Silos create focus

‘Breaking down the silos’ is not about removing the organizational walls in a literal sense. Silos serve an important function. They allow your organization to focus. Silos create demarcation and enable groups of people to build up specialized competencies. These competencies can be a source of competitive advantage for the firm.  

Following Martin (2021) silos do this in two ways. First, they enable employees to learn faster and deeper by creating room to focus. A faster learning curve increases productivity in the tasks assigned to the silo. Second, silos concentrate resources on particular goals. Both points reinforce the execution of the tasks and goals. 

Organizations are systems of collaboration

The benefits of silos are all well. However, the challenge of compartmentalization emerges when we see organizations as systems. In a system, all the parts are interdependent and collaboration across the walls is crucial to keep the system well-functioning. 

One of Edward Deming's (1993) key insights was the implications to view organizations as systems of collaboration rather than as units that compete internally for resources. The latter approach is an invitation to systematic suboptimization. 

The competition fallacy

Few organizations will admit they invite units to compete. However, competition ensues if your organization conducts individual- or department-level performance reviews, and even more so if the incentive system is linked to those reviews. 

Digitalization initiatives are ripe with examples of suboptimization. Imagine a department, with the blessings from top management, introduces a new digital solution across the organization. In the department that procured and implemented the digital system, the new solution creates cost savings.

In the rest of the organization, the digital system leads to cost increases. The other departments are penalized by being forced to deploy more resources to handle the suboptimal functionality of the new digital system.

The entrepreneurial department wins, the other departments lose.

The intentions of such initiatives are well-founded, but due to the way we organize ourselves and fail to collaborate, the good intentions are lost in bad implementation. It is an all too familiar example of poor user involvement. 

Another source of suboptimization is outcome-based goals and targets: for the next quarter we should sell 150 units; have a maximum of 2% customer complaints; reduce sick leave by 1.5 days. 

Such targets will tend to overshadow other worthy efforts including collaborations across the organization. To reach the targets all sorts of creativity will be unleashed, not only of the good kind. Moreover, the cost of reaching those targets will often be ignored. 

For example, if a side effect of a particular strategy to reduce the number of sick days is a reduction in employees' morale, then the cost of reaching the proclaimed target is high. Sick days are measured, morale is not. A drop in morale is collateral damage. We fail to treat the organization as an interdependent system.

Win-win is built on collaboration

It does not have to be this way. Digitalization and other change initiatives can introduce win-win solutions for the entire organization. Collaborating across silos and having clear organizational purposes to guide effort can take us a long way. 

Instead of outcome-focused targets for individuals and departments, the organization can formulate plans of what it wants to achieve. A plan contains a step-by-step description of how to achieve a goal and shifts focus from outcome to activities. 

If everybody knows what and why the organization is trying to achieve, finding collaborative solutions to accomplish the objectives become more feasible. Employees on their own initiative can start addressing issues in a collaborative way. 

Collective intelligence to deal with complexity

Two persons who put their heads together to solve a challenge is an act of collective intelligence. In this sense, collective intelligence and collaboration are two sides of the same coin. 

More generally, collective intelligence is a process to integrate diverse information. The result is the emergence of new questions, predictions, insights, and solutions. Importantly, our collective intelligence helps to build bridges and create understanding across silos.

This is an important point as modern organizations are more appropriately viewed as complex systems (Meadows, 2008). Complexity arises because of the many functions in organizations that are diverse and interdependent. 

Complexity implies that no individual, whether in the frontline or the C-suite, can explain in detail the workings of the entire system. Complex systems can only be understood collectively. Consequently, if someone in power in your organization purports to have all the answers, the red lights should be blinking.

Mindpool helps to connect silos

In Mindpool, we are convinced no one understands better the functioning of the system than the people working in it. This is a core insight behind the Mindpool engine.

Now new functionality in Mindpool takes a big step further in connecting the silos throughout the organization. A new dashboard provides a feedback loop to the employees, so everybody gets insights about the entire organization. This has three clear benefits:

First, it creates awareness about the organization as a system among all employees. Seeing issues and developments in other parts of the organization reminds people they are part of something bigger than their own department. Myopia diminishes and the widening perspective fosters a collaborative mindset. 

Second, it sparks new connections across silos. People become aware of issues in other parts of the organization of which they might see potential solutions. Often the solution lies in collaboration between departments, sharing relevant resources and know-how.

Third, it creates accountability. Awareness of challenges makes people step up, start asking questions and try to figure out how they can contribute to solutions. 

A vote for collective intelligence is a vote for collaboration. Collaboration is the best way to connect the interdependent silos, produce engaged workplaces, and, not the least, achieve extraordinary results. 

References

Edwards Deming, W. (1993). The New Economics for Industry, Government, Education, Massachusetts Institute of Technology Center for Advanced Engineering Study, p. 44.

Martin, Roger (2021). Strategy and [Re]Organization: Walls Don’t Disappear, They Just Move. https://rogermartin.medium.com/strategy-and-re-organization-dcb00b4c5923
Meadows, D. H. (2008). Thinking in systems: A primer. Chelsea Green Publishing.

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