The Excellence of Silo: Is It the Building Block or the Roadblock to Achieve Digital Excellence

Digital paradigm means holism, hyperconnectivity, interdependence, integration, and harmonization. 

Silo is perhaps one of the most paradoxical symptoms in running the business in the industrial era. There are different definitions of the silo, by nature, it’s about isolation. The segmenting or sectioning of work by knowledge, skills, or type, etc, it is a necessary component of complex work or large workplaces. However, silo often causes miscommunication and reduces a sense of belonging and connection to the organization's larger mission. As we are stepping into the hyperconnected digital new normal, business leaders need to ask themselves and others: Is the excellence silo the building block or the roadblock to achieving holistic digital excellence?

Is silo still efficient? The functional silo in the traditional organizational setting brings a certain level of business efficiency. Good functional leaders share just enough 'outside the silo' to keep them involved and invested in the greater purpose or vision, but not too much that it slows them down on what they really focus on doing to maximize the silo tasks and objectives. However, the symptoms such as silo thinking or bureaucracy caused by overly rigid hierarchy become the roadblock for organizations to achieve the next level of business performance or make the business solution less optimal and sometimes a burden. Therefore, the digital nature of hyper-connectivity and interdependence makes it inevitable to break down silos (not just functional walls, but the walls at the mindset level as well) and ensure the business as the whole is superior to the sum of pieces. Silos self-perpetuate because that is the business culture we consciously encourage individuals to pursue. Silos have individual goals, but strategic goals need to be shared and common to ensure the entire organization accomplishing the high-performance business results. Sometimes we need to go back to basics, realign and refresh the purpose and maintain the correct direction of the team's basic leadership. Business leaders need to ask: Who are the ideal talent to bridge silos or functional gaps? Organizations hope they actually have a generalist who rises up can interface effectively with all the specialists. But the world is increasingly complex and fast-changing the need for specialization is likely to increase. So the point is that the greater specialization does not need to lead to silo thinking or working. The specialized generalists with interdisciplinary knowledge and expertise are in demand to bridge silos and contribute to cross-functional communication and collaboration because today’s digital business is always on and hyperconnected.

Can you strike the right balance between centralized and decentralized efforts: Digital means the increasing speed of changes. It means that the management needs to challenge convention and break down silos as well as people’s natural resistance to change or to new ideas; and helps to deliver incremental improvements over time. Forward-thinking organizations also keep tuning their organizational structure for improving business effectiveness and efficiency. Often, centralized or decentralized business capabilities are the perpetual dilemma as paradoxically. Companies migrate back and forth between centralized efforts and decentralized efforts for exploring the better way to operate and collaborate. It always depends on several factors like the firm’s culture, strategy, budget, maturity and so on. Limited hierarchy works best in a creative environment where the free flow of ideas and their prompt implementation is a key element of success. Centralizing & standardizing what makes sense enables flexibility without chaos. High mature organizations are moving solidly from doing digital by applying digital technologies to going digital and being digital by expanding both horizontally and vertically, across all business dimensions to optimize underlying functions and processes, building business competency, improving both organizational flexibility and strategic responsiveness. As Peter Drucker, an American management guru wisely pointed out: "There is no one right organization structure. Rather the task, it is to select the right organization for the task and mission at hand."

What is the state of the organizations, what is the life cycle stage of the product or program? It can make sense to create a silo to protect an embryonic program. A mature organization is a different story in optimizing the structure and improve performance. Silos are opposite of the strategic alignment; a systematized management model requires to achieve its vision, its mission, and its goals. Many think silo happens when the business operates from a fear standpoint - fear of rejection, fear of invisibility, fear that other peoples' accomplishments will somehow diminish your own, etc. In order to survive and thrive amid rapid changes, companies must reclaim the right balance of stability and change, standardization and flexibility. The management must share the holistic view of a living digital organization that promotes a deep understanding of core processes, risks, and transformational opportunities. If you find that you need to organize in silos in order to be effective, and then, there's a good chance, you don't have an overall organizational strategy. At the heart of digitalization, it is PEOPLE. Customer-centric enterprises' vision, strategy, and governance model should enforce the alignment of various silos toward customer-centric products and delivery mechanisms.

Digital paradigm means holism, hyperconnectivity, interdependence, integration, and harmonization. Therefore, it is critical to break down silo mentality and apply a holistic management discipline which can break through the industrial constraints and limitations in pursuit of possibilities rather than impossibilities, All the members are working towards common goals and objectives, with a passionate desire to see the organization succeeding for the long term and reach the high level of business maturity.

Posted in: Digital Master,Digital Pitfalls,Digitalization,GAPs,Lessons from Failures