During my last post Improving collaboration, breaking down silos, and innovating better. What does that all mean?, I shared what “improving collaboration” probably means to most people in the context of making business better. Today, I’m going to delve into the world of silos. What are they, what does it mean when someone tells you they want to “Break down silos” and finally how to challenge the person to understand what they really mean when referencing this jargon.
What is a silo?
According to dictionary.com, a silo is “a structure, typically cylindrical, in which fodder or forage is kept”. In the business context, a silo generally represents a wall or boundary put up by an organization to keep them focused on accomplishing their goals and keeping outsiders from interfering with progress. Sometimes these are also called “stovepipes”. Some might even go on to add that it’s an organizational construct designed to protect and serve the hierarchy. The bottom line is that silos are a method for ensuring focus around specific business deliverables.
Why are silos built?
In order to understand why silos are built, let’s identify the basic types of corporate silos:
- Business Unit (Hierarchical)
- Interest focused
- Project focused
As we look at regulatory and Business Unit silos, they are often there for very good reason. In regulatory case, it could be the underwriters not being able to talk to the investment side of a financial institution. For Business Unit silos, they could be built due to financial reporting, etc.
For interest based silos, the need to be a silo can exist for many reasons including exclusivity (Mensa), competing interests (Google apps vs. Microsoft Office) or privacy (Mergers & Acquisitions).
Project based silos tend to track with the length of the project, but can also be Business Unit/Hierarchical in nature depending on the project scope and participants.
Silos are built for a reason. In a typical large enterprise, there are competitions for resources and success, competing priorities and lots of irrelevant activities that are happening that can become distractions from accomplishing the goals of the teams.
Another reason silos are built has to do with affiliation. This is by choice, not by edict. By building groups where you share a shared set of goals, you effectively have an area of focus with a group of people interested in the same area and/or outcome.
There are many more reasons and impacts of why silos are built, but I simply wanted to establish that silos are built for a purpose with legitimate business needs in mind.
What does “breaking down silos” enable for the business?
If we agree that silos serve a valid business purpose, why do we want to break them down? Part of the reason for breaking down silos is around reducing duplication of effort. If you take two teams that would be competing on a project and instead get them to work together and collaborate on a project, the hope is that you get a better output that incorporates the best ideas from all employees throughout the company.
Another benefit of breaking down silos is the opening up of information so that it’s accessible to everyone. This allows information to be much more accessible often resulting in serendipity and new opportunities. This history enables people to see what’s been tried in the past, the people who were involved and maybe even insight into why it didn’t work.
Lastly, breaking down silos enables expertise to be leveraged across the entire enterprise. This is extremely valuable when highly sought after expertise is needed but hard to find.
What behaviors are challenged when breaking down silos?
Silos, while beneficial when used properly, can also be abused. One of the behaviors that is prevalent in silos is local optimization where decisions get made that are good for the silo, but may be bad for others or the company.
Sometimes silos are built purposefully to keep thinks private. Some leadership will actively have two groups try to solve the same problem. Sometimes this is done secretly, and sometimes it’s done openly. Regardless of the method, once this approach is realized, it pushes people to become very secretive and not want to share at all.
Secrecy is a byproduct of competition, regardless of the scope.
While encouraging teams to work together and collaborate vs. competing sounds like common sense, it goes back to ownership and priorities. Most leaders would believe that since they hired the resource, and are paying for that resource out of their budget that their needs should take priority over everyone else’s. By having a resource that reports to them working with other teams, there is a possibility that the resource may not be available when they need them.
Since every corporation has some level of politics, it really becomes a challenge to think of your team sharing bad news across an entire company. In part silos are created to limit the exposure of bad news or failures. Even in organizations where failure is seen as a good thing, it’s really only good if someone else does it.
Managing the attention and ignoring the inputs of people who might second guess the actions of the team may slow things down and distract the team from accomplishing the goals. A clear process needs to be in place to ensure the team doesn’t get distracted and miss deliverables.
What leadership really wants
What I believe leadership wants are silos that are:
- Transparent – By allowing people to see inside the silo, it enables people to understand what that silo is working on and reassures them the work is in the best interest of the organization.
- Permeable – By allowing information to flow in and out of the silo, it enables other groups to leverage the expertise and information best across the enterprise and allows the silos to better understand the impacts of local optimization.
Challenging the jargon
When one of the leaders says they want to “Break down silos”, be ready to challenge them with the questions about business benefits:
- Are the silos mandatory?
- What would breaking down silos enable in the business?
- What do silos do to your business today?
- What incentive is there for these silos to go away?
- Is your company prepared for transparency?
- How will leadership deal with “Monday morning quarterbacks?”
As you can see, there are many benefits to silos as well as challenges. By developing a deeper understanding of the silos and why they get created, you can then have a better handle on whether the silos are beneficial or detrimental to the organization. Even with active engagement, this could be one of the most challenging changes that an organization faces. But in the end, quantifying the value to the organization for breaking down silos is very challenging. Most of the benefits are qualitative and difficult to measure. Your efforts would be better spent seeking out other business value.
In my final post of this series, I’ll try to demystify innovation. While innovation itself far exceeds the scope of a simple blog post, hopefully developing a deeper understanding of what innovation is, why it’s important to leadership and the behaviors necessary to do it successfully will be valuable.