Does your company have a silo mentality?
By Graham Winter | thebigchair.com.au | 19 September
Have you ever wondered why Australian businesses spend millions of dollars on leadership development, team building, strategic planning, restructuring and project management training and yet you still see:
- turf fights between functions that affect customer service
- cost overruns on initiatives
- slow introduction of new product and
- duplication of processes?
Interesting, isn’t it? Even with all that investment (not without value, of course), thousands of Australian organisations irritate customers, frustrate employees and lose countless opportunities because of one simple reason: they don’t think and act as one team.
Take a quick read of the newspapers: Gail Kelly committing Westpac to a post-silo era; Optus trying to get engineers and marketing to collaborate across silos; state and federal governments are arguing endlessly over water rights inside their boundaries while the River Murray dies.
There is no doubt that silo busting is on the agenda for many CEOs. But is that really what they mean or need?
By consulting with and studying many national and international organisations in both the private and public sector, our team has identified an alternative to demolishing the silos. Our approach looks a bit counter intuitive, but it works.
Following are five of the most powerful insights and lessons we learned. They might be of interest to you if silo thinking and silo behaviour is holding back your business:
Don’t dismantle the silos.
People get a lot of value from being in silos. There is more control, sharper focus, less complexity, specialisation and a sense of identity. Organisations move naturally towards silos, and some of the best businesses have what you could call ‘silo structures’. Think Wesfarmers, Rio Tinto and GE, to name a few. Our experience shows that the problem isn’t the silo structures themselves it is the capacity of people to foster and sustain teamwork across the boundaries of those silos.
Lesson one: leave the silos alone and invest in developing teamwork across boundaries.
Clarify missions — define superordinate goal.
A case example: one of Australia’s leading credit unions had major silo issues between sales and credit functions. All of the requisite symptoms were there: frustrated customers, poor communication, slow processing, unresolved problems and lost business. The solution wasn’t to create one department, but to define the missions of sales credit and then find a superordinate goal that the departments could achieve together. Six months later, with attention focused on developing those teamwork-across-boundaries skills, the company has the loan-processing turnaround at best- practice levels, credit staff have come down from head office to coach in the retail branches, and managers are collaborating to tackle problems that have been unresolved for years.
Lesson two: first give silos their own identity and then seek the superordinate goal.
Forget planning — start problem solving.
Common sense says that the way to rid companies of silo behaviour is to get people to plan together, but if it was that easy, every executive team would operate like a well-drilled rowing eight. In an assignment with a manufacturing company with sites on every continent except Africa, we found that one thing more than anything else got people to work as a team across physical and cultural boundaries: collaborative problem solving. Put simply, nothing drives people back into their silos more quickly and effectively than unresolved problems, and conversely nothing brings people out of their silos more quickly and effectively than tackling problems together.
Lesson three: planning helps, but successfully tackling cross-functional problems is what really punches holes in silos.
Ditch the SLAs.
Service level agreements suggest that you are either a customer or a service provider. But life isn’t that simple! You might get a group of strategy consultants to restructure your business as a perfectly flowing one-way line from supplier to customer, but that is an ineffective strategy if there are people involved. Why? Take the example of a mining company that streamlined a large number of its head-office functions. The streamlining created status wars and led to loss of production output, but fortunately it did reduce purchasing costs. (Another great example of how the silo wins and the business loses!)
SLAs ignore the reality that for anyone (other than a basic vendor) to successfully provide a service to a customer, that customer has to provide a service to them in the form of clear specifications, feedback and collaborative problem solving. The mining company now has what we call ‘partnering agreements with teeth’, and everybody is winning.
Lesson four: you can’t be just a customer or just a service provider if you want teamwork across boundaries. It’s about partnering, not serving.
Make ‘one team’ the umbrella.
In 2000 I had the privilege of being chief psychologist for the Australian Olympic team. We had an umbrella principle of ‘One Team’ supported by ‘spokes’ such as excellent logistics support, medical services, coaching and athlete development, communications, athlete support services and a set of core values. Each individual sporting team (silo) worked under that umbrella because it created an environment in which success was almost inevitable.
Lesson five: make ‘one team’ the umbrella principle that integrates everything else in your business.
A final thought
When we set out to tackle the silos, we expected it to be a demolition job. But while working with companies in sectors from mining to manufacturing, banking to consulting, government to Olympic sports, we found a new weapon: teamwork across boundaries.
Ironically as organisations created a ‘one team’ umbrella, replaced the SLAs with partnering agreements with teeth, practised collaborative problem solving and found those superordinate goals, they found that it wasn’t the silos that were causing problems — it was an inability to open the doors and windows so people could work together.
Graham Winter is author of the recently released book think one team: An Inspiring Fable and Practical Guide for Managers, Employees & Jelly Bean Lovers, and a consultant specialising in teamwork across boundaries. think one team: An Inspiring Fable and Practical Guide for Managers, Employees & Jelly Bean Lovers is published by Jossey-Bass Australia, RRP AU$24.95, and is available now from all good bookstores. Visit the website at thinkoneteam.com
