Avoiding Operational Silos

21 September 2018

What Is An Operational Silo - and is it stifling your business?

 

An Operational Silo is, by definition, any process, business unit, management style, management structure, or even employee who cannot (or does not) interact with any other process, system or employee. This sort of behavior can happen innocently or through political machinations, by design or by design flaw, but, whatever the case, operational and organizational silos can cause long term damage to your business.

Why Do Silos Occur?

Part of the problem with why silos occur has to do with process as much as people. Businesses have a series of broad goals which must then be broken down into tactical actions for parts of the organization to act upon. In doing so, this division of labor breaks up employees into teams. Teams tend to stay stable for the duration of the action taken. This is a good thing as employees need to work together to get things done. That said, inside the team people may restrict knowledge sharing  too much to one section, thus insulating themselves and the process from other parts of the organization. This is a breeding ground for silos. Priorities are dispersed between various line of business owners -- each with their own department objectives, budget and responsibilities -- diluting the common vision and narrowing the focus of team leaders and managers, leading to a lack of awareness of other priorities within the organization. This type of insulated decision making nearly always leads to problems.

The Silo Mentality

The silo mentality is really an organizational way of thinking. It occurs when departments or management groups do not share information, goals, tools, priorities and processes with other departments. The silo mentality is believed to impact operations, reduce employee morale and may contribute to the overall failure of a company or its products and culture. 

Today, managers are tasked with breaking the silo mindset to ensure information flows freely between all departments in an organization. The goal is to change and improve the relationships between business units by advocating better teamwork. Effective communication and collaboration are essential to breaking down the silo mentality.

Overcoming business silos Active vs. Passive, Formal vs. Informal Measures

There are a few ways for business organizations to overcome such silo effects. The first is to recognize what business processes produce; the second is about the people or systems which run such efforts. Both are linked and must be addressed by management.

Active Measures-Management can use active measures to combat silo issues. The first is around company policies. Policies should be defined by active management and stakeholders. The policies for running the company and its processes needs to be clear and a sense of ownership must be felt by all within the organization. This allows for self-maintenance and stewardship of policies; and when policies are found to be ineffective, this information will be channeled easier than if members do not have stewardship rights.

Passive Measures-Passive measures often involve the human effect inside an organization. People are the most essential component of an organization, as technology can be replaced or upgraded readily. Passive measures, such as allowing the team members of various departments the ability to connect over work and non-work related events is probably the most effective way to break down organizational boundaries. Once employees make personal connections, it becomes easier to run processes because a trust is established. This can also lead to better and innovative ways of working within the organization.

Formal Measures-Stakeholders and managers need some upper-management team structure in order to do their jobs. One of the most important structures to put into place is a formal communication platform. This can be in guise of a weekly or bi-weekly meeting or phone conference, with topics focused on various areas to generate ideas. Formal documentation and clear enforcement of that documentation, with lessons learned built in and captured can be an effective way to break down silos. Quarterly review of business processes versus revenue numbers and productivity can also help guide managers to where issues are arising. As an added benefit, from a technical perspective, consolidating technology platforms and simplifying avenues between them can also eliminate inefficiencies and consolidate costs.

Informal Measures-One of the most important things managers need to remember is their technology and process documentation will only go so far. Giving managers, team leaders and employees' a degree of autonomy and prerogative in their day-to-day work and tasking can have huge benefits for the organization. Giving employees time to talk shop and share information about their jobs can be the best way of breaking things down.