadership programs that require cross-functional exposure will send a strong message that thinking and working in silos can only take you so far.
- Reward outstanding examples of collaboration. Recognize individuals and teams that deliver together.
- Change the language of leadership. Encourage big-picture thinking. Ask: who else is impacted? What is the downstream effect? Who should be involved early? Avoid jargon that excludes other teams.
By breaking down silos, we can create a shared awareness, promote trust and unlock productivity within our teams. This becomes especially critical during transformation programs, when we have to align towards a common goal, overcoming inertia and resistance. In a hyper-competitive world, breaking down silos may just be what is needed to give us a competitive edge.
What examples of breaking down silos have you seen? What worked well in your company? I’d love to hear from you.