Monday, August 3, 2015

Three Practices to Overcome Corporate Silo Mentality

With silo mentality, organizations lose their collaborative advantage as they are being over-managed and under led.

We have transitioned from an industrial to knowledge, innovation, and hyperconnectivity economy - with this shift has come to a change in organizational forms away from the traditional rigid hierarchies managed through command and control to more fluid and responsive network forms. Yet many business managers still apply old silo management mindsets to new ways of organizing and this legacy of the old economy limits many 'networked' organizations. Are silos a mere product of organizational design? Or is their nature tied to a deeper level: the humankind's nature? Despite the mountain of evidence pointing to the detrimental effects of these silos, they still seem to be quite common in organizations. The question is: why? In today's volatile economy, nothing impedes progress more than protective silos which are simply a form of bureaucratic amorphous mass designed to preserve the status quo. How does one eliminate bureaucracy? What would be some ideas to assist in breaking down silos in an organization where they are present?

Leadership innovation practices: A lot of organization’s reaction to the silo mentality goes back to leadership and trust. Silo mentality is a common challenge for lots of organizations. It is not structured, but the behaviors and attitudes of the leadership teams, and lack of strategic and team objectives and rewards that drive this mentality. If there is a high level of trust within the upper rankings of management, this will be conveyed through their actions and directions to those within their own work unit. If all of the upper-level management is engaged and focused on the same institutional goal and plan, they will be able to move forward in the same direction. By sharing the same vision, trusting that adjacent and support departments are all capable of completing their portion of the goal, and being able to coordinate and communicate effectively across departments, you can attempt to increase the performance of those members within each silo for the overall goal. Once a breakdown of trust or communication occurs, you begin to see each silo become more decentralized and self-focused. When leaders of an organization place an emphasis on building a culture of cross-functional collaboration, the opportunity for silos to work against the alignment of all departments towards the goals and objectives of the organization is diminished. Having leaders of respective functions to interact in a structured setting on a consistent basis goes a long way towards eliminating the silo mentality.

Collaboration practices: Creative collaboration via integrative diversity can overcome silos. Silos are inevitable in every structured organization. Silos are a method of containment and storage: bounded groups or insular tribes are evidence of silos, and silos are reservoirs for homogeneous thinking, limiting the organization's creativity and innovation. It is the responsibility of the leaders to initiate his or her team to break the silos to realize the common goals or strategy which are far more important than the personal and departmental goals. Fostering collaboration is the key to creating a seamless organization when in pursuit of a strategy. There are negative conflicts when the organization has little collaborative competency; and when they integrate, there is more potential to innovate and create value, more so when the collaborative competency of the organization is strong. Diversity is the key to innovation and growth in organizations, and only converted into value when it becomes integrative diversity - Silos are the opposite spectrum of integrative diversity and limit the organization's potential. Identities and differences are the sources of creativity although insulating them within silos contains this potential. Silos don't seem to fit within emerging 'networked' collaborative organizational forms, and if they are being reinforced, their existence is perhaps a legacy of old management thinking applied to new ways of doing - the result, higher risk of conflict and inertia, not something organization's want in a global marketplace that demands innovation, speed, responsiveness, and flexibility to succeed.

Outcome-based measurement practices: When you measure the end and not the means, the silo walls will become retractable. The problem stems from the way outcomes are being measured. When the collective outcome is the focus, the silo walls collapse. When individual and departmental outcomes are measured, the walls go up. In other words, what are the organization's rewards and recognition structure perpetuating? Differentiated performance metrics and rewards systems tend to bring this shift in perspective about, but they too are a necessary aspect of how an organization operates -- until they become counterproductive and have to be changed. So the effective scenario to break down silo includes following steps:
-Help staffs understand the priorities, perspectives, and strengths of people from other parts of the organization.
-Raise everybody's level of accountability.
-Ensure customer and strategic focus, if managed properly.
-Drive innovation that is relevant to the bigger picture.

In essence, with a silo mentality, organizations lose their collaborative advantage as they are being over-managed and under led, remain disconnected, hoard knowledge and power within silos, and do not have the competence to collaborate in the long term. There is no such thing as a perfect organization. Rather, the best organization is one that transitions from one form to another in order to adapt to the changes and improve organizational maturity from efficiency, effectiveness to agility.


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