SeOver the last few weeks I have had several individuals express frustration about how their business was siloed or stove piped. This basically means that everyone works within their specific function and ignores everyone else. In fact, in one specific case, it had an employee considering leaving the company. Well integrated, high performing teams and companies cannot operate with this model. Today I am going to talk about the dangers of corporate silos to your business and offer a suggestion for a solution.
A few weeks back I talked about Team Integration. In that post, I discussed the importance of teams working towards a common goal. I feel this is important to keep everyone focused on the results, and helps people work together better. However, even when everyone in the company and the team is working toward a common goal there can still be corporate silos. This is evident with statements like:
- Don’t tell me how to do my job!
- What do you know about …
- Stay in your lane!
These are not a sign of a well-integrated, high performing team.
Companies operating in silos inevitably do not communicate well. Marketing isn’t communicating with sales. Design working independent of manufacturing. Accounting isn’t communicating with anyone. When communication breaks down, there is a lack of mutual trust and respect. Poor communication will cost your business money.
I have seen where a lack of communication has caused projects to overrun budgets by up to 200% or more. On a project I was working on, one engineer worked strictly in his own silo. He’d communicate weekly about what he accomplished. But the other engineers, who were using this design, would regularly find things that didn’t work. Why? Because they didn’t communicate effectively up front so that everyone understood the path forward. They all went about their tasks, and when the two were integrated, it didn’t work and there was a ton of expensive re-work.
Siloed companies are plagued with complexity. Why? Because they must add processes and procedures to everything to compensate for a lack of communication. Does this sound familiar? In these types of organizations, when something goes wrong like supply chain didn’t order the right parts slowing down manufacturing. Suddenly there is a new process for ordering parts requiring four or five signatures inevitably from people too busy and layers away from the actual work. Time is added to the process, and there are more questions which mean a longer process. Eliminate this with effective communication.
To add to the complexity, managers and leaders will start protecting themselves so they aren’t blamed for the delays. Infighting backstabbing and more bureaucracy can also enter in the picture.
Change your decision-making process. Include more communication. Develop decision making teams, at the appropriate level, that include a cross function of support. Any and all stakeholders should be included, and if they are not the meeting should be put on hold. Work all scenarios up front. Set expectations and make plans. Many times, especially on time sensitive projects, people just dive in and get started. While initiative is something that is admirable, jumping in without proper preparation is a formula for rework, exceeding budgets and missing deadlines. Create a culture where people work together, communicate with mutual trust and respect.
This Week’s Challenge
How is your company culture structured? Are there corporate silos and finger pointing, or communication based on mutual trust and respect? Are all stakeholders brought in for decisions or are people just told to live with decisions being made? Creating the right culture, and integrated culture, will dramatically improve your bottom line!
Give us a call for an assessment and consultation and see how you can start improving your bottom line.
If you would like to discuss more ways to help your business grow or if you feel you have a specific problem that needs to be addressed, please reach out to me.