Silo thinking: The divisional dilemma in companies

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It's us against them - this mentality is widespread in silo thinking. Because there is no company-wide collaboration in this phenomenon.

Instead, each department works on its own, and there is hardly any exchange of ideas between different teams. However, such isolation thinking can stand in the way of a company’s success considerably. 

This is what we at tractionwise encounter from time to time with our customers, for which we develop solutions to overcome silo thinking. 

Silo Thinking: A short overview

Table of Contents

What does Silo Thinking actually mean

Silo thinking describes a certain mentality that can prevail in companies. Each department focuses only on its own activities – other areas are often dismissed as irrelevant or incompetent.

Basically, it can be said that silo thinking is the opposite of collaborative work across the entire company. By compartmentalizing, divisional thinking inhibits the collaborative search for the best solutions. Communication and the corporate climate also suffer from this form of working – because one department simply wants nothing to do with the other.

These typical phrases help you recognize silo thinking:

  •       “That’s not our responsibility.”
  •       “That’s what sales does in our company; marketing has nothing to do with it.”
  •       “We can’t continue to work because the other department can’t get their problems solved.”
  •       “Departments A and B basically have nothing to do with each other at our company.”

Interesting to know:
This is a general group psychological phenomenon that can also be observed outside the business context. One's own group (ingroup) - in this case one's own department - is experienced as a cohesive unit and perceived positively. The other group (outgroup) - i.e. other company departments - is not part of the "we-feeling". It is therefore not uncommon for the outgroup to be devalued. "They don't have a clue anyway!" - is a classic phrase that is often heard when talking about other departments.

Silo thinking: these are the causes behind it

The formation of silos in a company does not happen suddenly. Rather, it is a process that takes hold of an organization insidiously. If there were once problems with different teams working together, the likelihood that they will join forces again in the future decreases. But other causes can also encourage working in silos.

In many cases, the company and departmental goals simply don’t match. For example, the company is aiming to cut costs in order to compensate for losses incurred. The marketing department, however, has set itself the goal of launching a major campaign to sell more products. If there is no transparent communication between the two parties, it is easy for different departments to work at cross purposes.

Similarly, too much specialization can result in silos. If the departmental boundaries are strictly drawn according to specialist know-how, there is no view of the problems and possibilities of other disciplines. What seems like a good idea at the sales level may not be implemented by production in practice.

Moreover, a competitive mindset prevails in many companies. Resources and budgets cannot usually be allocated to all departments to the same extent – so people fight for their own silo before another area snatches something away.

The opposite of team spirit: Silo thinking vs. innovation

Operating in separate silos does not remain without consequence for the company. The working atmosphere often deteriorates. The individual teams isolate themselves, competition prevails. Envy and resentment often spread. The result: poor communication and inefficient work.

This is how silos also hinder innovation. After all, interdisciplinary collaboration is often required to produce innovations. But silo thinking is the not-invented-here phenomenon. This means that an idea is considered worthless as soon as it does not come from one’s own team. Departmental thinking therefore leads to innovation potential not being fully exploited because of interface problems.

As a result, silo thinking is also expensive and time-consuming. This is because compartmentalization makes processes take longer, and profitable cooperation is not possible. Many areas plan with incomplete information and sometimes have to repeat work steps several times. The organization of projects is slow – efficient work is not like that.

Breaking down silo thinking: This is how cross-departmental work is made possible

Departmental silos hinder the success of a company. But how do you now manage to dissolve the existing silo structures? This is a restructuring process that takes time. Entrenched behavioral patterns cannot be broken up overnight. Nonetheless, management can initiate some organizational changes that will ultimately enable innovative collaboration without silos.

Get an overview of the current situation and set goals

First of all, it is important to focus on the current situation. To do this, ask the following questions:

  • How is our organization currently structured?
  • Which departments work together, which do not?
  • What are the barriers to goal-oriented collaboration?
  • What communication patterns make cooperation difficult?

It is vital that the aim is not to point accusingly at individual employees or teams. Rather, the goal is to obtain a comprehensive picture of the current status in order to subsequently select appropriate measures.

Then, cross-departmental goals should be set. In the process, the benefits for the various stakeholders can also be worked out. This increases motivation and willingness to achieve the common goal.

Once these foundations have been laid, the next step is to identify specific measures that will help break down silo thinking. As many employees as possible should participate in the interventions so that the change in thinking can begin among all those involved.

Interdisciplinary teams as key to innovations

Putting together interdisciplinary teams is a good way to blur departmental boundaries. Employees from a wide range of areas come together to work on a project.

Each team member brings a different expertise and a different view of certain problems. Communication and knowledge sharing is essential to find the best solution. The goal is for employees to learn to put themselves in the perspective of other disciplines. After all, those who truly understand the concerns and goals of others will also take them into account when making future decisions.

Conflict management: ending disputes with mediation

Things get more difficult when silo thinking leads to deeper conflicts between departments. Once people start to dislike each other, working together cooperatively is not so easy. A conflict management strategy is therefore needed to bring colleagues back together.

One option would be guided mediation. This brings together the conflicting parties and a neutral mediator. The employees themselves look for a solution to their conflict – the mediator only intervenes if he can strengthen mutual understanding as a result.

A case study: Ms. Muller makes a decision in the marketing department that she believes is the best for the company. However, she is missing important information, so her decision causes some problems. Mr. Schmidt from sales is angry. How could such a mistake happen to her?

Furiously, he goes to her and gives vent to his anger. Ms. Muller feels she has been treated unfairly and wants nothing more to do with Mr. Schmidt. Mrs. Muller and Mr. Schmidt are now to work together on a future project so that marketing and sales are once again pulling in the same direction. However, the old conflict has not yet been resolved, and the mood in the team is therefore tense and unproductive.

At this point, mediation is advisable. In this process, both sides can disclose their reasons for their actions and gain understanding for the other side. After the discussion, the two sides meet again with respect at eye level and can work together productively on the new project.

Job rotation: Seeing the company from a different perspective

Conflicts, however, are not always to blame for the lack of understanding of how other departments work. Often it is simply a lack of knowledge about what other employees do. This is where job rotation can help.

This involves colleagues joining new teams from other departments. They occupy different positions and take on a wide variety of tasks for a period of time. The goal is to gain a deeper understanding of challenges and opportunities in different work areas. Whether the role swap lasts only a day, a week or even a month always depends on the company structure.

This is because job rotation is not an inexpensive undertaking. Employees have to be trained in the new areas and are absent from the old post. In addition, this procedure is not sensible at all levels. Management should think in advance about which employees are allowed to get a taste of which departments in order to achieve the greatest added value.

One example: Ms. Baker is new to the company. She is an expert in customer-centric work and is therefore expected to take care of customer loyalty in the future. But for this to succeed, it is important that she first gets to know the different areas of the company. Because she can only do her job successfully if she understands the processes from development to production to marketing.
That's why she spends two days in each of the different departments. She looks over the employees' shoulders, asks questions and learns about the challenges that the individual departments are struggling with. Now, when she plans projects with customers in the future, she knows exactly which department to ask for help and when, and how collaboration can succeed ideally.

More effective reward systems for improved cohesion

As mentioned above, the old reward systems also contribute to competitive thinking between departments. It often happens that only individual departments are praised when a goal has been achieved – even though many more departments have worked on it in the background. This approach encourages envy and can end in a battle for attention.

A more sensible approach is to create cross-departmental reward systems. The decisive factor should be who has contributed to the achievement of the corporate goal and to what extent. If several employees from different departments are involved, this success may also be celebrated together. This strengthens the feeling of togetherness and at the same time sends the signal that commitment can pay off for each individual – regardless of their own department.

Dissolving silo thinking through networking: Corporate Wiki and Social Intranet

Uneven knowledge levels are a frequent consequence of silo thinking. Department A keeps its knowledge to itself, which makes work for department B unnecessarily difficult. It therefore makes sense to create a common knowledge location that all employees can access.

This is precisely what a so-called corporate wiki is. The wiki is a knowledge repository for the entire company. Requirements, guidelines and ideas find a central place here. If there is any uncertainty, team members simply take a look at the wiki and then continue working with this information.

The social intranet pursues a similar goal. This is an internal social medium for networking. On the one hand, it simplifies interdepartmental communication. But the social intranet also simplifies collaboration thanks to tools such as digital whiteboards and voting options.

Strengthen identification with the company

This last point seems quite trivial, but it is nevertheless very important: The more employees identify with the entire company, the less thinking takes place in silos. Because then colleagues feel they belong to the entire team, not just to their own department.

Achieving this kind of corporate cohesion is possible through a coherent corporate identity and joint events. Events such as Christmas parties should not only take place within departmental boundaries. Managers should give employees from different departments the opportunity to get to know each other. In this way, future collaboration is facilitated and silo thinking is eliminated.

Bye-bye silo thinking: the company as a unit

Silo thinking defines the phenomenon that each department represents a self-contained team and does not want to know anything about other areas. That not only makes cooperation more difficult, but also often results in wrong decisions due to a lack of information – the success of the entire company is hampered in this way.

Therefore, it makes sense to invest in measures that put an end to silo thinking. Interdisciplinary teams and cross-departmental collaboration facilitate innovation. The holistic overview ensures that concerns and challenges from different areas can be taken into account. In this way, interfaces between different departments enable efficient collaboration.

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André Wehr

André Wehr

About Me

Being a founder and entrepreneur, I witness the importance of customer centricity for companies on a daily basis.

Incorporate the essential perspective of the customer into your product genesis and marketing processes. This is what puts horsepower on the road and keeps your project up and running.

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