Silos Are Wreaking Havoc on Your Business Processes
By Mike Raia Posted March 5, 2018
Silo mentality afflicts most companies but it's important to find ways to communicate across departments for the continued growth and success of your business.
You've heard the term "office politics". While this term isn't directly defined, the connotations are never good. It often suggests a sort of social manipulation at play within the office which can help certain employees succeed while keeping others from flourishing. The problem with this dynamic is that it often has little to do with ability or work ethic.
Silo mentality works in roughly the same way. With silos, employees treat their own team members as familiars but have barriers sharing information or communicating with other departments. Because there's a feel of comraderies within their own department, these employees seek a competitive edge for their own area of the company.
Silos can form in many different ways. For instance, many organizations find that their leadership forms its own silo - executives are more transparent communicating with each other than they are with the employees they manage.
Silos also form within different office locations of the same overall company. You might see silos within freelance or virtual employees and silos within geographic locations. Departments within one office can form individual silos - it's common for the IT department to stay outside of conversations with marketing and sales, while administrative departments form their own distinct silo.
Like office politics, silo mentality is something to guard against in your company. No company is completely immune - small companies can be as riddled with this issue as large corporations and it occurs in every industry.
There are a few reasons why this type of atmosphere can be harmful to your company:
- Lack of cohesive communication. No matter what business you're in, the client lifecycle travels through each department. A lack of internal communication can mean that your customer service suffers.
- Degeneration of employee morale. Your company atmosphere is imperative to employee satisfaction. Employees look at things like earnings, benefits, and advancement potential. A positive work environment also plays an integral role in their decision to stay with a company. Many employees would rate good coworkers as highly as pay scale on their list of reasons a company is an excellent employer.
- Importance of employee retention. Silos build an environment where departments are pitted against each other. This type of atmosphere, where people belong to their department rather than the company, often means that employees are less loyal to the company as a whole. Considering the high cost of employee training, it's important to work toward retaining good employees.
Why Silos Impede Your Business Processes
A silo, on its surface, doesn't sound like it would be damaging to the whole of the business. Theoretically, you might assume that if each department concentrated solely on their specialties, the productivity would skyrocket.
The problem with that theory is that it doesn't work in practice.
Take, for example, your Finance department. Finance has processes and standards in place to ensure the long-term viability and profitability of the organization. However, in many organizations, these processes and standards are invisible and trapped in a "Finance silo," only to be discovered when a project deadline or critical need surfaces. Suddenly a host of questions (and symptoms of stress) arise:
- Who do I submit this finance request to?
- What am I supposed to include?
- How long will this process take?
- Who needs to be notified?
- How will I know where I am in the process once it starts?
- Will there be records of everything?
This confusion can be mitigated with a clear, straightforward process communicated regularly and reinforced by a guided, self-service workflow system. Clear, automated systems like this break down silos by making organizational processes transparent. If you need something from finance (or HR, or Marketing, or whichever department) you know what to do, how it will be handled, what will happen next, etc. There are no mysterious informational "black boxes."
Breaking Through Silo Mentality to Encourage Better Productivity
Silos are often pinpointed as starting with the leadership of the company. It stands to reason that each employee follows the protocols and practices set in place by their immediate supervisors. If you follow that chain of thought up, it starts at the very top of the company.
It's not hard to see why those in charge of managing departments would work hard at achieving departmental goals. This can be a case of not seeing the forest for the trees. It's important that overall company goals are considered, as well as the specific goals assigned to individual departments.
Once you realize that there may be a silo issue, the first step might be in assessing the company as a whole. Determine where the silos are functioning and how it is impacting your customer's experience. Are there areas where communication is lacking?
Depending on the size of the company, management might meet frequently to discuss individual goals for the corporation as a whole. Once definite goals are set, it becomes more transparent where improvements need to be made. If your goal is to increase sales, you might determine that marketing, sales, or customer service needs to improve. You may also notice that competitors are out-selling you because they have a cheaper or better-made product. This information becomes integral to where changes are made going forward.
The mapping for how silos are broken down is going to depend on the corporate culture you're aiming for and the size of your company. It may be a matter of improving communication with department managers so that they can better oversee their own departments.
Small companies are not immune from silo mentality. This can happen naturally, simply because each department is broken down into professionals who specialize in the same area of business. Those who work in the more creative aspects of a business might not communicate on the same level as those who specialize in technology. Those who specialize in HR might not have a great deal in common with customer service representatives. The list of differences can go on.
What's important in recognizing and breaking down your silos is that you develop concrete tools to communicate across each department and management level.