At the end of 2018, a study by the Boston Consulting Group,
conducted in seven countries with 2,700 business leaders,
stated that organization in work silos remained the standard.
But as Bob Dylan used to sing “The times they are A-Changin”
and so do generations. One notes that the silo defenders are
mostly represented by Generation Xers. They are familiar with
the verticality of decisions, well-defined structures with respect
for hierarchy. Their first wish is to compartmentalize their
employees, the data and the results of each department.
A silo organization can coincide as well with a search for the
sense of belonging. In Maslow’s pyramid, this needs appears
right after the primary physiological needs of survival, and
safety. Then one understands that the will to belong to a group,
to feel included is an important cause for the formation of silos
in business.
For many reasons, the appearance of silos is inevitable and can
become problematic for performance as communication
breaks down between the different cloistered groups, as it
were, in their tasks.
In 1999, the example of Sony (see box) is a perfect illustration of
the perils of organization in silos, such as competition between
departments. Within the same company, employees obsessed
by the success of their unit can completely overlook the general
interest of the company.
More generally, a structure in silos can lead to a
misunderstanding of the overall vision of the company.
By defending its own interest, each silo can sometimes work
against the performance of the business in the long term.
A typical example of this practice occurs when a silo were to
exaggerate its results so as not to have a budget cut respective
of another silo the following year.
Sony, the example not to follow
In 1999, the Japanese company Sony unveiled not one,
but two different digital Walkman units. Even if this double
rollout may have appeared premeditated, it actually was
the consequence of a huge lack of communication within
the different groups of the company. In effect, two
departments of the Sony empire had each developed their
own MP3 music player, without any coordination. None of
these silos could agree on a single product approach, nor
even communicate between them to exchange ideas or
agree on a common strategy for putting two
complementary models on the market, without risking
cannibalization between their two products.
The consequences have been irreversible. In a few years,
Sony had declined within the digital music world, opening
the way for Apple to dominate the market with the iPod.
Sony employees were so used to this working-in-silos
scheme that no one questioned internally the organization.
This catastrophe led the company to open its eyes to the
dangers of silos.
Why the need to decompartmentalize?
In the digital age, silos have no longer a reason to exist, and
“pyramidal” companies must make way for more agile
organizations. Data and information must flow freely and no
longer remain the preserve of a few, comforted in the illusion of
misplaced power. For several years, Mark Zuckerberg has been
saying that the era of privacy is over. The value of information
no longer lies in its retention or knowledge, but in the analysis
and the good decisions that result from it. The new generations
are moving the goal lines and are not ready to work without
understanding their actions and the meaning of their work.
Furthermore, the lack of communication and shared vision
towards a common goal can cause resistance to change.
Within a silo, employees are in a comfortable, immovable
structure in which backlash inevitably develops towards policies
that disrupt their environment.
In an increasingly complex and open world in which adaptation
and agile methods are vectors of success for companies,
maintaining rigid structures in silos is, on the contrary, a burden
that should be best eliminated.
Against the rigidity of the silos, the elasticity
of the ERP
To break up the isolation of the different groups formed within
the company, the first step étape consists in the promotion of
a shared vision. It is important that the employees understand
how their individual work contributes to the overall success of
the enterprise. A common vision involving the different silos
requires improved communication.
It is important, however, to help your collaborators by providing
them with the tools needed to exchange easily. ERPs enable, in
particular, the improvement of communication and to pool all
resources. These solutions create bridges to cross
organizational barriers. The Finance department must be able
to speak with the Logistics department, which, in turn, must
share information with Sales, who themselves must dialogue
with Production… In few words, ERP makes it possible to let
go of the everyone for themselves for the all for one: the
company. In the best possible long term perspective.
Before the integration of an ERP, FiveForty° invites its clients
to consider an organization in terms of project management,
by proposing to build in collaborative communication tools
such as Microsoft Teams or Slack, structured in channels
corresponding to the issues to be resolved.
FiveForty° is, as well a power for proposal for ticketing solutions
as Jira, Azure DevOps or Zendesk. These Cloud customer
service platforms comprise also ticketing functions, self-service
options and assistance. Generally, the challenge is to configure
as best as possible these tools to channel all the company’s
communications to facilitate exchanges, increase the agility of
the entirety of the teams so they collaborate in a more efficient
manner. Within the ERP tool, FiveForty° sometimes maps by
the thousands the whole of a company’s processes, by
department and by world region. The objective: to create
relationships between the dedicated teams who will work on
the project or will need project information. Make the useful
data accessible, without drowning it with the other pieces of
information that will surely be necessary to someone else.
How to leave silos behind?
• The management team must acknowledge the existence of silos and their negative impact on the organization. Instead of ignoring the issue, it must be discussed openly;
• When employees are only rewarded on the basis of their groups’ performances and those groups are competing internally against each other, it is very unlikely they will work together. This reward system should be avoided;
• To encourage social encounters. Create places and programs where people from different teams may get together and create bonds;
• Design physical spaces to channel people into the same area, thus forcing constant and unplanned interactions.
In conclusion, one can note that silos tend to form quite
naturally in companies. They are problematic when employees
do not have available the tools allowing them to exchange and
share in all transparency the information to the other
coworkers. ERP is the ideal solution to remedy to this problem.
This solution offers the technical tools allowing gains in
efficiency and directs the actions each department towards
the overall objective of the enterprise.
Sources :
IA : la fin du travail en silos (The end of work in silos) | Les Echos
Entreprise : la fin des organisations en silos et des structures pyramidales (Enterprise: The end of silo organizations and of pyramidal structures) | economiematin.fr
What Are Organizational Silos? Pros and Cons and How To Break Them Down | Indeed.com
How Silos Crush Innovation: Top 9 Lessons for Bursting Silos | nuturns.com
5 Ways to Break Down Organizational Silos | zapier.com
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