Business strategy: Working in silos

By Anders Björklund

Business strategy: Working in silos

A company is structured and organised to divide responsibilities into divisions, departments, and teams to enable daily operations. But sometimes it doesn't. The same structure can lead to efforts being duplicated, hinder innovation, and jeopardise objectives and KPIs. So, perhaps it's time to knock them down. In this article, I present my view on overcoming operational silos. 

 

The structure and organisation of a company are helpful until it's not. Then, organisational silos might be necessary–but not the problems they sometimes create. 

Silos are necessary. They provide a structure that allows companies to work. Every company is divided into e.g. divisions, departments, or groups, such as sales, technology, and finance. This structure enables expertise and specialists in different areas. In a company, silos tend to be where information, focus, and control flow up and down. 

Organisational silos also cause problems–that same structure prevents the flow of information, focus, and control outward. And for a company to work efficiently, decisions need to be made across silos.

There are three aspects to the organisational silos barrier:

  • Non-aligned priorities
  • Lack of information flow
  • Lack of coordinated decision making across silos

Silos occur naturally because of the way organisations are structured. Each part of your company reports to a manager responsible only for that part of your company. But no components are genuinely independent. Each piece relies on others to perform its function, and the company performs well only when each of these parts or units work closely together.

Work closely together

This kind of company structure is necessary because it keeps accountability and responsibility in the silo. It fosters a sense of independence and pride of ownership, which is essential. Decision-maker's task is to look at the whole organisation; a department manager's task and responsibility are to look deeply into their area. 

The problem is that it creates a tower vision. Managers tend to only look up and down within their silo but never look around or across. So all they see and tend to think about is their silo. 

These managers don't know what is happening elsewhere in the company or how their actions impact other silos and areas. They primarily act in the interest of their silo.

Hopefully, this makes perfect sense. When you are one of these managers, your priorities centre on your part. You most likely do not even think about other parts of the organisation. And when you make decisions that may affect different silos, you are trained to think about your silo first.

Just because a course of action makes sense for silo managers, it doesn't mean that the action is the best way to do things, or even best for the company. 

From a company and business point of view, silos need to work together, but that's seldom the case. Problems arise when the silos do not share the same information, vision, priorities, knowledge, and when the managers work independently, entrepreneurially–in short, people are operating with tower vision.

You see the organisational silo at work all the time. Every manager is part of a silo and experiences frustration when their priorities aren't aligned with someone else's in a different department. 

Sadly, customers see and experience organisational silo barriers at work. 

Breaking the organisational silos barrier

To break the organisational silos, problems that silos cause must be eliminated. Unfortunately, managers and decision-makers sometimes are tempted to think that removing silos is the ultimate answer. Still, the structure that silos bring is fundamental in creating accountability and responsibility within the organisation. 

Managers know what they are responsible for

Usually, cooperation, collaboration, and communication are the keys to working across silos. Of course, those are components that any successful working relationship has, but they are must-haves to break the organisational silos.

Share knowledge among silos.

You can break the organisational silos barrier when control, focus, and knowledge is shared among at least two silos. The result is that you lose the tower vision and can look at things from new perspectives.

Breaking this barrier is not about proving who is right or wrong. It's perfectly understandable why silo managers have different prioritisations and believe that what they do is best for the company when they are doing the best thing for their silo. 

Communication or collaboration

When managers have the authority and responsibility, it is only natural to choose to exercise them. However, when decisions are made to reprioritise, communication or collaboration has allowed a shift of perspective.

By human nature, people feel forced to do the best they can within their box. Own a part of, or a function in a company naturally brings forth a manager's entrepreneurial spirit, and you usually don't become head of a silo without being competitive. Sometimes managers rationalise lack of cooperation as 'I'm in charge of my area, and I need to do the best possible job I can.'

Typically, silo heads are very focused, highly competitive individuals. An excellent approach to removing barriers is highlighting where cooperation is not happening and pointing out the consequences of those gaps. Then, when moving forward, measures must be put in place to ensure that decisions aren't made in isolation.

Four questions to ask yourself. 

These questions could help you understand your company's organisational silos–and move beyond them: 

  • What priorities do my department or I have that aren't aligned with other departments?
  • What information does my department have that could be useful to other departments?
  • What information or assistance do I need from another silo that I'm not getting?
  • What could other departments do to realise that their needs are to be prioritised?

In what areas would be increasing collaboration and be giving up some autonomy be more beneficial for your company than maintaining your individuality?

Download the benefits of a silo-free company and how to break silos down.

Download the presentation now!

Anders Björklund
Founder, CEO & Strategist since 2001. Anders provides thoughts and reflections about what and how to think about onlinification and digitalisation in B2B. Asks a lot of questions, and knows what to do with the answers.
Keep me updated!
Subscribe