It’s natural for organizations to be compartmentalized, but to pull off radical technological change, bridges are better than barriers.
In business, silos are everywhere.
A staggering 79% of knowledge workers report silos in their organizations, adding that communication outside teams is poor, according to a 2022 survey conducted by Forrester Consulting and commissioned by Airtable called The Crisis of Fractured Organizations.
Silos are organizational groups that work independently of each other, with little communication and cooperation and, often, some level of competition and negative behaviour between them.
Many of the people I speak with who are engaged in digital transformation see silos as a significant barrier to change, and they speak about this with passion. They should. Digital transformation relies on cross organizational change to be successful.
I’m here to help. As the author and instructor of the Watspeed Digital Transformation Certificate Program at the University of Waterloo, I’ve studied organizations big and small to learn how to undertake digital change—and how to break through the silos that inhibit it.
The good and bad of organizational silos
Most organizations are divided into groups that can be effectively managed. In these silos, expertise can be developed and shared, responsibility and accountability can be clearly defined and group loyalty can create a secure and supportive environment for employees.
But silos can also negatively impact their organization. They limit the willingness of employees and managers to share information with others outside their silo. This lowers morale and encourages employees to advance the interests of their silo above those of other silos and/or the organization as a whole.
Silos exist due to organizational structure, culture, performance management and the behavior of the managerial team. A culture that emphasizes competition between silos is often used to drive performance improvement. Where a competitive approach is used to manage the senior leadership team, it is reflected throughout the organization.
Silos have been recognized as a challenge in organizations for many years. Before our current age of rapid technological change, cross organization collaboration was less critical. Slowly changing products and services, more stable markets and long-established processes can be managed in the presence of silos. The organization can function reasonably well if the silos focus on their own performance, mostly in isolation from everyone else. Where silos interact, standard processes exist that enable the organization to function despite the reluctance to cooperate.
However, as the speed of competition and change has increased, silos work against businesses that want to keep up. Efforts to improve processes, to focus more on customers, to introduce new operating system models (such as agile or lean) and to become more innovative have been hampered by silo structures and cultures.
This is particularly true for digital transformation projects.
Silos and digital transformation
Changes in products and services can have an impact in many places—marketing, sales, operations and finance, to name a few.
These silos must work more closely together to respond to rapidly changing markets and customer demands. Process changes in one part of the organization will often have implications beyond the silo where they were introduced. New business models will often require radical organizational change that won’t succeed if people can’t work together in the interest of the whole organization, not just their own silo.
It is crucial to empower individual employees to realize digital transformation. Employees must actively participate in this change, but if they’re stuck in silos, they’ll support the interests of the silo over that of the organization.
Overcoming the challenges of silos is essential in this era of digital transformation. But how can you do it?
How bad is your silo problem?
The starting point in fixing your silo problem is developing a good understanding of the silos in your organization. At the University of Waterloo, we have developed a tool for our Watspeed Digital Transformation program that helps you analyze your silos. This simple exercise will help you understand if silos are holding back your digital transformation.
Score each of the following statements on a 0 – 5 scale, with 0 indicating that it does not apply to your organization and 5 indicating that it is widespread:
| Score 0 – 5 | |
| Communications are open and frequent across the entire organization | |
| Employees are fully engaged with the organization and highly motivated towards its success | |
| Groups, departments and functions have good relationships and work effectively with each other | |
| The goals of all parts of the organization are well aligned with the overall organizational goals | |
| Most data in the organization is easily available and open to all | |
| Everyone understands and believes that the satisfaction of the customer or client is paramount | |
| Processes are smoothly integrated throughout the organization | |
| Where possible, everyone uses the same technologies to do the same things in the organization | |
| There is no competition between different groups, departments and functions in the organization | |
| Employees can easily find all of the information they need | |
|
Total |
x/50 |
Low scores in this exercise indicate that silos are a problem in your organization. High scores suggest that silos are not holding back your digital transformation.
What can you do to break down silos?
If silos are inhibiting your ability to digitally transform, here are some things you can do to break them down:
Create a common vision: Aligning the whole organization behind the same digital transformation vision is essential for empowered employees to contribute towards it. Establish clear processes for engaging people in creating it, updating it and understanding it.
Use collaborative tools: There are many collaborative platforms that enable people to work more easily across organizations today (such as Microsoft Teams). To be effective, employees need to be trained in their use and standard processes for collaboration must be established.
Shared accountabilities: Performance management systems need to encourage collaboration rather than competition. Where possible, create shared accountabilities that cause people to work together to achieve them.
Bring people together: Establish a program that helps people to work with and get to know others in the organization, establishing relationships that will enable future collaboration. This might include social events and gatherings.
Leadership behavior: If leaders are seen to compete negatively with each other, often reflecting that in their communications with their teams, it will be reflected in the organization. If the most senior leader encourages this, it won’t change until they stop doing it.
Training: Conduct training that crosses boundaries, providing understanding of the organization beyond silos. and include people from multiple silos in each session.
Clear processes for collaboration: Collaboration rarely happens automatically. Consider where your problems with collaboration between silos are greatest and establish formal processes and practices that improve it.
Value stream mapping: Map organizational processes and address the weaknesses in process connections between silos.
Culture of transparency: Insist on openness and sharing of information throughout the organization.
Single source of truth: Technology makes it easier to establish a single source of data truth in the organization, which will create a common basis for decision making and reduce potential for conflict.
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Peter Carr is the author and instructor of the University of Waterloo Watspeed Digital Transformation Certificate Program, available globally online, and focused on overcoming the challenges of successful technological change. The program is jointly offered with the Ontario Society of Professional Engineers.
