How to Break Down Organizational Silos Across Your Value Chain
We’ve all heard the term “silo” used to describe insular work groups. Organizational silos may be high functioning within themselves, but they don’t communicate very well with the outside world… or even with the team on the other side of the building. Silos occur within organizations and they can bedevil your supply chain and overall business performance.
Some people say the term arose out of the Lean movement, which may be true, but we think an even older phrase describes the typical silo perfectly: The left hand doesn’t know what the right hand is doing.
Why organizational silos are so bad
There are several types of silos that can strain organizations. Some, frankly, stem from leadership. If the top brass isn’t encouraging the flow of information, collaboration and teamwork, or if shift leaders don’t talk to each other as shifts change — leaving the second shift to reinvent the wheel — you’re going to have trouble. Without strong leadership, departments can set goals that may conflict with each other.
Similarly, organizational culture can cause teams to insulate. If, for example, the workplace is hyper competitive, silos won’t just develop, they will be deliberately built as people choose not to share information and best practices.
Data silos aren’t so much about people, but information. This happens when information is collected and stored by departments, but not shared. One very easy way to think of a data silo is to think about law enforcement. Until rather recently, criminal records and other vital information was stored in individual precincts’ computer systems, with departments in other states, or even across town, not having access to it. Any time your organization has data that isn’t accessible to other teams, it leads to inconsistent decision-making.
Some common problems caused by siloed teams
Silos thwart efficiency, productivity and in some cases, even safety. But the problems they cause can burrow even deeper than that, eroding your trust between teams both inside and outside of your organization.
Decreased supply transparency. Managing a supply chain requires accurate, real-time data. Your supply chain team needs to know the who, when, what, where and why. When you’re in a silo, that information may not be conveyed. It can lead to increased risk and inaccurate forecasting.
Groupthink. Insulated teams tend to be very well aligned. There’s a lot of agreement without much pushback. This is a risky situation called “groupthink,” and it occurs when a group values harmony and conformity, striving for consensus at the expense of their own opinions. Silos are ripe playing fields for this phenomenon.
Less innovation. When everyone is thinking the same way, it doesn’t leave much room for big ideas… or any new ideas. Innovation in the supply chain needs to involve every part of the process.
Tepid collaboration. Insular teams don’t collaborate with other teams, which weighs down the quality of the whole organization.
Duplicated work or job redundancies. This is one of the biggest enemies to efficiency. You may have two teams working on the same thing at the same time, perhaps even getting different results. Or people on different teams with the same roles. It adds bloat to your bottom line. And this goes for data, too. You’ll increase your IT costs by storing duplicate data platforms and information.
Contrasting processes and systems. It’s difficult enough to get your organization into “well-oiled machine” shape with all processes and procedures flowing as they should if you don’t have siloed teams.
Eroded trust between teams. When teams aren’t sharing information and working together, it’s very easy to slip into an “us” and “them” mentality.
What to do about it
Recognizing you’re dealing with organizational silos is the first step. Now what? Here are some simple actions you can take to start breaking down those silos.
Reward innovation. Encourage people to take a look at departmental processes and procedures and suggest changes. Is there a better way to get the job done?
Create interdepartmental collaboration. Create a team made up of people from several departments and seniority levels. Task them to work together and share information in order to solve a problem or create an initiative that affects the whole organization. You can start very small here. This doesn’t have to be revamping entire processes. It could be creating an interdepartmental team that is in charge of diversity and inclusion efforts. Or a team that takes an objective look at your company’s brand (the way suppliers, vendors, customers and even job seekers view you) and offers ways to boost it. Or creating a series of Lunch and Learn programs in which departments share best practices.
Rethink reward structure based on departmental performance. This might be a tough nut to crack if this is the way your operation has always done it. But few things encourage silos more than departmental competition. Instead, reward your managers and supervisors for the performance of the organization, and even for information sharing.
Organizational silos erode efficiency, which in turn can bog down your processes and ultimately your bottom line. Breaking down those silos is the first step toward greater collaboration, efficiency and profitability. Contact USC Consulting Group today for help improving communication across your divisions.
