Therefore Strategic Technology Services

Thursday, 26 September 2013

Breaking Silo Mentality

Ask CEOs what the number one innovation killer is and the odds are more than even that the answer will be “silo mentality”. Again, ask them what the biggest reason is for the failure to deliver on strategy and the phrase “silo mentality” is likely to turn up again.

Silo mentality is in essence an attitude problem. It emerges when companies corporatize. As companies grow it becomes necessary for them to introduce distinct functional areas to make control possible. In the absence of silo breaking leadership, departments are inclined to cease sharing and cooperating with each other. Enter silo mentality.

The long and the short of it … silo mentality reduces efficiency and can be a contributing factor to a failing corporate culture. Silos result in the duplication of cost and effort, cause functional areas within your business to work at cross purposes, destroy cross functional synergy, stem the flow of knowledge and work against economies of scale. The largest problem, however, is a lack of alignment with the overall company strategy.

Customer focus

Successful companies are Customer centric. They continually focus their efforts on optimising the value that they offer their Customers and thereby prosper. The Customer becomes the single point of focus around which all functional areas unite.

Unfortunately, silo mentality forces a shift in focus. The Customer is no longer centre stage. Customer centricity is, to a degree, replaced by a low key “turf war” between functional areas. If left unchecked, the lack of Customer centricity will erode the ability of the company to add value to the Customer, which will place it in a weaker position relative to its more Customer centric competitors.

Impact on Strategy execution

At its core … Strategy needs to be Customer centric for it to be of any value. Further, any material strategic initiative will require an effort that straddles more than one functional area. Silo mentality stands in the way of multiple functional areas cooperating to deliver on a strategic imperative.

Silo mentality catalysts

Silos originate as a result of many factors. Catalysts such as the following play a role in allowing a silo mentality to take root:
  1. Introduction of departments 
  2. Mergers and acquisitions 
  3. Emergence of pockets of knowledge that are not freely shared. 
  4. Job insecurity, resulting in staff competing with each other. 
  5. Divide and rule management cultures. 
  6. Development of inner circles within management structures. 
  7. Absence of a strong Marketing function capable of maintaining Customer centricity. 
  8. The introduction of ambitious and divisive managers.
Often a series of silo catalysts, such as those listed above, play together to make the organisation increasingly insular.

An “us and them” mentality can sometimes appear, particularly in organizations that are under performing. It’s common in the turnaround space to find departments pinning the root cause of their under performance on other functional areas.

It’s a cultural issue

At its root … silo mentality is a cultural problem.

Like most undesirable aspects of a corporate culture, silo mentality is typically fed from the top. It’s generally fair to say that it is senior management that allows silo mentality to take root and prosper. As a complicating factor, silo mentality creeps into the organization slowly, and it is more than probable that it taking root was something that was not initially apparent.

Lead from the top

The reality stands that silo mentality is typically introduced from the top. When staff stop sharing with colleagues in other functional areas, they are typically taking their lead from the departmental heads. As a consequence, an initiative to break down silo mentality requires senior management to make a conscious decision to cease acting in silos and to start cooperating and sharing information freely.

We have already had a look at silo catalysts. Let’s shift our focus to potential silo breakers. The silo breakers that you implement in your environment will be dependent on the peculiarities of your environment, so what follows are merely examples to stimulate thinking.
  1. Make a public, management led, pact to the organization to start breaking down silo mentality. 
  2. Add interdepartmental cooperation and knowledge sharing as a KPI. 
  3. Revisit and re-launch your corporate values. 
  4. Recognise staff that act as silo breakers publicly. 
  5. Promote only those that have the ability and willingness to cooperate and share, and make your position in this regard public. 
  6. Break barriers that divide your Executive Team. 
  7. Manage staff that are building or perpetuating silos out of the business. 
  8. Undertake projects that require cross functional cooperation. 
  9. Ensure that your annual bonus is in part broad based and does not actively encourage department performance at the expense of company performance. 
  10. Eliminate formality in the company and the need to go through endless chains of command before engaging leaders. 
  11. Establish common platforms and systems across the company and give people access to the same data and information. This discourages information hoarding. 
  12. Design comfortable space in each building or on each floor where cross functional teams can meet in a relaxed setting to brainstorm products / services, processes and work cross-functionally to create solutions. 
  13. Review your business process to make the flow of activity between functional areas cleaner and more information rich. 

In closing ...

The key to understanding silo mentality is to remember it is a human behaviour. There are only two ways of changing human behaviour. Punish adherence to the old behaviours … reward adherence to the new behaviours … in short, the carrot and the stick.

Silos are great if you're storing corn or grain … but not so great for organizations. In an organisation they stop innovation, stand in the way of strategic execution and quite simply make the workplace an unhappy one. Engage in honest conversation with your Team … get to the root of what your silo catalysts are … implement your silo breakers … and move forward.

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