Speaking Plainly: Organizational Silos in Perspective
1. Why do organizations develop silos in the first place?
If you are a manager responsible for a function, you naturally want to control it. Your group becomes the in-group; everyone else the out-group. Maintaining clear boundaries is perceived to reduce friction. Hierarchy just seems easier. Information passes upward; control and command downward.
It's easy to fall into the trap. Organizations have often tended to reward efficiency more highly than effectiveness. Efficiency can be measured on a very narrow scale, and is something that managers can control on their own, without regard to wider implications. Incentives skewed toward efficiency tend to encourage silos.
Effectiveness, in contrast, needs to be measured on a broader scope. Achieving it seems harder because it requires greater collaboration. Unless deliberately encouraged, organizational schemes that optimize effectiveness tend not to arise spontaneously.
2. Why are silos so detrimental?
Silos were probably necessary when all information and knowledge was based on person-to-person communication and pencil-and-paper. But digital takes us way beyond that point. The instant accessibility we take for granted today changes everything, not the least of which is customer expectations. It changes the game for optimal organizational and governance schemes.
Put simply, the effect of silos is to optimize locally, often to the detriment of the end-result. They result in product components that aren't interchangeable; data and knowledge that aren't reusable. The result is unagile organizations where management always seems to be fighting fires.
Innovation tends to be another casualty. Creativity is most likely in open marketplaces, but silos effectively act as closed marketplaces. Meaningful innovation can easily stagnate.
3. What are some symptoms you can use to tell if your organization has silos?
I'm often struck that customers and other third-parties seem to have a clearer view of an organization's operational challenges than staff inside the company does. Why? Because external parties are often forced to interact in disorganized and disjointed ways with different parts of the organization to receive value-add and resolve problems. In effect, heavily siloed organizations outsource their integration issues; then like it or not, customers and other third parties pay the price. Think about the last time you yourself were a customer with an issue and had a hard time reaching the right party to resolve it.
Another frequent symptom is internal communication problems. Do different parts of the organization seem almost as if they spoke different languages? Not likely to be very effective.
Perhaps the most telling of all symptoms of silos is simple finger-pointing. That's a sure sign that parts of the organization do not appreciate the role and significance of others in producing end-results. Everyone in a value chain needs to see themselves in the same lifeboat and everyone should be rowing as a team.
4. What role does process management play in addressing organizational silos?
Removing silos and eliminating their ill effects requires getting everyone on the same page. To achieve it, a process perspective is basic. But that's not enough on its own. The focus needs to be on what end-value is being created and everything required collectively to produce it.
Several steps need to be taken in that regard. First, recognize there are no silver bullets; a deliberate engineering approach is required. Second, understand what techniques are needed:
- Value Chain: Understanding, modeling, and evaluating the organization's value chain is a crucial step.
- Concept Model: You also need to understand and address the communication and knowledge dimensions of the value chain.
- Policy Busting: Finally, you must stand ready to bust business policies anywhere along the chain that are falling short in promoting optimal end-results.
Fortunately, there are proven techniques to address each and every one of these challenges.
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