Tear down the silos? Try structure and communication first! - InstaHost Solutions

Mention the words Silo mentality or Silos to a senior management team and the overwhelming response is that “they must be broken down”, that “they are innovation killers” and cause “communication issues through the organisations”

The term “Silo” was created to indicate a similarity between grain silos that separate one type of grain from another and the segregated parts of a company. In a company suffering from Silo syndrome, each business unit or function interacts primarily within its own “Silo” rather than with other groups across the company.  The main problem perceived problem with  Silos is the duplication of cost and effort, working at cross purposes, lack of synergy and little knowledge transfer or economies of scale. The largest problem, however, is a lack of alignment with the overall company strategy.

Human nature forces people to want to do the best they can within their own ‘sandbox’ at the expense of everybody else. ‘Owning’ a function or a part of a business naturally brings forth a manager’s entrepreneurial spirit, and you don’t get to be head of a silo without being competitive. Managers rationalise their lack of cooperation as “I’ve been given this area to run as I see fit  … “

Undoubtedly Silos represent situations that can be destructive, they can encase entire groups of employees into s limited vision environment  and can remain steadfast in its semi-broken processes even in the face of change.  Thinking of silos in the negative context is the norm, we have been taught that they are a problem, “Silo working” became management buzzwords and are often deployed in incorrect contects in irrelevant conversations, all of which lead us to ask…. are they really always bad?

Lets face it, Silo working is sometimes inevitable.  All organisations have some ‘basic element’ needs – they have to sustain certain expertise, organisations need to sustain and develop their expertise in order to remain strategically competitive in the markets they compete in and hold a responsibility to remain efficient in their work and functionality. Obviously to do so, actually requires concerted focus in these areas of  expertise, to do this, experts need to be allowed to work with like-minded experts to grow the all-round knowledge, and implement real processes to increase efficiencies.  This behaviour needs supporting and protecting  – this would be termed a healthy Silo.

A healthy Silo is porous; allowing experts to converse in the language they need to be the most efficient and to grow expertise and development even further. The concentration can therefore be upon the work being done and its impact to the experiences (internal, customer, external), not (as in a non healthy collaborative environment) on trying to help everyone understand what they are doing, what the issues are and then prove their expertise at all times.

Many “healthy Silo” organisations are proficient and achieve strong growth due to having a nurturing, expert environment in which to focus on internal, client, and external experiences. The key to integrating these Silos into a singular organisation is to have experts ( or Scrum Masters if certain methodologies are being used) in place to ‘translate’ the differing Silo languages and create connections from one to another (IT to marketing to finance…etc.) AND (most importantly) to translate back into the silos for realignment.  The simple truth is that if an employee is concentrating a large amount of energy on the internal politics of the organisation, then they aren’t concentrating much energy on their client or the impact of their expertise.

However, the “healthy Silo”  system has to be talked about, it needs a clear structure, a clear reporting hierarchy, and its connections understood for the Silo to be healthy and the strategic experiences understood. It’s about expertise value to the organisation and having the “collaborative porosity” in the structure to get information and ideas flowing.

Top 5  attributes of Healthy Silos

1. A Silo will usually manifest a hard-to-replace knowledge and skills base that is also locally of high value. This follows from its ability to maintain a high-influence core position.
2. A Silo will optimise its internal functioning to most efficiently add value to the most critical and high value embedding processes, by minimizing non-core aspects of its functioning. This is the internal analog of a company focusing on core competencies within an industry. It is able to do this because its knowledge base is in high demand.
3. It will develop an internal language — this is perhaps the signature feature. This follows from the fact that a Silos services are in high demand, which permits it to accept or prioritise requests that it can satisfy with the least amount of lateral learning, and with customer processes that are the most willing to adapt to its demands in order to obtain services. This is actually efficient. The internal economics dictate that the partner currently adding less value in a value-chain link, must do more of the work to enable the transaction. Taking on translation tasks (either to natural language or other Silo languages) is not a good use of a silo’s time under high demand conditions. Other parts of the organisation must take on these tasks.
4. As long as the underlying business model maintains an ecosystem that generates high, critical demand, silos persist robustly. Small or large changes to individual embedding processes do not affect them because they respond to an internal supply-limited market of many processes. No single-process improvement champion can make a compelling argument for internal change to a Silo without understanding the complete demand profile for the silo from all it’s client processes.
5. Silos are the atomic units that remain structurally intact during mergers, acquisitions and outsourcing deals.

Silos are the manifestation of the competitive advantage of a business model and constitute it’s DNA. Their inertia along many unimportant vectors is what makes for extraordinary responsiveness and efficiency along a few critical vectors. Their  internal languages are highly optimised to express and work with the knowledge they utilise.  In an organisation which has healthy Silos and clear structure,  it keeps accountability and responsibility in the respective Silo. It also fosters a sense of independence and pride of ownership, which is a good thing. Senior management’s role is to look broadly at the organisation; a department manager’s is to look deeply into his or her own area and ensure this is performing as required.  

Some of the common criticisms of Silo Mentalities include:

1. “This is MY department” Syndrome – where managers and their staff become resistant to input or feedback from those outside of their department.
2. “That’s not my job” mindset – a myopic focus on one’s job description at the exclusion of any broader participation or expectations.
3. “Information Isolation” – the unintentional isolating of information and data so that critical elements are left out of the flow of knowledge in a business.

However, tearing down healthy silos in a less than structured organisation will undoubtedly result in a slightly different set of problems related to the originals.

1.  Without a department manager championing their department, departments seen as less skilled or less important to the senior management team will be at the mercy multiple interventions, inevitably this department can become the “scapegoat” for issues inputs and interference, resulting in the team members feeling disenfranchised and becoming unproductive.
2.  Certain departments will become the “do-ers” or “mules”, picking  up the tasks that other departments should pick up but will pass onto the “mule” department wherever possible – banal, boring and potentially difficult tasks (or those with potentially difficult outcomes) will be passed over.  This results in mistrust among managers and staff alike, allowing some managers to “empire build”. All behaviours which will result, eventually, in organisational difficulties.
3.  Building on from #2 is the the intentional isolating of information and data, when there is mistrust in organisations – data is a powerful currency, especially to”empire building” members of management.  Data will be manipulated to highlight certain departments, regardless of the reality.  Immediately moving back to #1

In reality, very few managers are–or should be–in favour of cross functional teamwork for its own sake. They’re in favour of teams or silos because they’re conscientious about competitive advantages their own teams give them, and certainly there are things you can only be done well through individual teams.  So Silo working only really becomes an issue when the senior managers are not able to work both in a Silo’d and collaborative environment. And when transparent communication is poor, on average, less than 50 percent of employees say they understand their firm’s strategy, the really perverse part is, the closer you get to the customer, in the teams who have daily client interaction…the percentage decreases even more. It’s a basic issue. It is really tough for people to execute something they don’t really understand. In the absence of clear communication and information, individual workers or departments can’t be expected to act in tandem with other departments. The Senior Management Team must over-communicate – all of them – consistently across all teams. Typically the amount of consistent and transparent communications which is required to get employees to embrace the message is vastly underestimated.

In reality, healthy Silos lead to a productive and innovation organisation, all that’s needed is a clear Scrum or Agile management process and methodology and a clear hierarchical team structure.  What some people call Silos – others call cross functional scrum teams!