Every business leader aims to create and maintain an innovative and successful workplace while keep clear guidelines and high productivity. 

But managing a company with multiple levels of employees can be incredibly challenging, and has lead to many organisations adopt silos, a management technique which started with large corporations and has slowly permiated through many other businesses of all shapes and sizes.


What Are Organisation Silos?

Think of organisation silos as management departments, divisions, or teams that are part of the same company but operating independently. These departments barely (if at all) share information, resources, or even ideas among themselves.

The silos may be due to varying reasons — including budgeting restrcitions, corporate culture, or management preferences.


What Causes Organisation Silos?

Before you understand whether silos will build or kill your business, you must learn how your company becomes siloed.

Lack of Leadership That Promotes Collaboration

Managment is leadership. So, if management does not take the lead to foster collaboration among employees, teams are likely to become siloed.

For example, the marketing team leader may be too focused on meeting their goals and deadlines. In the same way, the sales team is only concerned with their targets. This disconnection between management and team members will create silos in the organisation.

Internal Communication Gap

Without communication, teams lose the sense of cohesion and togetherness, which results in organisational silos. For instance, suppose there is a new development in the product engineering department. In that case, if the product engineering team leader does not share this information with other teams, that department continues to operate independently and hinders other departments from taking advantage of the development.

Failure to Focus on Common Goals

Every department in a company has goals and targets to meet, but it should be avoided that each team work in complete isolation. Management must align the goals of each department towards the overall vision and objectives of the company.

The management team leaders should come together to discuss how the teams will work together and provide resources and advice.

Lack of Cross-Department Projects

Nothing brings teams together better than working on cross-department projects. Setting up an inter-departmental collaborative project keeps teams engaged and ensures management does its job correctly.

For instance, a product engineering and marketing team can work together to create a new product launch plan or design a customer experience that works for both departments. While such projects require little time and resources, it helps to bridge the gap between teams.

Lack of Unified Organisation Culture

Among the critical traits of entrepreneurship is creating a culture that brings teams together. You can achieve this goal by:

  • Fostering open communication
  • Encouraging diversity and inclusiveness
  • Rewarding teamwork instead of individual efforts
  • Celebrating successes openly

Such efforts will make teams from all departments feel like a part of the bigger picture and foster team collaboration.

Geographic Dispersion

As a company grows, it becomes inevitable for teams to be geographically scattered. For instance, some departments may operate from different offices, or the unit is split between multiple cities.

This dispersal makes it hard for management to create unity among different levels. Also, without proper collaboration tools, teams become isolated from each other.


How Do Organisation Silos Affect Business Growth?

From what has already been discussed above, organisation silos can slow down progress and prevent growth. Here is how:

Slower Decision-Making Process

When people with different skills, knowledge and perspectives come together, they create a strong team. Such teams can think fast and come up with a decision for the good of the entire organisation.

On the other hand, siloed teams are only focused on individual departments' goals. Each team will likely try to protect its interests and go back and forth before arriving at a decision.

Reduced Productivity

First, the silo mentality lowers operation efficiency. The reason is that management and employees spend more time protecting their interests than helping the organisation to grow.

Additionally, siloed teams miss out on new ideas from other departments. This issue leaves the company with fewer options and limits its chances of success.

Finally, silos can kill workers' morale. When management fails to appreciate the efforts of different teams, team members become unmotivated and may begin to put in less effort, further reducing productivity.

Reduced Customer Satisfaction

Siloed departments are based on the 'I win, you lose' mentality. This problem manifests as using poor quality supplies, lack of communication, slow turnaround times and generally not paying attention to customers' needs.

Since customers are the lifeblood of any business, failure to meet their expectations will likely result in reduced customer satisfaction and, eventually, losses.

Diminished Innovation

Innovation only happens when bright minds come together to bring their ideas to life. But when workers are isolated, that prevents them from learning and bouncing ideas off each other.

Furthermore, silos may cause duplication of effort. For example, if two or more departments work on the same assignment simultaneously, time and resources will be wasted.


When Are Organisational Silos a Good Thing?

Silos are not always a bad thing, but silo mentality is. While some organisations require silos for management purposes, management must ensure that silos don't hinder communication and teamwork.

For instance, in a non-siloed organisation, a delay in one department may cause a domino effect in other departments. Conversely, silos allow management to operate different departments independently and reduce delays caused by internal issues.

Therefore, silos are sometimes good, but the people they involve determine how the division affects the company. It is up to team managers to lead their teams towards collective goals and create a culture of collaboration.


How Do You Overcome Organisational Silos?

Communication, collaboration, and cooperation are the keys to overcoming silos. Here are some strategies team leaders can use to break down silos and create a team-oriented culture.

Establish Clear Goals

Silo mentality starts at the management level. Some department leaders often set goals that benefit their team but conflict with other departments' goals.

Therefore, management must first understand the organisation's long-term goals and then distribute them to each department. This step allows management to provide direction while allowing department teams the freedom to find their way of achieving the objectives.

Communicate More

Approximately 54% of businesses agree they have siloed customer experience operations management. And this issue primarily results from inadequate communication between management and employees.

Although the division of labour is essential to create a sense of responsibility, management must ensure a link between different departments. The goal is not necessarily to kill silos but to destroy the resistance to sharing knowledge and ideas.

Leverage Collaboration Tools

Thanks to technological developments, management can use various collaboration tools to break down silos. From project management tools to cloud storage, such tools provide a secure way for management to communicate with their teams and collaborate on shared projects. Efficiency in operations creates the urge to share information quickly, accurately, and securely.

Recognise the Success of Others

Most siloed companies have a competitive mindset. Some offer incentives that only benefit particular departments, while others reward individual efforts instead of collective achievements.

When management acknowledges other departments' success, it helps build trust among employees and encourages collaboration. This method is especially effective when management awards those who support other teams' success.

Train Together

Organisational silos can be broken down by management setting up cross-team training sessions. Training is especially helpful in team building, allowing management to sit next to employees and listen to their ideas. Furthermore, training allows management to introduce new collaboration methods and promote teamwork across different departments.

Suppose the production department recently implemented a new system or software. Instead of training the production team separately, management can organise a cross-department training session so that other groups can better understand the new system and learn how to collaborate with the production team.


Take Away

Silos hinder the free flow of knowledge and information, and in return, silos reduce productivity and hamper the success of companies. So, one critical small business advice is to strive to eliminate silos as much as possible.

Fortunately, management can use various methods to break down silos, such as establishing clear goals, communicating more effectively, leveraging collaboration tools, rewarding collective success, training together, and eliminating physical barriers.

With these strategies, management can kill the silo mentality and create a cohesive work environment that encourages collaboration and boosts employee morale. Also, when teams come together, they are more innovative, offering your organisation a competitive advantage in the highly competitive market.