Silos are good for grains, but have no place in your business’s hierarchy.
Has your company ever had two departments stuck in an internal tug of war?
Does your customer service or account management team ever deal with new customers who have skewed expectations of what you offer?
Do you ever have two teams completing two similar—maybe even identical—projects, yet they’re working separately on them?
These are all signs that your company is organized in functional silos, and they’re holding your whole team back. In this post, you’ll learn why they’re a barrier to productivity and how you can start dissolving them.
Let’s get started.
What are functional silos?
Functional silos in a business are teams of employees, grouped by function, that all operate separately from each other, without cross-collaboration.
The name comes from the way of storing grains that ensures separation of different grains and often uses top-down distribution. In functional silos, departments are organized the same way: totally separate, with information and communication mimicking that top-down distribution.
Fun fact: The term was first coined by organizational development consultant Phil S. Ensor in 1988, in an article for the Association for Manufacturing Excellence.
He describes Functional Silo Syndrome as an “overall organizational mentality [that] is one of imposing control on people rather than eliciting commitment from them.”
In companies organized in functional silos, teams take strict ownership and control over projects and areas, rather than leveraging collaboration. Managers take control over certain team members, instead of building the best team for each project. And team members take ownership over information, rarely collaborating or sharing data and info.
Why should you break silos down?
Siloed organizations are usually highly structured, with an admirable company hierarchy chart. What’s so bad about that? Well, what looks good on paper often isn’t the best choice in reality.
While a siloed company may have clear boundaries and separation between teams, that’s not as much of a good thing as corporations once believed.
First of all, such rigid separation between different teams allows each team to have their own goals and agendas.
Without teams working toward any shared goals or initiatives, alignment becomes impossible to come by. Departments will work toward their own interests and goals without a reason or way to tie those to the rest of the company.
Additionally, teams taking strict ownership over projects and information prevents collaboration, hindering company performance. When a team can’t or doesn’t know how to bring in expertise from other departments, the best person for the job won’t always be the one doing that job.
And finally, when every team in your company has its own tools, systems, and processes, your organization ends up with added costs and complexities.
For example, companies frequently pay for more than one subscription to the same type of software because different departments use different options. It may not seem like a big deal to each individual team, but it can create substantial costs and its own kind of technical debt over time. And eventually it’ll need to be dealt with by someone.
There’s even an abundance of data making the case for a breakdown.
Statistics about the effects of functional silos
Consider the following cold, hard facts about how functional silos can impact an organization’s overall results:
- 83 percent of executives said that silos exist in their companies (AMA 2003 Survey on Leadership Challenges)
- Of those, almost all of them (97 percent) think that they have a negative effect on the company.
- 40% of company respondents in another survey said different departments having their own agendas interferes with supporting the customer experience. (Econsultancy)
- Almost 80 percent of senior executives in third study reported that effective coordination across product, functional, and geographic lines is crucial to growth. (McKinsey)
As you can clearly see, great leadership should be making it as easy as possible for teams to collaborate across offices, departments, and more. And the first step to doing so is removing the silos serving as a barrier between them.
Let’s go over how you can get started.
How to dissolve the silos in your organization
If you read Ensor’s original article on functional silos, his advice for dissolving silos…isn’t exactly practical. The advice includes recommending that your company “learn how to learn” and “learn how to engage in planned change.”
The value in knowing how to learn is obvious, but how can you cultivate something so conceptual in your organization or team?
Create a culture of collaboration
First things first, you need to work on the overall company culture in your organization so as to encourage collaboration between teams and team members.
Remove the idea of “strict ownership” over work and information, and encourage responsibility and accountability in its place. Instead of someone “owning” a project or process, they’re responsible for seeing to its completion and collaborating with the right colleagues to do so.
Encourage your employees to work together, acknowledge it when they do, and give them the resources they need to do so (more on this in a minute).
Establish shared goals, values, and metrics
One of the big issues with functional silos is the lack of anything unifying your employees across different silos. Sales is working towards one goal, with one set of values. Tech has another set of goals and values, and support has another.
And while each team will always have its own priorities to focus on, there should also be additional shared goals and values unifying them all.
Consider sharing company-wide goals for each year or quarter, if you don’t already, that can guide and direct team-specific goals. For each long-term goal, identify goal metrics and key performance indicators.
For example, setting a company-wide focus of improving revenue per customer gives each department, as well as each cross-functional project, a direction to move in for their own goals. Your sales team might then want to focus on larger deal sizes to help the company-wide goal, while customer support would want to look at improving customer satisfaction and how long customers stay active.
Decide on a single source of truth
Once you’ve started building a culture of collaboration and have set goals for collaborations to work towards, look to making such projects as easy as possible for your team.
All too often, different teams and departments don’t even have access to the same information, software, or other resources. This can be a major roadblock when employees of different teams or functions try to collaborate. They can’t access the same things, don’t know how to use the same tools, or are working from different sets of data.
To remedy this, try to streamline things as much as possible.
For example, consider moving to a unified team management system that lets each team customize their setup to their own needs. It can also be helpful to use an internal wiki that let’s teams easily share other types of information with each other as well.
Focus on goals over functions
Finally, as you build out teams and project plans in the future, build them differently than you did before. Instead of building rigid and siloed teams based on employee functions, focus on the goals of your organization and the projects it’s completing.
Aim to build flexible, cross-collaborative teams to tackle individual projects instead of allowing departments to operate in their own silos.
Leave the silos outside
Silos serve a certain purpose for a certain type of organization, but they have no place in your company’s hierarchy. As you begin to remove them, even a bit at a time, your employees will be able to work better together.
You can try out the following template that we built for you to help promote collaboration amongst your teams!