Opinion Column

The Delfi Group: Transforming organizational silos

By Larry Schruder, The Delfi Group

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While silos in business can create barriers between department, columnist Larry Schruder offers some options to transform these silos into assets rather than liabilities in how organizations are run.

Getty images While silos in business can create barriers between department, columnist Larry Schruder offers some options to transform these silos into assets rather than liabilities in how organizations are run.

Our last column drew attention to an all too familiar organizational reality that severely limits overall effectiveness – the presence of organizational silos. Organizational silos are barriers that exist between different departments or management units of a company, causing people that work for the same employer to become unco-operative, obstructionist, and unhelpful. This can be labelled organizational politics, departmental rivalry, or turf warfare – but it all manifests the silo mentality of independence, disconnectedness and lack of big-picture thinking. Today we explore some of the options to transform these silos into assets rather than liabilities in how we run our organizations.

First, we need to accept that the larger the organization, the more likely that there is a need for some type of organizational structure that allows for the efficient management of work and people. But structure is not the problem. Rather, the translation of these necessary but artificial lines of division into concrete rigid international boundaries full of entitlement, territory, loyalties, and membership, enables the slide of a unified organization into the much more risky loosely-knit colony of independent city states competing with each other.

Not surprisingly, the responsibility for concrete organizational silos starts at the top if the house. A CEO that creates, supports, tolerates, or turns a blind eye to a competitive environment amongst the executive team members is an enabler of this dysfunction. A CEO that rewards individual achievement rather than overall team performance sends a clear signal that the path to the next higher office is determined by individual performance and silo excellence rather than co-operative collaborative behaviours enabling bigger picture success. Rewards and expectations are powerful motivators for results-oriented people – and inappropriate rewards can definitely incent the wrong behaviours in a team of executives.

Here are a few suggestions for the CEO’s personal consideration to start dismantling organizational silos. Strengthen team reward structures at the expense of individual rewards by score boarding and managing overall organizational performance rather silo performance. Engage in periodic rotation of executive leader portfolios to both broaden the executive competency and to create great interdependencies amongst the team to remain successful. Insist on a TEAM ONE mentality around the executive table – all present must have the organizational hat on always – and be firmly sitting on their silo leader hat while at the CEO table. Acknowledge collaborative and co-operative behaviours, and step on competitive or silo-based perspectives at every opportunity that presents itself. And finally, put the right people into these crucial leadership roles. Intensely competitive people have a hard time playing on a collaborative team and passing up on a chance to individually excel. Make collaboration and teamwork your very visible mission as the CEO. There is a very simple axiom of truth – what interests the boss fascinates the heck out of direct reports.

At lower levels in the organization, leaders must use opportunities, as they present themselves, to create cross-functional project teams, opportunities where employees of difference silos have to come together to solve a problem. Cross-silo interaction breeds familiarity and breaks down perceptions and barriers. Some organizations have adopted this model completely through a matrix organizational structure – employees have both a project leader (short-term and task-based) and a functional leader (long-term, departmental). Both collaborate on compensation and rewards. The project leader focuses on completing the project on time and on schedule. The functional leader “owns” the resource and ensures the ongoing organizational and individual competency and capability in the subject-matter expertise – really a much smaller silo leader that shares resources as required by the business.

Other people management options include staff rotation and cross-training. This enables greater production flexibility, enhanced training and career development, and a broader appreciation by employees of other parts of the production or service delivery process. All-employee or departmental staff meetings should always include commentary on the big picture – whether the organization is winning or losing relative to its goals and objectives. Public recognition at such events should be given to organizational units that go above and beyond in their collaboration efforts to contribute to the broader success of the organization. While departmental celebrations and award sessions may be appropriate, leaders should ensure that there is always a link of the departmental achievement to the attainment of the larger organization goal – and use the opportunity to recognize and reinforce the desired collaborative successes of the team. Where possible, leaders should consider pairing up their departmental celebration with that of another department, again to increase contact and familiarity.

In summary, organizational silos develop because of how leaders manage the business, manage managers, and how managers manage the employees. By taking some of these deliberate small steps, the concrete silo walls will start to weaken and gradually transform into more flexible and collaborative departmental structures. Wishing you a successful transformational journey.

Larry Schruder is president and co-owner of The Delfi Group, Pembroke and can be reached at larry.schruder@thedelfigroup.com.