The End of Information Silos

VISPAICO Journal, Issue 026

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In 1834, a collection of thirty-nine separate German states, each with its own currency, its own tariffs, and its own customs posts stationed along borders with its neighbours, agreed to something that sounds modest and turned out to be transformative: they would stop taxing goods that crossed the lines between them. The Zollverein, as this customs union came to be known, did not unify a single government, army, or diplomatic service. Prussia remained Prussia. Bavaria remained Bavaria. A traveller crossing from one state into another still crossed a genuine political border, complete with its own sovereign, its own laws, its own separate existence on any map of the period.

What changed, almost immediately, was everything that actually mattered to a merchant, a manufacturer, or a banker trying to move goods, capital, and information across what remained, formally, a patchwork of independent states. Trade barriers came down. Weights and measures were standardised. A single economic conversation began happening across what the map still insisted were dozens of separate countries. For nearly four decades, an economically unified Germany existed, functioning as one integrated system, long before a politically unified Germany existed at all. When the German Empire was finally declared in 1871, the political map was, in a very real sense, simply catching up to an economic reality that had already been operating, quietly and effectively, for a generation.

This sequence, the functional reality arriving first, the formal structure lagging years or decades behind it, is worth taking seriously as more than a historical curiosity, because it describes almost exactly what happens inside a growing company, and almost nobody notices it happening at the time.

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What Actually Disappears First

Departments, examined honestly, are considerably more like the pre-unification German states than most executives assume. They have formal borders, budget lines, reporting structures, a box on the org chart with a name and a head count. They have, in the fullest administrative sense, a genuine separate existence, the same way Bavaria genuinely existed as a separate sovereign state well after the Zollverein had already dissolved the practical significance of its economic border with its neighbours.

What tends to happen, quietly and well before anyone in leadership formally notices, is that the actual flow of information, judgment, and coordinated decision-making crosses these boundaries constantly, in exactly the way goods and capital crossed German state borders decades before the political map acknowledged it. A product team and a customer success team, technically separate departments with separate budgets and separate leadership, may already be exchanging information so continuously and so essentially that the formal boundary between them exists only on paper, a customs post nobody actually stops at anymore, staffed out of habit rather than necessity. The department, in the sense that actually matters, has already stopped being a meaningfully separate entity. It simply hasn't been told yet, because nobody has bothered to update the map.

This is worth stating plainly, because it inverts the assumption most reorganisation efforts quietly rely on. Leadership tends to imagine that intellectual integration follows organisational restructuring, that a company reorganises its formal structure first, and the actual behaviour of people inside it gradually adjusts to match the new chart. The Zollverein suggests, and close observation of most functioning companies confirms, that the sequence generally runs the other way. The intellectual integration happens first, informally, driven by whatever the actual work genuinely requires. The formal structure, slower and more politically encumbered, catches up years later, if it catches up at all.

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Why the Formal Structure Always Lags

It is worth understanding why this lag exists, because it is not a failure of attentiveness on the part of any particular leadership team. It reflects a genuine asymmetry between how easily informal behaviour can adapt and how much friction surrounds any formal change to structure.

An employee facing a genuine cross-functional problem does not wait for a reorganisation before reaching out to the colleague who actually has the relevant information, regardless of which department that colleague technically sits in. This kind of informal adaptation costs almost nothing, a message, a conversation, a habit that develops naturally because the alternative, respecting a boundary that no longer serves the actual work, would simply be slower and more frustrating for everyone involved. Formal restructuring, by contrast, carries genuine costs and genuine political weight. Redrawing a department's boundaries means renegotiating budgets, redefining reporting lines, and very often disturbing the careers and identities of people who have built their professional standing around the department as it currently, formally, exists. Prussia did not simply dissolve itself the moment the Zollverein made its economic borders functionally irrelevant, for reasons that had everything to do with sovereignty, identity, and political power, and almost nothing to do with the actual movement of goods and capital.

Companies face a milder version of exactly this same resistance. A department that has become, in practice, thoroughly entangled with another rarely gets formally merged quickly, not because anyone disputes that the entanglement exists, but because formal mergers disturb established territory in ways that informal collaboration never has to.

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The Cost of Maintaining a Border Nobody Needs

This lag is not free, and it is worth being precise about what it actually costs, because the cost rarely shows up as a single dramatic failure. It shows up the way the lingering German customs posts showed up in the years before 1871: as friction, absorbed quietly, by people going through motions that no longer serve any real purpose. A merchant filling out paperwork at a border crossing that no longer imposed any actual tariff was not being harmed dramatically by any single transaction. He was simply wasting time, repeatedly, on a formality that had outlived the function it once served.

Companies accumulate an almost identical kind of waste wherever a formal departmental boundary persists well past the point of genuine intellectual separation. A budget approval process that requires sign-off from two department heads who, in practice, already coordinate on nearly everything relevant, adds a delay that serves no purpose except honouring a distinction the actual work has already made obsolete. A reporting structure that routes information through a formal hierarchy, when the people who actually need that information have long since found a faster, informal way to exchange it directly, simply duplicates effort that the organisation is already, unofficially, handling more efficiently on its own. None of this looks dramatic from the inside. It looks like ordinary bureaucratic friction, the modern equivalent of a customs post nobody particularly minds stopping at, because nobody has ever seriously questioned why it's still there.

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What Leaders Should Actually Be Watching For

The practical implication of all this is a genuine shift in what leadership should be paying attention to, and it is a considerably more useful diagnostic than simply asking whether the org chart still reflects reality. The org chart, almost by definition, will always eventually reflect a version of reality that has already changed underneath it, in the same way a political map of 1850s Germany would have technically been accurate while completely failing to describe how goods, capital, and information were actually moving across the region.

The more useful question is not whether departments remain formally separate, which they very often will for good administrative reasons, but whether the actual daily flow of judgment and information between them has already made that formal separation functionally irrelevant. This is a genuinely different question, and it requires a genuinely different kind of attention, not a periodic review of the org chart, but an honest look at where information and decisions are actually flowing, regardless of what the formal structure claims should be happening. A department that still exists on paper but has, in practice, become thoroughly entangled with its neighbours has already crossed the threshold that matters. The formal merger, if and when it eventually happens, will not be a bold transformation. It will simply be paperwork, catching up to a decision the organisation already made informally, months or years earlier.

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Formalising What Has Already Happened

There is a genuine leadership discipline in recognising this lag and acting on it deliberately, rather than simply waiting for the formal structure to catch up on its own schedule, the way German political unification waited nearly four decades after the economic reality that justified it. Leaders who watch closely for where intellectual boundaries have already dissolved, and who are willing to formalise that dissolution before it becomes an obvious, overdue correction, spare their organisations years of exactly the kind of quiet, accumulated friction that persisted along German customs posts long after those posts had stopped serving any genuine economic function.

This requires a specific kind of honesty that most reorganisation efforts lack: the willingness to ask not what the org chart currently says, but what the organisation, left to its own informal devices, has already decided is true. By the time a formal restructuring becomes politically comfortable enough to propose, the actual intellectual work of integration has very often already been finished, quietly, by the people doing the work, long before anyone with the authority to redraw the map noticed that the old borders had stopped meaning very much at all.

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The Map That Was Already Out of Date

Nobody living through the decades of the Zollverein experienced German unification as a single dramatic event, however it may appear from the vantage point of a history book. They experienced it as a long, gradual dissolution of borders that had already stopped mattering economically, followed eventually by a political announcement that simply confirmed what merchants, bankers, and manufacturers had already been operating on for a generation.

Companies undergo the same quiet dissolution constantly, department by department, usually well before anyone in a position to update the formal structure notices that the old boundaries have already stopped describing how the actual work gets done. The organisations that pay close attention to this, that treat the informal, lived reality of how information actually flows as the real map, and the formal org chart as the document perpetually struggling to catch up to it, will spend considerably less time maintaining borders nobody actually needs, and considerably more time simply doing the work the borders were only ever meant to organise in the first place.