Mention the phrase “organizational silos” to your work associates. It likely generates images and visceral reactions associated with poor hand-offs, misaligned priorities, lack of communication, turf battles, etc. While common, such experiences are not natural characteristics of organizing. Instead, they’re behavioral outcomes of choices made, or not made, in an organization’s operating model.
If you’re suffering from silos in the workplace, then the gold-standard solution starts by reviewing your current operating model. In the following article, I’ll highlight how design features create the operating context which gives silos their bad name.
A value chain is the sequence of activity your organization performs to create value for clients. The value chain conceptually and visually disaggregates an organization into strategic activities that support the development and maintenance of competitive advantage. The value chain also identifies the main work boundaries for the organization.
For example, the following diagram might form a basic value chain for an organization. We could call these boundaries silos, each one holding their own part of the wider value creation.
Following the value chain, organization structure defines how resources are held in an organization in such a way so as to best deliver company strategy. These choices reflect four policy areas of:
It’s beyond the intention of this article to describe each in detail. Still, one can see how choices made in each policy area will create additional boundaries between workers and managerial units.
Separation of work has important benefits. It allows for deep technical expertise to develop. It creates an environment for improved task performance. It offers opportunity for teams to have end-to-end responsibility over entire pieces of work. Separation also permits an organization to get close to its important customers and their requirements. It defines a possibility to automate recurring tasks and creates opportunity for career professionals. These numerous benefits are sources of value to most organizations.
Work in boundaries requires coordination. Otherwise, the boundaries themselves become the source of much difficulty. Their potential benefit is overwhelmed by the negatives of fragmentation: I become increasingly specialized and unaware of your needs and the big picture; I optimize my own domain and sub-optimize the whole; I fight to protect my resources; I don’t trust you and feel unappreciated for the burdens that I bear; and I personalize the blame and direct it toward you.
Most people do not recognize the influence of the system on their troubles. Left uncoordinated, organizational boundaries can threaten process hand-offs, communication, and the efficient flow of resources as well as the entire culture of an organization and its business performance. This is the source of negative associations with silos in the workplace.
Organizational Glue is a metaphor for mechanisms that reconnect the organization across its boundaries. At the simplest level, it consists of standard organizational processes. The benefits of glue mechanisms include efficient operation across organizational boundaries, increased capacity to stay abreast of environmental change and make quick, effective decisions, and freeing up top management to address strategic needs.
Galbraith defined organizations as “information processing units” and with this there is a hierarchy of glue mechanisms. As an organization moves up the hierarchy, it is creating more robust linkages while also adding cost in the form of management time, difficulty, and expense. At the low-end of complexity is organization process and the coordination of work through standard processes, goals, measures, plans, and reviews. This is working low in the hierarchy.
A different, much more complex way to coordinate work is through the development of a matrix organization. This is working high in the hierarchy and often represents a fundamental change in organization design. It adds significant expense in terms of designed conflict, people and resources, and the implicit cost of complex operations. Thus, an important observation is that various glue mechanisms have associated benefits and costs. An efficient organization will strive to work as low as possible in the hierarchy to meet its coordination needs.
Problems associated with siloed behavior are symptoms. The underlying problem lies elsewhere in the operating model. There are two well-known organization models that directly connect organization design features (i.e., the operating model) to both organization culture (i.e., how work is really done around ‘here’) and business results. The implication is that problems assigned to organizational silos are systemic. The problems will persist even if you change the “difficult” managers. The negative associations with organizational silos can only be sustainably addressed through good design.
The holistic and comprehensive approach to remedy “the silo problem” begins with a current state review. It looks at organizational topics such as structure, management mechanisms, social system, ways of working and culture, among other dimensions. It answers the question, “How fit for purpose is our current business model?” If your organization suffers from siloed behavior, this process will make its underlying causes clear. If you’re looking for a more modest place to start, a first step would be to look at the most fundamental elements of organizational glue: (1) standard processes, (2) common goals/measures, and (3) joint performance review.
Organization can’t exist without making explicit or implicit choices about work in boundaries. Problems arise, quickly, when differentiated and segmented work isn’t integrated back together into an operational whole. Partial solutions can provide some immediate relief. For complex environments or when the fate of the organization is in the balance then a more complete review of the operating model is advisable.
There is a nice quote on organizational life from Barry Oshry. He says, “The problem is not with us, and the solution is not to fix us. The solution is to see how, together, we can master this space of complexity and responsibility.” I believe he’s talking about silos.
Dan Schmitz is a Consultant at ON THE MARK. OTM’s experience and passion for collaborative business transformation that’s supported by pragmatism, systems thinking, and a belief in people is unparalleled. OTM has been in business for 29 years and is a leading organization design firm.