Organizational silos have been a major pain point for business leaders for many years now. Unlike other 'trending' business terms, the concept of organizational silos has been consistently relevant through the years and has a huge impact on a company’s continuous improvement efforts.
Businesses need clearly communicated goals and a system for idea management. It is essential that all employees across an organization can have a voice and understand how they contribute to achieving those goals. If silos persist, the business will ultimately miss its revenue targets and deliver an inferior customer experience. Here's all you need to know about the underlying causes of silos in the workplace and the techniques to break them down.
What Are Organizational Silos?
Organizational silo is a business term representing the separation of different types of employees, most commonly by department. The silo mentality in an organization is almost always associated with turf wars between different departments. This destructive organizational barrier often leads to inter-departmental fights over budget allocation, human resources, and/or leadership roles. Over time, the silo mindset reduces an organization's productivity, efficiency, and morale.
What Causes Organizational Silos?
Standard Set by Leadership
In a vast majority of impacted organizations, the silo mentality trickles down from the top. If the leadership has a defensive attitude towards resources and information in their department, individual employees will model that behavior. This narrow mindset often leads to unnecessary competition between senior managers. Observing interactions between members of the leadership team can reveal damaging behaviors that create and enforce silos.
Silo Mentality Over Team Mentality
The Business Dictionary defines the silo mentality as a mindset where "certain departments or sectors do not wish to share information with others in the same company." Silos are created when individual employees show loyalty towards their own departments, instead of the whole organization. This is usually a result of senior managers losing sight of the overarching business goals and focusing on personal or departmental goals instead.
Competing for Resources
Unless your organization has unlimited manpower or budgets, every discussion about resource distribution is a zero-sum game. Limited resources must be shared efficiently between different departments without the interference of personal rivalry or ambitions. Without a sense of collaboration and teamwork, leaders become unwilling to sacrifice a resource for the greater good of the organization.
Lack of Communication
Lack of communication between teams is another major factor contributing to the persistence of organizational silos. In the absence of proper communication, each department is left to set its own direction and priorities without considering what the other departments need. Over time, this leads to opposing goals and increased conflicts between teams.
Lack of Direction Regarding Company Goals
When the overall goals of the organization are not clearly established and communicated, teams tend to focus on immediate results instead of larger company objectives. The lack of a common direction fosters an environment of mistrust and promotes the formation of silos. Leaders need to work towards creating a unified purpose for the entire organization so that interdepartmental competition doesn't hamper progress.
What Are the Consequences of Organizational Silos?
The silo mindset directly damages the organization’s potential to achieve its goals. In addition to enabling unhealthy relationships between groups and group leaders, organizational silos result in:
- Lost revenue
- Low morale
- Reduced productivity
- Distrust between departments
- Delayed and/or restricted workflows
- Non-cooperative culture in the organization
- Inferior customer experience
How Can You Break Down Organizational Silos?
1. Get Your Leadership Team on the Same Page
Before you can tackle the destructive impacts of organizational silos, you need to get the leadership working together as a team. Each executive on the team must work towards achieving company goals, regardless of the effect on their own department or division. This can only happen when team members are consistently held accountable for either missing or meeting the universal company goals. You need to get your leadership fully engaged in the decision-making discussion so that each executive has the opportunity to voice their opinion. The challenges created by organizational silos are minimized when each executive buys into the end decision, even if they disagreed initially.
2. Create and Communicate a Unified Vision and Corporate Goal
Work towards establishing both long-term and short-term SMART goals. These goals must be Specific, Measurable, Achievable, Relevant, and Timely. Ensure that your shorter-term quantitative goals act as stepping stones towards achieving the overall corporate goal. Balancing these two objectives will keep the team accountable while creating some sense of urgency. A clearly defined corporate goal might take some time to develop but is essential for preventing silos in the workplace. Over time, the shared goals will result in individual executives committing to the whole process and the results.
3. Communicate Your Vision With All Departments to Encourage Collaborative Sharing of Information
Once a unified corporate goal is agreed upon, the vision and its importance must be communicated to the employees. Remember that just like the executives, individual employees also need to communicate and collaborate to achieve key objectives and goals. While elements like knowledge and creativity contribute to a thriving and productive team, factors like collaboration and confidence are vital for interdepartmental interactions. To foster a sense of belonging with the organization, consider creating a cross-departmental training/education system and channels for constructive feedback from outside departments. Your ultimate goal as a leader should be to develop an intuitive understanding of corporate goals in the employees.
4. Hold Interdepartmental Events to Boost Teamwork and Cohesion
You might be familiar with events like training seminars to improve specific departmental skills. It is important to note that cross-department bonding events are just as important for the organization. They give employees an opportunity to build relationships with each other and transform the workforce into a well-oiled productivity machine. This mutual respect goes a long way towards breaking down any animosity that might exist between different teams. As employees get to know each other as people, they are much more likely to initiate dialogue and look for collaborative solutions.
5. Consider Altering the Employee Compensation Structure So That It Rewards Progress Towards Company-Wide Goals
The silo mentality often gets reinforced in the presence of incentives for short-term goals. In this case, employees tend to act in personal or departmental interests instead of working towards the overall company goals. Your compensation structure should directly reflect your priorities as an organization, not solely on targets set by department managers.
An effective leader understands that motivation can vary greatly across teams and most importantly, across individuals. Just as different departments will have distinct incentives for their role, individual employees also need a variety of motivations. In addition to financial incentives, factors like scheduling flexibility, career development opportunities, and positive words of encouragement also help strengthen the employer-employee relationship.
6. Execute and Measure Success
To gain an objective measure of success in this area, remember to track the progress made towards company goals. The leadership must take the time to develop common goals and achievable benchmarks for success. If necessary, specific tasks and objectives can be delegated to other managers or employees. Although you might need routine reinforcement to keep the momentum going, this strategy pays off by advancing a productive company culture.
7. Invest in Company-Wide Idea Management Software
Continuous improvement should always be integrated into the organization’s work processes. Existing workflows must be adapted to allow the leadership to implement and track ongoing development strategies. A streamlined idea management system increases motivation and engagement for your front-line workers and boosts the efficiency of the organization.
Idea Pipeline is the market-leading idea management software that enables employees to respond to challenges related to company goals on a regular basis. It is optimized for productivity and allows employees to submit ideas, provide feedback and see the most popular ideas at a glance. Idea Pipeline brings your projects to life by seamlessly implementing innovative idea development and execution across the organization. The executive team is able to gather a wide range of data, helping employees connect with key decision-makers.
Organizational silos are detrimental to the organization's culture, efficiency, and productivity. Internal tensions in the company inevitably lead to a poor customer experience and lost revenues. In today's cut-throat market landscape, competitors will most definitely use this vulnerability to their advantage.
Breaking down organizational silos through continuous improvement is crucial for your company's long-term success. Idea Pipeline's powerful idea management software is designed to foster innovation and improve productivity in the workplace. Start your free trial of Idea Pipeline today.