Breaking Down Business Barriers

A Jack of all trades is a master of none, but oftentimes better than a master of one” – Robert Greene

Silos in organizations is a topic that is often spoken about and used. More often than not it carries a negative stigma with it although not all silos are inherently bad.

Si·lo (noun): a system, process, department, etc. that operates in isolation from others.

So how can isolation from others ever be a positive thing?

  • Creates efficiency through easy access for common thinking and communication
  • Built-in support system for employees within each department
  • Articulates clear lines of responsibility

There are also negative aspects of silos that can limit or prevent growth for an organization and their respective departments such as

  • “Us” vs. “Them” mentality
  • Minimal or zero collaboration between departments
  • Lack of cross-functional understanding

Companies are not the only place where silos have the ability to form. The Silo Effect, a book written by Gillian Tett, points to silos as having been a catalyst for the 2008 financial crisis due to the lack of understanding of potential risk caused by the system they created.

If your organization has silos there are two options that you can exercise to have effective collaboration across your entire organization.

  1. Remove the silos
  2. Have forums for proper collaboration and communication of ideas across silos

We have a few sayings at Prescriptive Profits and one of the go-tos is “good is good enough”. If your organization is running well and efficiently with silos, it probably isn’t worth the full overhaul of tearing them down. So for this, we’ll focus on the latter and speak towards what effective forums look like.

To gain a deeper understanding of the positives and negatives of silos, conceptualize a pencil factory where each floor is dedicated to a stage of production: lead, wood and the eraser are on separate floors, a fourth floor ties them altogether for final production and the fifth floor is for inspection and quality control.

Each floor operates well on its own and efficiently communicates within its domain. The negatives materialize when one floor starts to produce less than the others or if one floor becomes more efficient at producing their goods, creating an unneeded surplus.

The decision of one floor can impact another, or even all other floors, without realizing its true impact. This is where an area for collaboration and communication is needed between the different floors.

The two forums that we have seen be successful in siloed organizations are Quarterly Business Reviews (QBRs) and Project Management Offices (PMOs).

Now like anything else in life, in order for these to be successful, there are certain attributes that they must contain.

  • Tell the Real Story: QBRs are a chance for each department to inspect itself and then provide where they are doing well vs struggling, where they have opportunities vs risks, and most importantly WHY. Without the “why,” the collaboration between departments doesn’t transpire. Hearing how each business unit is attacking each significant issue it faces can help shed light on others who are most likely having similar problems.
  • Backed by Numbers: In today’s data-filled world, it is just irresponsible to have a story or provide any scenario or feedback without it being represented by numbers. If you currently do not have the capacity to measure it, there should be plans in place to be able to measure it before the next QBR.
  • Action Items: At the end, provide action items for each department to be measured against before the next review. These items should be how the next QBR is started for each individual department.

Project Management Office is another way to help siloed organizations collaborate and stay on target effectively. If you want to have an effective and efficient PMO, get these right:

  • Standard: Bi-weekly or at the most, monthly meetings that are set in the calendar.
  • Transparency: By providing a consistent progress report on how different developments are progressing within the organization, everyone has access to see who is performing well and who is falling behind. This transparency is also a wonderful form of collaboration as people can benchmark their progress against others and then dive into what makes each more or less effective and efficient.
  • Risks Identified: by highlighting the risks that are involved with each project, other stakeholders are able to think differently about their own, cross-pollinate ideas and collaborate effectively while also providing potential support to either mitigate or limit the identified risks

Silos in an organization are very common and take an enormous amount of energy, commitment and effort to tear down. Just like the pencil factory, it would be quite the remodel and renovation project to remove the different floors or you would need to find a whole new building. And the structure is just the beginning as policies, procedures and guidelines on how to work efficiently in the new environment would need to be established.

While completely leveling silos might not be the best business strategy for your organization, having effective ways to source and share information, ideas and best practices across departments is essential to run a highly efficient organization.

To add additional value, while de-risking your overall business, the best companies go a step further and invest in cross-training of mission-critical functions.

We’ll dive deep into cross-training during next week’s edition of Prescriptive Profits. And until then, we’ll leave you with this week’s quote again to hit the point home.

A Jack of all trades is a master of none, but oftentimes better than a master of one” – Robert Greene

Let’s get to work.