Why do departmental silos form – the origins of functional culture

What is a functional culture?

A functional culture is a distinct set of values, behaviors, and working norms shared by professionals in a specific department (e.g., Finance, Engineering, Sales). These subcultures often override organizational culture, creating silos that hinder cross-functional collaboration in today’s dynamic business environment, understanding and managing functional cultures is crucial for fostering effective cross-functional collaboration and decision-making.

Functional cultures are the distinct set of beliefs, behaviors, and assumptions specific to a particular professional specialty, such as Finance, Marketing, Engineering, or Legal.

If you have ever wondered why sales struggles to work with finance or engineering can conflict with marketing then functional culture may be part of the problem.

Where do functional cultural differences come from?

Functional cultures have deep historical roots. For instance, the accountancy profession emerged during the industrial revolution, while the legal profession in Europe evolved from Roman Law principles.

These professions have well-established languages, traditions, and principles that attract individuals who want to work on specific topics and in particular ways.

Sometimes these differences are reinforced by family tradition. Various international studies have found that between 10 and 20% of doctors, for example, have at least one parent who was a doctor.

Some other careers have even higher levels of heritability – farmers (50%), military, tradespeople, entrepreneurs, politicians and athletes often follow in their “family careers”.

How does functional culture have an impact on identity and belonging?

Individuals develop a strong sense of identity within their functional cultures, often seeing the world through that functional lens. These inherent biases and priorities can lead to clashes when collaborating across functions. For instance, Legal might prioritize risk mitigation, while R&D prioritizes innovation.

What are the functional cultural challenges and benefits of cross-functional collaboration?

Collaborating across functional differences can be as challenging as working with people from different national cultures.

A shared functional culture provides common professional norms, goals, ethics, and a sense of identity, but it can also create silos and misunderstandings. However, these differences can be beneficial if managed effectively. For example, R&D’s desire for innovation can sometimes cause tensions with Finance’s need for stringent control and risk mitigation. Understanding these differences can lead to better collaboration, communication, and decision-making.

What tools and strategies can we use to manage functional cultural differences?

Several tools and strategies can help us manage functional differences. We use the Functional Culture Abacus tool to help teams discuss differences in five key areas: power and hierarchy, uncertainty management, universalism vs. particularism, long vs. short-term orientation, and communication styles.

By understanding where colleagues stand on these dimensions, teams can create a gap analysis and develop strategies to bridge these gaps.

How do functional cultures differ in practice

Here are some simple examples from our “functional culture abacus exercise on our cross-cultural teams training.

Frequently Asked Questions about Functional Cultures

As cross-functional working becomes the norm in collaboration, recognizing, respecting and manging he differences between functional cultures, can help us leverage these differences to create more innovative and effective teams.

If you’d like to find out more about our training programme “Managing functional cultural differences” please get in touch

Frequently Asked Questions about Functional Cultures

What is the difference between organizational culture and functional culture?

Organizational culture is the “umbrella” of shared company values, while functional culture is the local “sub-climate” driven by professional training and daily tasks.

Why do departmental silos form?

Silos form because functional cultures reinforce distinct identities (“us vs. them”), different time horizons, and conflicting goals—e.g., Sales prioritizes speed while Legal prioritizes risk mitigation.)

How do you manage cross-functional conflict?

By using tools like the Functional Culture Abacus to visualize differences in power, time orientation, and communication styles and training people to manage these differences