Functional Silos and What to do About Them
A recent American Management Association (AMA) survey revealed that 83 percent of executives said that silos exist in their companies. 97 percent think they have a negative effect and 31 percent believe that silos have extensive destructive consequences.
Silos are tall, vertical, isolated and enclosed organizational structures that create artificial barriers between one department or group and another. You can recognize the so-called “silo mentality,” when the only indication that people actually work for the same organization is that they have the same company logo on their shirts.
When goals are not aligned between departments, the company can actually be working against itself, making decisions as if other departments are external competitors. This “turf-dom” leads to politics, prevents interaction, and disperses responsibility and accountability. Silos create a duplication of work, delays, and red tape that are ultimately experienced by the customer. And further, silos create barriers to innovation. In the end, silos waste time, money, and energy.
Silos are present in all types and sizes of organizations. I recently worked with a 60-person company in which the people in the Accounting Department were not permitted to use the laser printer “owned” by the Marketing Department. While these printers sat side-by-side, each department treated the other as if it were the enemy infringing upon its territory.
When Team Builders Plus conducts Organizational Surveys to examine employee attitudes and organizational effectiveness, some of the lowest rated survey items include:
· Information flows freely between departments.
· Departments coordinate their efforts.
· People in other departments follow through and deliver on promises in a timely manner.
· There is a high degree of trust between departments.
Low ratings from these items often point to the existence of “silos.” Dynamic organizations learn to break down walls that exist within and between divisions, departments and teams. They create lines between the boxes on the organizational chart. They manage the "white space” to eliminate functional boundaries and bridge communication gaps.
Where does it all begin?
The first place we need to look at the top of the organization. Another AMA survey found that 83 percent of respondents felt that their organization had turf wars and territorial management. This is not a coincidence that AMA’s other study found that 83 percent of companies had silos. The behaviors of the people at the top impact organizational dynamics. This “trickle down” effect is felt throughout the company.
Senior managers need to make resource allocation decisions with the company’s best interests at heart, not just their own department. This limited leadership perspective is indicated in 360-degree feedback results.
Team Builders Plus research has found that managers are often weak at:
· Examining the impact of actions on other areas of the organization.
· Working toward organizational goals in addition to personal objectives.
Organizations thrive when managers model behaviors to demonstrate that the organization and customers are more important than team or departmental victories. However, this problem is often grounded in organizational reward systems that recognize management for their department’s success, but do not evaluate whether those individuals are team players across organizational lines. It’s basic psychology that people exhibit behaviors they are rewarded to exhibit. Therefore, people need to be rewarded for helping other departments to succeed.
Resource scarcity creates competition
In the animal kingdom, we’ve all seen breathtaking scenes of animals fighting for survival in a battle for their next meal. However, when food is abundant, these battles are few. For example, bears that normally fight each other for food stand side by side during the salmon run. In the business world, abundance and teamwork are profoundly connected. Individuals compete for resources that include money, technology, head count, space, recognition, prestige, and power. Ironically, when resources are scarce, competition is greater. However, it is precisely during times of scarcity that departments must work together as a cohesive unit. And perhaps, just maybe, lack of cohesion contributes to scarcity.
Breaking down organizational silos
Individuals would be well served to adopt the environmentalist motto of, “Think globally, act locally.” They must regularly ask themselves questions, such as:
· What other teams or departments need to be a part of this decision-making process?
· Whose buy-in do we need to make this process or project flow more smoothly?
· Who will be impacted by this decision?
· Who needs to know this information?
A more formalized process can also be used to improve organizational communication and thus, help to forge stronger interdepartmental relationships. By mapping and analyzing communication flow between groups, organizations can create true links between groups.
This communication mapping process requires that each person, team and department:
1) Identify the individuals (or teams/departments) that must provide information to you so that you can achieve your goals.
2) Identify the specific information provided to you from each person (team/department) listed in Step 1.
3) Identify the Accuracy, Completeness and Timeliness of each piece of information.
4) Rate all information for Accuracy, Completeness and Timeliness on a scale of 1 (low) to 10 (high).
For example, the Inventory Management Department must provide Production with current information on product inventory levels. Inventory Management provides weekly status reports and feels that they are giving Production all of the necessary information. However, Production rated status updates from Inventory Management as Accurate (10), Complete (10), and Timeliness (2). (This can be recorded as A10, C10, T2.)
This analysis indicates that Production and Inventory Management have different expectations about when they should give and receive status updates. Inevitably, this can lead to conflict, finger pointing, and a breakdown of trust.
The communication mapping process allows individuals, teams and departments to establish common expectations and work together towards common goals.
While organizational structures are getting flatter, hierarchy is not going away. Individuals can no longer stay walled inside their functional silos. Silos do not offer protection. Rather, they create organizational blindness.
Individuals must learn to reduce friction and "turf wars" between organizational levels and departments. People must generate collaborative approaches to getting results despite geographic or functional separation and establish true lines of communication between the boxes on the organizational chart.