Organisational silos exist in almost every medium to large organisation and they become the bane of organisational life if we don’t keep them in check. There is a bit of a Goldilocks effect with silos: differentiation between departments is useful, but there is a point where the downsides outweigh the benefits.
However if leaders are aware of when their teams are moving into silo territory they can take steps to avoid or rectify it.
Let’s start with the benefits of organisational departments. It encourages specialisation and expertise to develop, which is engaging for people as they develop mastery in a specific area and learn from others with those skills. There are also benefits associated with being able to clarify accountability to functions and departments. It makes outputs and performance easier to measure. Silos can give people within them a feeling of being part of a community with the corresponding feeling of belonging and identity.
However, when the gap between departments becomes too wide there is an organisational cost. Silos hinder communication, collaboration, and effective teamwork. Their impact can be felt in various ways, including poor communication, lack of trust, duplication of efforts, internal competition, and a focus on departmental/functional goals rather than overall organisational goals.
Silos result in decreased productivity, inefficiencies, missed opportunities and a lack of innovation. They hinder organisational agility by reducing the ability to respond quickly and effectively to changes in the business environment. The costs of a silo are often borne out by customers who receive poor service, or lower-quality products, and in time will take their business elsewhere.
Silos create disengagement across the divide due to frustrations, even though they may create engagement within the silo. Note that this is the reason your engagement survey won’t necessarily tell you if you have a silo problem, but your customers might.
Often by the time you experience any of the above the silo has become pretty established, it may just be considered to be part of the culture, the “way we do things”, with workarounds such as complex KPIs, reporting lines and processes. Silos almost always add to organisational complexity.
The goal is to increase horizontal cooperation. The goal is not to remove vertical specialisations, the goal is to cooperate across them.
There are different reasons that a silo occurs, at the heart of it is just people doing the best they can to achieve their perceived goals considering the context they feel they are in. Leaders can find the right solution to a silo problem once they know the reasons behind them.
Reasons that Silos Develop:
- Lack of Shared Purpose, Vision or Goals: when teams or departments do not have a clear understanding of the overall purpose, vision and goals of the organisation, they may prioritise their own objectives, resulting in silos.
- Lack of Communication: when teams do not have regular communication and information flow with each other and have no need to share information, it can create isolated pockets of knowledge and hinder collaboration.
- Hierarchical Structure: when decision-making is concentrated at higher levels, there is a risk of developing silos as the people who are closest to the problem are not the ones reaching out across the silo to cooperate, instead they have to (or choose to) push decisions upwards.
- Competition for Resources: limited resources, such as budget, time, staff, access, knowledge, information, or decision rights, can lead to competition among departments. This competition can create a “hoarding” mentality, where departments become protective of their resources, leading to silos and reduced cooperation.
- Abundance of Resources: conversely the opposite is also true, if resources are abundant then each team can achieve their objectives without cooperating with each other and silos can develop.
- Reward structures: If employees are rewarded (formally or informally) solely for their individual accomplishments rather than collaborative efforts, it can discourage cross-departmental cooperation. Rewards are not necessarily formal monetary rewards, it includes all types of recognition such as praise, promotions, access, benefits and privileges.
If you think you may have a silo problem then there are a few actions you can take to address it:
- Leadership role-modelling: leaders need to walk the talk and make sure they are working as a unified leadership team and not taking a silo mentality themselves. This is where creating a cohesive leadership team is essential. This involves building trust, fostering healthy conflict, ensuring commitment to common goals, fostering accountability, and focusing on collective results. If you have a silo problem…start here. Without a fully-aligned leadership team that thinks, makes decisions and acts with an organisational-first mindset it’s virtually impossible to address silos below (and if you do manage to address silos below without a cohesive leadership team then you just create a horizontal silo instead).
- Align around purpose and strategy: align all departments and individuals around a common purpose and strategy. When everyone understands and buys into the larger purpose of the organisation on an emotional level it helps break down barriers and encourages collaboration.
- Establish a whole of organisation view: open and transparent communication is crucial to help people understand what the other departments are doing, their context, challenges and needs. Leaders should continuously monitor whether they are helping or hindering organisation-wide information learning and sharing.
- Create shared goals and incentives: breaking down silos requires establishing shared goals and performance metrics, that transcend individual departments, promote collaboration and discourage siloed thinking. Shared goals are important, but so are rewards and recognition around the level of help and input each team is asked for and gives. Soft rewards, such as praise and thanks, can be just as important as an incentive as monetary rewards. It’s more visible to others and therefore often has further reach.
- Enable cross-silo decision-making: by moving decision-making to the place where the impact occurs leaders can encourage people to work together across a silo to generate the best solution. This generates a cross-silo understanding of the challenge and cross-silo ownership of the solution.
- Rotate roles: movement of people between teams gives them the experience of working on the other side of the silo. This can be done in a range of ways from project teams to more formal secondments and developmental role rotations. The increased understanding of people, and their context, across the silo can go a long way to breaking it down.
Reducing silos, by increasing horizontal cooperation, is ultimately achieved through organisation-wide purpose, culture and strategy. If these 3 aspects of organisational life are clear, reinforced by leadership and supported by simple, appropriate structures and ways of working then silos will be minimal.
However, without a clear purpose, culture and strategy, it will be left to individual departments to interpret or create their own. When this happens you have only one outcome: silos. Ultimately it comes down to the role of a leader: to consistently and clearly communicate, reinforce and align the organisation around purpose, culture and strategy through the leader’s mindset, intention, words and actions.
If you have silos that are impacting your organisation’s results then book a discovery call or contact me at Sarah Robertson Consulting.
