Is silo mentality affecting your business? How to recognize and what to do about it.

Silo mentality and all its attendant baggage is bad news for business. In a survey 73% of all employees in companies with more than 1.000 employees reported silo mentality within their organization (rotize, 2015). But also smaller companies reported medium levels of this organizational issue. It splits organizations into isolated units that fail to communicate, fail to reach shared goals and decreases productivity. Removing such organizational barriers, and preferably preventing them from forming in the first place, should be high on the agenda of every leadership team and departmental manager. This article will explore the reasons why silos form, the effects they can have, and most importantly, how best to deal with them.

 

What is Silo Mentality? What does it really mean in your organization?

 

Silo mentaility in corporates

 

Silo mentality is one of the most common organizational barriers, affecting industries as diverse as high tech and administrative services. Silo mentality is a particular mindset that develops because several groups or specialist teams within an organization do not want or have not had the chance to share information or knowledge with other teams or departments. Working in isolation, teams become focused on their individual goals and ignore the importance of the shared nature of an organization’s strategic goals. Failure to communicate relevant information to other teams or departments can have devastating effects on the entire organization, such as unidentified risks and missed opportunities for innovation.

 

What are the key drivers of silo mentality in business?

Six factors that can quickly breed organizational barriers

Silos develop within all kinds of organizations for all kinds of reasons and no particular industry is immune to them. They can even exist between organizations.

The development of silos and silo thinking is usually driven by one of more of the following situations that can occur either by accident or design:

  1. Leadership behavior
  2. Specialization
  3. Geography
  4. Psychology of networking – maintaining relationships with many others
  5. Fast paced environments – need for quick decisions
  6. High rates of staff turnover

 

Drivers of silo mentality

By far the greatest driver of silo thinking is the behavior of leadership and leadership teams. In fact, a leadership team can be a silo itself. Traditionally these teams are made up of managers from key departments across the organization. But the information discussed and decisions made behind closed doors is not often communicated to the broader organizational members. There is no trickling down of strategic information. If those at the top of the organization fail to communicate the company strategy to its members, the effect for those below is the feeling of working in a vacuum. No one is sure what the goal is or how to achieve it. The lack of critical information in turn causes a lack of unity. This can fracture the subtle cultural environment that is crucial to the idea of true teamwork. Of equal importance in the development of silo thinking is recruitment. The need for specialization within an organization necessarily creates departments filled with people with very similar skills, interests and accountabilities. Choosing the right people is not only a matter of meeting a particular skill set, but also being able to contribute to the organizational culture in a positive way. Maintaining the cultural status quo, and preferably enhancing it, should be high on the list of candidate ‘must haves’.

Silos can also develop naturally due to the geographical location of various departments across the organization. Companies with offices in different countries, and even different locations in the same country or city, are prone to silo development. This is a natural extension of business expansion. Networking is a skill that not everyone has. It requires a certain kind of personality, usually an extroverted one. Those who are not so outgoing have tough limitations to overcome if they want to reach out successfully to others, even within their own organizations. Training in this valuable skill is rarely provided in house to the detriment of the business culture and communications.

Many organizations operate within a highly competitive market. Whether competitive advantage is won or lost often depends on the speed with which an organization can make decisions. In such fast paced environments, managers may have little time to follow traditional communication and consultation processes. However, this situation favors the development of business silos. In such fast paced environments, staff turnover can also be quite high. Good employees are sometimes headhunted by competing businesses and those left behind can feel lost and frustrated in the absence of strong leadership. The silo can become a form of protection for disillusioned staff members, but it only worsens the sense of dissatisfaction and disengagement they feel.

No particular industry is immune to the development of silos, but some fare worse than others. Organizations with very clearly defined departments suffer the most. These include corporations with a manufacturing arm, universities, financial service institutions such as banks, Telco’s and start-ups. Such organizations need to have strong processes in place that can deal effectively with interdepartmental communication and project management.

 

The effects of silo thinking – for better or worse

How silo mentality becomes entrenched

Patrick Lencioni puts it best: “Silos devastate organizations. They waste resources, kill productivity, push good people out the door, and jeopardize the achievement of goals.” This represents the simple truths about what can occur in an organization that neglects to counter the development of silos and subsequent silo thinking that accompanies them.

A Waste of Resources or “it’s not my job!”

There is an undeniable need for specialization within organizations, from sales and marketing to operations and logistics, finance, technology, legal and administration. Each department is populated by people who have specialized knowledge within their own area of expertise. But according to specialists in the elimination of silo mentality, Perception Dynamics Ltd, “even groups that exhibit an abundance of individual brilliance, but who suffer from silo mentality, can exhibit collective stupidity.”

Collective stupidity means that team members have the mindset that it’s not their responsibility to act on the information at their disposal. ‘It’s not my job’ thinking wastes the resources available to an organization because critical information is not shared with the right people. Inevitably, all team members have cross-functional skills and organizations should actively cultivate cross-skilling and information sharing to avoid wasting those precious hidden resources. Otherwise, the opportunity for innovation and creative collaboration is totally lost.

The death of productivity or “why should I care?”

The inherent feeling that no one really knows what they’re supposed to be doing is a precursor to the death of productivity. The leadership team has ultimate responsibility for the dissemination of information regarding the organization’s strategy. If they are not on the same page or neglect to pass on critical information about decisions made in executive meetings, the flow down through the organization is fragmented and creates a culture of resistance. Staff may begin to feel that top-down mandated changes are ill-informed and react adversely to what they see as ‘change for change sake’. Protection of individuals within team silos and the avoidance of blame creates further insularity. The ‘us and them’ outlook this produces, along with a feeling of a lack of direction, inevitably leads to a negative attitude towards those seen as in control – “If they don’t care, why should I?” This thinking reinforces the development of silos and creates further organizational barriers to collaboration and efficiency. Any information that does seep through is dismissed as irrelevant to those within the departmental silo, who tend to carry on with their own brand of business as usual.

Increased staff turnover or “I’m out of here!”

The broader effect of silos and silo mentality on staff members should not be underestimated. High levels of frustration often result from a lack of communication between departments. The resulting ‘us and them’ mentality can destroy the prevailing organizational culture quickly and with devastating consequences for the team. Disgruntled staff members soon lose interest in holding up their end of the workplace bargain and may begin to look elsewhere for job satisfaction. When high staff turnover swamps an organization any new staff members feel nervous, isolated and lacking in clear direction. The potential for demotivation and disengagement snowballs.

Failure to achieve goals or “We’re dead in the water!”

Rotize performance increaseThis comes back, again, to leadership and the way they manage and direct their teams. Any factors that damage and diminish employee engagement threaten cohesiveness and affect the ultimate customer experience. An organization that cannot effectively and efficiently service existing customers, as well as attract new ones, is doomed to failure. Front line employees hold the power in this transaction and a negative customer experience can reverberate across the marketplace like wildfire. The vision of an effective leadership team and their ability to communicate that vision is the glue an organization needs to counter the development of business silos. Siloed thinking at the executive level is tantamount to organizational suicide. A leadership team that cannot provide a unified front and articulate a common goal cannot hope to achieve unification on the shop floor. Knowing the company goal and the strategy that is in place to realize that goal is critical information for every member of the organization. Without it, everyone is just thrashing around in mid-stream, out of their depth.

 

Breaking down the silos – Solutions for reducing silo mentality in your organization

Breaking down silos should be a high priority for the leadership of any organization. Their effects are broad and highly counterproductive. And quite often they stem from conflicts within the leadership team itself. Silo mentality has very negative and widespread effects on an organization. However, there are several effective methods available for breaking down the silos.

  1. Use Rotize SAAS
  2. Change Leadership Behavior
  3. Set up a shared ‘Innovation Agenda
  4. Introduce Project Visibility/Meetings
  5. Establish Social events

 

Connecting people with the Rotize lunch lottery (SaaS)

Far and away, the best means of reducing the effects of silos and inhibiting their development is to increase communication between the teams that populate them. This is difficult to achieve if employees don’t know each other or have at least some awareness of the functions of different departments to their own. In larger organizations this can be especially problematic and can seem an insurmountable issue. Rotize offers a simple yet very effective solution.

Rotize lunch lotteryA team of former top management consultants based in Frankfurt am Main, Germany, identified the widespread nature of business silos and their common detrimental effects on modern organizations. So they developed a software tool that would alleviate the problem by institutionalizing communication between departments and employees. Based on the assumption that people who know each other have a far greater chance of working together collaboratively, Rotize is an online-access tool that, quite simply, randomly selects pairs of employees and invites them to a lunch meeting. Team members enter their availability into an online dashboard and the software matches up pairs of employees and sends the meeting invite directly to their calendars.

There is no set agenda for this meeting. Employees are encouraged to discuss any topic, whether personal or business-related. The effect of this exchange of ideas and opinions is to raise interdepartmental awareness and team spirit and performance. It easily creates “organizational shortcuts”, establishes new relationships and maintains existing ones. In addition, the Rotize lunch lottery tool can also be used to build and manage client relationships by connecting the external client’s staff with relevant managers from within the organization.

Change leadership behavior

Since leadership behavior is quite often at the heart of the problem, the process of breaking down silos, by necessity, begins at the top level of the organization’s structure. Leadership bears the responsibility for inciting a unified front, for communicating the company vision and ensuring that it is shared across the organization. In other words, they need to ‘walk the talk’ on the same path. This unified front that comes from the top down has several critical effects on those at the lower levels of the organization. Firstly, it encourages trust, trust that those at the top know what they’re doing. Staff need to believe in the goal and the strategy that leadership envisions. After all, if they don’t believe in the goal, why should they follow them?

Equally importantly, a unified leadership front breaks down the silos by generating a mindset of ‘our organization’ rather than ‘my department’. Employees who feel that they are all on the same page, all working towards a common goal are empowered, and consequently, more like to participate in cross-functional collaboration in order to achieve that goal.

Set up an innovation agenda

Closely tied to leadership behavior is innovation, which is critical to any organization that hopes to survive and grow. But while change is often forced upon organizations, it must be embraced to be successful. Resistance to change is indicative of silo thinking – “This is how we do things around here.” Leadership that values and inspires change can achieve amazing things, not least of which, is the breakdown of workplace silos. In an article for the Harvard Business Review, Govindrajan points out that “an innovation agenda creates necessity, inspires people to work together.” Employees should be encouraged to contribute their ideas for change and improvement and also rewarded for them. Motivation is greatly increased by the provision of incentives. Leaders who can identify the key factors that motivate their employees’ are more likely to succeed at getting buy-in across their organization.

Introduce project visibility/meetings

Meetings can be the bane of an organization. Too often they are time-consuming, unproductive and ineffective at reaching a consensus because the right people are not in the room. Team members can become disillusioned and disengaged by excessive meetings that fail to achieve any real, tangible progress. Because of this, projects can trigger silo mentality and silo behavior. To break down the silos all projects should be highly visible across the organization. Projects often cross departmental boundaries and the successful completion of milestones may require decisions by more than one departmental manager. Project meetings must involve all stakeholders so they can make decisions without delay once a consensus has been reached.

Communication of these discussions and decisions to the broader organization raises visibility across teams and increases buy-in. This can be easily managed by the use of regularly-updated white boards placed strategically in the workplace. All those involved, and even those that aren’t, can then follow their progress. Consistency is imperative in providing such updates. There should only be one version of the project status circulating among staff.

Establish social events

Bringing people together is the key to breaking down silos in the workplace, whether that be in an organizational setting e.g. via Rotize or a social event. However, providing a more informal environment for interdepartmental mingling allows people who wouldn’t normally socialize to get to know each other. Going to dinner in small groups, staff Christmas parties, or organized social events are perfect. As we’ve seen before, the inclination to work together as a team is greater amongst those who know each other or have a shared interest in achieving a goal.

Regardless of which counter-measure you apply, it is best to tackle silo mentality within your organization as early as possible, because the longer silos exist, the more difficult they are to be counteracted.

 

REFERENCES

Gleeson, B 2013 The Silo Mentality: How to Break Down the Barriers http://www.forbes.com/sites/brentgleeson/2013/10/02/the-silo-mentality-how-to-break-down-the-barriers/#2715e4857a0b406390ce5f3e

Lencioni, P 2006 Silos, Politics and Turf Wars Wiley New York

Perception Dynamics Ltd 2016 How to Remove Silo Mentality www.perceptiondynamics.info/silo-mentality/how-to-remove-silo-mentality/

Govindrajan, V 2011 I The First Two Steps Toward Breaking Down Silos in Your Organization https://hbr.org/2011/08/the-first-two-steps-toward-breaking-down-silos/

Pictures: freepik.com, author http://www.freepik.com/pressfoto