Collaborative Leadership Blog

The Silo Effect…and a Choice

In this IT company, business is conducted in silos based on functions and hierarchy. There is a high degree of competence in each silo, but when working across them, there are big gaps. People tend to “throw things over the wall”, hoping someone on the other side will pick them up. Usually they do, but not always. People in silos don’t talk with each other. They communicate through email even when they are down the hall. Service gaps get created. They don’t know each other except by their electronic persona. Politics tends to rein supreme. When people can’t get issues resolved, they “escalate” them to their bosses up the hierarchy. Distrust gets created. This approach tow work is time-consuming, inefficient and slow.

For example, the ordering process of R&D equipment in this company was so broken that a cross-functional team of 16 people had to be assembled to fix it. The 16 represented every function along the value chain, but had never met each other. They’d only heard about each other. After agreeing to some collaborative “rules of engagement”, they began the current state analysis. It became immediately clear they had no clue as to what the others did or where the breakdowns were. With collaborative ownership and full engagement, they built a high level of trust that enabled them to quickly design the new process, engage their customers, get their buy in, and implement a customer-driven ordering system that now delivers in 1/4th the time.

Collaborative, team-based organizations work. They build high trust, accelerate work, and go from reacting to crises to preventing them—because people own the work and the business.
Here are five dimensions of this approach:

• Principle-based: The key principle for a high trust, collaborative organization is ownership; people take care of what they own—they don’t wash rented cars
• Collaborative and Team-Based: Collaborative teams are formed to own business functions and processes; have clear operating agreements, charters, roles and responsibilities
• Take Down the Silo Walls: People have to work across groups to get work done; the silo walls need to disappear so they can. The shift is from horizontal to vertical
• Customer-Driven: Customers are in the driver’s seat around what they need and how they receive it. Business processes are focused on meeting those needs rather than silo wars
• Different Reward System: The reward structure shifts from individuals trying to please their managers, to teams being rewarded for satisfying customers

Siloed, hierarchical organizations do not work for the customer or the employee. They focus on power and control, are slow and inefficient, and often create dysfunctional relationships. Collaborative, team-based organizations, on the other hand, focus on building trust and ownership, work horizontally, are results-based and customer-driven, and produce relationships based on trust and mutual respect.