Silos - The Silent Company Killers

If you’ve ever taken a cross-country road trip through any stretch of farmland, chances are you’ve seen them. Silos. They are used to store grain or any other bulk farm material. Or, more recently, if you’re familiar with the ever-popular HGTV series, “Fixer Upper”, by Chip and Joanna Gaines, the term “silo” might mean something entirely different. But I digress.

The “silo”, I wish to discuss today is a business term, one that has been around for over 30 years, and if found within a company, can utterly devastate it. More specifically, the presence of a “silo mentality” is often the biggest organizational barrier any business will face. So what is it? The Business Dictionary explains that this sort of mindset is present when "certain departments or sectors do not wish to share information with others in the same company. This type of mentality will reduce efficiency in the overall operation, reduce morale, and may contribute to the demise of a productive company culture."

The term “silo” refers to a similarity between the previously-mentioned 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 interacts primarily within its own “silo” rather than freely within other groups across the company. Do you ever see kids claiming their “sandbox” on a playground and not letting anyone else near it? See the similarities?

The damage silos can cause are far-reaching, namely, decreased social capital, disorder in the work process leading to low productivity, decreased adaptability, duplication of cost and effort, lack of synergy, and probably the largest issue is a lack of alignment with the overall company strategy.

Patrick Lencioni, business management author, said: “Silos devastate organizations. They waste resources, kill productivity, push good people out the door, and jeopardize the achievement of goals.”

This sort of organizational segregation is typically found in larger companies, but can, however, also be present in smaller ones. In a 2015 Rotize survey, 73% of all employees in companies with more than 1000 employees reported silo mentality within their organization. Simply setting up a company into the needed departments (marketing, IT, sales, customer support, etc.) makes silos very natural and easy to develop. It isn’t so much the presence of these groups that is the productivity poison, as it is the presence of the mentality.

So, how do you know if your company has it? Sometimes it’s more of a feeling you have among co-workers, but other times it is what is said. Here’s a short list of signs that there could be the presence of silo mentality within your company:

  1. Frequent use of the words “them” and “us”
  2. People say “well that’s not my/our job”
  3. You have to wait, and then chase, for information from other business units (or, other business units have to wait and chase for information from yours)
  4. A consistent breach of organizational standards within a whole business unit
  5. A lack of respect between business units (Source: Simon Stapleton)

Once you’ve established that silos exist in your company, what can be done about it? Evidence has shown that silo thinking is generated and trickles down mainly from leadership behavior. Sadly, even a leadership team itself, can be it’s own silo. From leadership teams, silo mentality is not usually intentional, but rather the product of insufficient communication or unhealthy competition. So, managers, CEO’s, owners, you bear the responsibility, so listen up! Although there are numerous ways to establish unity, I will mention only a few to get you on the right road.

Leadership Unity

Leaders, across every department or group in the company, need to display the same goals and purposes to the employees in their various groups, communicating the same company vision across the entire organization. Establish that goal and communicate it to every employee in the company. Having a common goal is key to breaking down the silos within any company.

In the same vein, having a common adversity (or challenge for the company to work toward) helps unite employees across every group, despite their responsibility within the organization. Communicate clearly what the common challenge and the vision of the company are and dedicate yourself to them in all that is said and done throughout the day.

Ventilation

Grain silos are not airtight. Each is equipped with a ventilation system to keep grain fresh and from spoiling. The silos purpose is to keep the grain together and should one break, well, it could be disastrous. Likewise, should the organizational silos be destroyed completely, the results would be similar. The organization could become complacent and projects could eventually fall apart completely, so, the goal isn’t to destroy silos, but to eliminate the problems they cause.

To “ventilate” within your organization, it requires creating a transparent, sharing environment, one where ideas and information flow freely between groups and levels of leadership. To bridge the gap between leadership levels you must eliminate formalities, meaning, eliminate the need for communication to be passed through various channels and levels of management. The newest hire should feel free to communicate freely with the CEO of the organization. Breaking the invisible barriers will allow the organization to flow and move toward the common goal.

You and your team can and will accomplish so much more if you have healthy communication, alignment and transparency throughout the organization. Eliminating the silo mentality starts at the top and trickles throughout the organization. Healthy leadership is required to set the right tone in an organization and eliminate silo mentality.

Have you ever watched a rowing race? Each “silo” or group within an organization must move symbiotically, much like each of the rowers in the boat. The call captain at the head of the boat, or the company’s leadership, guides each crew member as one unit, propelling them toward the finish line. Should one crew member decide to withhold their efforts or adopt a “not my job” silo mentality, the entire team loses. So, eliminate the silo barriers, row in sync, and I’ll see you at the finish line!

Tell us: Are silos an issue in your organization? What unifying strategies have been successful?

Written by Mike Williams

I am a serial entrepreneur with more than 20 years of business experience. My goal with this blog is to pass on some of what I have learned in order to help you achieve success in business.

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