Organizational silos are a problem for large and small businesses alike. Unlike the silos farmers use to separate different types of grain, the organizational silos that separate different types of employees are seldom as benign. When employees interact poorly with people outside of their “silo,” it becomes difficult to do the work of the business. A tight-knit department that works well together can be a plus for a business. However, organizational silos can be like fortresses within a company and eventually cause serious problems that might not be noticed until the damage is done.

Organizational Silos

An organizational silo can be made up of people in one department, such as accounting or sales. A silo also can extend across departments to include similar worker types, such as administrative assistants or managers. Silos often separate higher-level employers from front-line workers, such as salespeople or production workers. Silos can be geographical, as in the case of workers in different offices squaring off against each other and the home office. An organizational culture that allows or encourages silos will see its information systems and data caught up in the syndrome, according to Evan Rosen writing for Bloomberg BusinessWeek

How Silos Form

Silos form when employees develop more loyalty to a group than to the employer. As silos solidify, members become more insular and distrustful of other employees or departments. Once trust disappears, it becomes increasingly difficult for groups to work together. Trust makes teamwork possible, and teamwork fuels the ability to keep pace with competitors, according to John Kotter writing for Forbes magazine. Companies can create environments that allow silos to grow and flourish. Lack of direction from the top regarding regular meetings and formal communication gives tacit permission for employees to form silos.

Effects

Organizational silos usually are resistant to change, operating to prevent easy access to the information they hold and throwing up barriers to change and cooperation. Silos make it difficult for communication and collaboration to occur across units. Each group works to protect its own interests. One unit might not tell another unit that customers are complaining about packaging, preventing the company from responding effectively to customer concerns. Groups might neglect to share information with owners and managers. Some silos use different forms and processes for the same business function or prepare similar reports without sharing or combining data. Rosen points out in the Bloomberg BusinessWeek article that organizational silos cause redundancy and poor decision-making. Silos also stifle creativity and innovation.

Solutions

The challenge with organizational silos is getting people to stop “protecting what is” and begin to embrace “what could be,” according to a Harvard Business Review article by Vijay Govindarajan on the HRB Blog Network. Managers are familiar with the usual refrain of “that’s the way we’ve always done it.” Govindarajan recommends focusing on innovation as necessary for survival, convincing employees to work together for a common goal and creating an innovation agenda around which all employees can coalesce. A committee charged with breaking up the silos can develop practices that require communication and collaboration. Increased communication from management and among employers will increase trust and begin to solve the problems.