What Do Silos Mean in Business Culture?

In a small business, the owner or manager manages employees according to the rules and routines that define its organizational structure. If there are many rules, then she will manage employees very formally, ensuring those rules are followed and the culture is very orderly. If there are fewer rules, employees enjoy a flexible culture. The formal culture with strict rules is more likely to have the cultural problem of silos.

A silo mentality can occur when a team or department shares common tasks but derives their power and status from their group. They are less likely to share resources or ideas with other groups or welcome suggestions as to how they might improve. Collaboration in a business culture with silos among teams or departments will be limited, unless collaboration benefits the members of the department. In addition, the members of a silo tend to think alike. They get their power from association with their function and their shared technical knowledge.

It is the business owner who permits a silo mentality to develop in her small business. As the top manager, she establishes a tone and a set of values for the business culture. She gives approval to employees who seek to protect their team's territory. She sends signals to others that a silo mentality can exist successfully in the culture. She can reinforce silos in her business culture with an "all-or-nothing management style" or promote collaboration with a team-building, inclusive management style.

There are a few sources of the silo mentality that will affect a small-business culture. Some employees will be assigned to work in a business function, such as sales or marketing, and will approach their work with the mentality of being a sales or marketing person. Others learn the silo mentality from the owner or senior employees or embrace a mindset that something related to another business function is not their job. Still other employees bring an attitude focused on their special field of business knowledge into the company when they're hired.

The structure of a business itself, or the jobs that employees do in relationship to one another, can foster a silo mentality. If a business owner sets up her company into dedicated business functions and does not establish meetings, training sessions or policy-planning sessions that bring people from different departments together, they will stick to their roles, which can produce closed-mindedness. Customers, competitors, technological advances or government regulation may force a business culture to change its silo mentality, according to Vijay Govindarajan, a Harvard Business Review Blog Network blogger. However, change must still come from the business owner. A business owner must plan team-building and information-sharing strategies to help employees think more globally. The employees also need an incentive to work together, such as a new project that offers a financial reward for interdepartmental collaboration.