The story behind ‘organisational silos’

It’s a scenario you’re probably familiar with. An organisation wants to improve productivity and innovation, and they know that means working in a cohesive, collaborative way with open lines of communication. Yet, entrenched organisational silos are holding them back from making the wholesale, organisation-wide change they need, and breaking those silos down isn’t easy.

In a 2005 report cited by McKinsey, almost 80 percent of the senior executives surveyed believed that growth was contingent on effective coordination across product, functional, and geographic lines. However, only 25 percent rated their organisations as “effective” at sharing knowledge across boundary lines. 80 percent of the senior executives surveyed believed that growth was contingent on effective coordination across product, functional, and geographic lines. However, only 25 percent rated their organisations as “effective” at sharing knowledge across boundary lines.

Silos and functional divisions are notoriously difficult to dissolve for many reasons, and while there are many ways to make the process easier, we want to discuss two in particular: 1) having a clear understanding of why they are so damaging and the benefits of working in a different way, and 2) investing in the right digital tools to facilitate collaboration and communication, and using them properly.

 

Understanding the problem with silos

Silos – where departments work independently of each other and fiercely guard their information and processes – create virtual barriers between work functions. They can be useful in terms of protecting confidential information and may even help to provide employees with job clarity, but more often than not lead to a mentality of “That’s not my job” and “I have nothing to do with that area”. Silos also stop people from seeing the proverbial wood for the trees – they become focused on their role and lose sight of the organisation’s purpose.

You can think about the impact of silos in terms of two different factories. In the first, each part of the production line is kept in a different room, and components are passed between each room once they are finished with no communication about how each component is made. In the second, the entire production line is housed in one large space where all steps and workers are visible to each other with the freedom to talk to each other to solve challenges and make improvements as they go.

Now think about a major change that touches every part of the organisation or production line. For example, when you release a new product, the delivery team need to create the product, marketing need to promote it, support teams will need to assist customers, legal will need to ensure it meets regulatory requirements, and finance need to understand expenditure and ROI. The first factory will get the work done, but the outcome will be far from ideal. Put another way, marketing can create a strategy, but it won’t be terribly effective if product development don’t talk them through all of the new features.

The beauty of working without silos, like the second factory, is that all teams can collaborate on the final outcome, information is shared so better decisions are made, and problems and opportunities can be addressed cross-functionally in the moment. When teams can interact easily, everyone can ensure their needs are met earlier in the process, rather than when things are set in stone.

Silos are also a major culprit of waste and duplication for processes and tools. We’ve worked in large organisations who operate a dozen separate instances of the same software to complete the same processes. This happens because each department, or silo, is responsible for their own processes and technology and makes a purchase without consulting anyone else. The duplication is expensive and wasteful in terms of licensing and maintenance costs, and the lack of connectivity between users prevents management from having a clear view of all activities across the business.

Improving innovation, productivity, product or service quality and profitability are best achieved by considering your organisation as one team. You can still have specialist divisions or sub-teams who have clarity of purpose, but there is a transparent interface between them where everyone can see processes and outcomes from end to end. Most importantly, people are encouraged to talk to each other so they can provide feedback quickly and work more efficiently.

Why the right tools make a difference

Using the right digital tools in the right way can mean the difference between a smooth shift to a collaborative, open way of working that sticks, and a failed attempt at organisational change. Being told to work together won’t have much effect unless you remove the main physical barrier to collaboration – working in separate, unconnected systems. Yes, it does help to have people in the same office, but if 2020 has taught us anything, it’s that remote working doesn’t necessarily hinder collaboration, but technology can.

Discreet digital environments have a way of creating virtual walls that people feel comfortable working within, therefore reinforcing their silo mentality. When these walls are removed, or doors are opened up between them, it makes the mindset shift towards working in a single team much easier.  But this change needs to go beyond just having a single knowledge base, which can end up being an expensive vessel for information overload that no-one uses. In practice, this means investing in a platform that brings everyone in the organisation together to make it easy to talk, share information and have input into projects. That’s where products like Atlassian come into play. When both work and communication happen in the same tool (whether it’s Confluence, Jira, Trello or another), teams can bring the conversation to the piece of work rather than isolating the conversation in an email, resulting in faster response times and greater clarity.

It’s not uncommon to find organisations who already have several unconnected instances of environments like Atlassian being used in different teams, or silos. This calls for consolidation of licenses and a tooling re-think to determine where the best touchpoints are for each team to work together so workflows can be configured effectively e.g. at what point in the product development process should marketing be involved? What tools will they need?

When the platform and tools already exist within an organisation, the impact to end-users (your team members), is relatively low, particularly if they are using the Atlassian tools anyway. A consultant may need to come in to revamp your processes and tooling e.g. capture new fields of information or make slight changes to workflows.

The impact is, of course, much bigger if staff are required to make a shift to a new working culture, new processes, and a new digital environment. If this is the case, a sensitively-managed culture change program needs to be run alongside thorough training and onboarding.

 

Last words

On a personal level, engaging and interacting with our teammates makes us happier; we take satisfaction from knowing we are all working together towards the same goal; and we get to learn from people we didn’t have the opportunity to meet before.

A unified approach to organisational design that is based on collaboration and open communication allows teams to bring ideas to the table for input, makes it easier to access the best people for any job, reduces product timelines, shortens feedback cycles and prevents mistakes which improves quality and productivity.

There are so many documented, proven benefits to working without silos, it’s surprising that some executives still feel they need justification that that it’s worth the cost and effort to learn to work without silos in their own organisations. Yes, it does require a significant investment and a major mindset shift. But the wonderful thing is, there are platforms that host tools to suit every team in your organisation and people out there ready to help you get them up and running.

So, would having our people talk to each other benefit your company? Of course! And once they do, you’ll never want to go back.

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