Think It’s Only Big Companies? Think Again!
It was ironic. I was developing training for a company on how to have difficult conversations and create more collaboration when an employee sent me an anonymous email.
Let’s Shoot Growth in the Foot
He explained the mid-sized business served a single industry. Its divisions offered different products and services that could be vertically integrated with the others or offered on their own. Each division had its own P&L responsibilities, goals and incentive program.
Here’s the rub. There were times when one division needed information from another to quote on a larger job. However, the bonus structure only recognized the division that got the contract. Which meant that any others that helped the first division win the client didn’t see a dime.
The result? Divisions didn’t return each other’s calls or emails on new business opportunities. They needed to focus on prospects that would improve their results and meet their goals.
This was hamstringing revenue and profit. Divisions would lose opportunities when they couldn’t get information fast enough from a sister operation. To avoid this, often they had to work with outside companies rather than keep it all in-house.
That’s the tell-tale sign of an organizational silo. People have loyalty to their area and aren’t interested in the company as a whole.
Us Versus Them
Leadership unintentionally set these divisions at loggerheads. What started as a simple way to organize the business, measure results and reward employees became a disincentive to growth.
This also pit the divisions against each other during budgeting. Each business leader and his people (yes: they are all men) saw themselves fighting for what they needed to reach their goals and resented the others for taking what should have been theirs. No wonder no one wanted to talk to anyone else!
“That Doesn’t Happen Here!”
This company was experiencing the law of unintended consequences. Maybe yours has avoided those landmines. But PwC’s global survey indicates that 55% of companies have siloed teams. So chances are good you haven’t noticed or sidestepped all of the many causes of communication silos:
- Geographic distance (are they in another time zone or country?)
- Different physical spaces (are some of them more coveted than others?)
- Management styles (is one leader is hands-off and another very controlling?)
- Security issues (how safe do people feel about raising risky topics?)
- Management priorities and the cultures they support (is one area focused on bonuses and another on customer satisfaction?
- Multiple systems and platforms (do they all communicate so information is transparent and shared equally?)
- Policies and procedures (are these uniformly implemented throughout the organization?)
- Size (do the larger areas get more resources whether or not they’re productive?)
- Approach to promotions and bonuses (are these more subjective or objective?)
- Philosophy on sharing information (are people outside of an area informed about the progress in another?)
- Willingness to trust (are others welcomed or viewed with suspicion?)
- Open mindedness (are new ideas given a fair shake or has “we’ve always done it this way” become entrenched?)
- Cooperation (how willing is one group to communicate and work with another?)
(Click here for a one-page reference: 15 Common Communication Silos Checklist.)
Here’s the truth: all of this is contagious. When a silo effect happens in one part of the business, it quickly spreads to another. Or your area reacts to a situation and creates its own silo in return.
Lead with Your Eyes Open
Yes: some silos are good. You need specialists working together to create new products or services, for example, rather than everyone doing everything—and nothing getting done.
But as a leader, you need to know two things.
- Why are we doing things this way? The president of that mid-sized company certainly didn’t arrange the bonus structure to restrict sales and discourage cooperation.
- What can I do to lead a unified organization? While the president referred to the overall company by name, he hadn’t noticed no one else did. They identified themselves with their division.
There’s plenty of research out there showing people want to be a part of something larger than themselves. If you’re not showing them the greater purpose your entire organization serves, then they’ll settle for loyalty to the department where they work. And, in the long run, the silos they create and reinforce will work against you.