Silos are a response to the demands of business growth; they develop identity, expertise, and accountability within a corporate context.
So why do 42% of C-level executives at larger businesses prioritize getting rid of them? And why do the vast majority of executives who rely on silos say they have a negative effect?
The modern truth is that in our super-fast data economy, collaboration is key, so we need to break silos. Silos create slower business processes, Increased competition between teams, and bureaucracy, ultimately hampering collaboration.
With new technologies, new systems and mentalities are needed, geared to enable a connected world of business. But it’s all too easy for silos to get in the way.
Information falling between the gaps
Be they physical departments, different software platforms or procedures, people within silos have to work to make sure those on the outside know what’s going on, so teams move forward together. At least, that’s the idea.
In reality, updates fail to reach other departments and information falls between the gaps. Inefficient communication prevents collaboration, which can lead to siloed teams operating in ignorance of what’s going on elsewhere in an organization, and to devastating effect.
In her book The Silo Effect, anthropologist and Financial Times journalist Gillian Tett describes how Sony was felled by the corrosive effect of “siloization.”
At the height of its power, the multinational tech firm was reorganized into sub-companies. This drove efficiencies and profit as the 1990s dawned but further down the line, the silo-ridden Sony had its collaboration and innovation killed off by internal competition. The more mobile and innovative Apple seized the initiative and the rest is history.
Siloization can blind a company, making it very difficult for managers to obtain a detailed and accurate picture of corporate strengths, weaknesses, and opportunities. For 81% of 1,100 marketers surveyed by consumer credit reporting agency Experian, the problem was achieving a “truly holistic understanding of customers.”
Real-time integration of customer data was held up as a chief concern for 54% of respondents, while almost half blamed the difficulty of integrating various data sources. Accessing information across the organization was also cited as a key problem by nearly half of those surveyed. Each of these problems is exacerbated by the presence of organizational silos.
Silos lead to business struggles
If silos are disruptive to organizational collaboration, then the silo mentality is insidious, allowing assumptions to develop unchallenged and nurturing trends that dictate how we behave, work and make decisions.
It was the root of inefficient collaboration as described by more than two-thirds of 500 HR leaders surveyed by people development provider Koreo. Inadequate training programmes are also to blame – staff courses focused solely on developing talent within the remit of the current role.
Far fewer programs were geared towards supporting cultures that develop innovation and social impact, partnership and cross-sector working, and systems thinking – facets of business that are vital for collaboration-built success in modern markets.
This mentality was behind the financial crisis of 2007-2008 when UBS managers’ assumptions about their financial models’ ability to forecast risk led to $30bn being wiped off mortgage-backed securities in the space of two years.
“Ideas matter and economists were all using the same ideas… they were sitting in the same mental silo,” Gillian states.
Time to break silos
In his book Silos, Politics And Turf Wars, management expert Patrick Lencioni says: “Silos rise up not because of what executives are doing purposefully but rather because of what they are failing to do: provide themselves and their employees with a compelling context for working together.”
It is, therefore, incumbent upon business owners to create an environment that compels both bosses and employees to work together. Here are three ways to escape silos in your business:
1. Get the leadership team on board
If you want to break down silos in your business, your leadership team needs to lead the way. It needs to create a vision that trickles down to your managers and employees and encourages collaboration.
So start by making sure your leadership team buys into the change and ties this in with any long-term goals your company has.
By changing the mentality of the business and everyone within it, you will be able to empower people to work together for the benefit of the company. And by providing that level of trust across all employees, your business will reap the rewards.
2. Implement cloud technology
If you’re not using one already, switch to a cloud financials solution for your business, where disparate applications, workloads and communications channels once held by in-house servers are instead hosted in a remote data center in the cloud.
You will be able to say goodbye to the days of sending files between silos via email, while long digital paper trails and missed communications will be a thing of the past.
By working in the cloud, all work-relevant items will be accessible in one central online system, leading to a clearer-cut business environment.
With everyone working from a single database, your company’s information can be updated in real time by all authorized personnel through a secure login. And that means farewell to any confusion over which department holds the most current version of a document, while multiple copies of the same items will be no more.
By using a cloud-hosted network, your employees can work from any location with an internet connection and at any time. This flexibility will increase employee well-being and productivity and will help to boost your company’s retention rates. It will also be attractive to new hires when you’re recruiting.
On the tech side, server space is paid for on demand, while the IT infrastructure is maintained and continually optimized by the provider. This scalable, cost-effective arrangement relieves financial and technical pressures on your business, allowing you to redirect resources towards growth.
Perhaps most importantly of all, cloud technology means your data is securely backed up, while safety is bolstered because information is held remotely, not on specific devices. If the hardware is stolen or compromised in some way, your information remains safe and out of reach of unauthorized parties in the cloud.
3. Incentivize your staff
Offer incentives to your employees to encourage them to work outside of their silos. Once such way to push the collaboration message is by using gamification.
Get your employees earning points and winning prizes for successfully reaching their workload goals, collaborating with others and completing tasks, answering questions or performing other activities.
Firms playing it right can increase total activity by more than 20%, which all helps to shape investigative and creative behaviors that support the accomplishment of business outcomes.
Benefits for your business data
As silo walls become transparent, you can keep an overarching eye on business data and delegate tasks accordingly; employees can progress independently and within teams while being fully aware of the status of other teams’ projects.
With all parties singing from the same hymn sheet, cooperation grows, allowing departments to align their operations with overall business goals.
Many organizations are still experiencing far-reaching problems that stem from silo working, despite our awareness of the damage being done.
But cloud technology represents the start of understanding organizations as “networks of people” and is a cornerstone to nurturing talent through collaboration at every level.
In such a climate, business leaders are liberated to take on a more social form of leadership within a fully connected business. The cloud becomes the final piece of the corporate jigsaw, so bosses and employees can see the big picture for now and years to come.