Company Doctor – Does your company have silos?

In our state, when you see a farm that has many silos adjacent to its barn, it is considered a positive and a sign of success.

But this same word “silos,” when used to describe communication patterns in a business environment, is a definite negative. These types of silos prevent information from moving through the organization in an effective and efficient manner. The question that needs to be addressed is how do you correct this type of communication pattern and move information through the organization on a timelier basis?

Before we address how to correct this problem, we need to understand how these silos function and get built within the organization. You know you have a silo when information moves up and down the organization but not efficiently across departments.  I have worked with a number of organizations in which I heard senior managers state that, “The right hand does not know what the left hand is doing,” which results in poor coordination of the organization’s business activities.

For example, two departments within the same company are working with a client on a problem, and the client is being asked the same questions from both departments. Think of the impression that leaves with the customer. The customer is probably thinking, “These two departments don’t talk to each other and they are duplicating activities, and it’s probably costing me money.”

Service levels can also be affected by the existence of one or more silos. Consider a hospital whose emergency room personnel are routinely required to insert IVs into patients and these personnel are continually inserting the IVs in the wrong position on the patient’s arm. This technique causes the patient to be uncomfortable and could possibly lead to one or more complications. No one has told the emergency room personnel that they needed to change their techniques. The hospital IV nursing staff instead would routinely replace the problem IVs and not communicate the issue to the emergency room team. This approach impacts the patient’s perception of the level of care they are receiving and the level of communication that is ongoing between the emergency room personnel and the IV staff on the hospital floors.

Why has this problem not been addressed? Probably because the personnel report up two separate organizational ladders, and there are no cross-conversations between departments. Many hospitals request patient feedback by sending structured questionnaires to them after they are discharged. But how many patients are sophisticated enough to provide the necessary feedback that would correct this problem? The answer is, very few. These institutions are relying on the questionnaires to provide them with ratings on patient care and service delivery. There is an open question, how does this information flow back to the participating departments? If top management is only reviewing these results and summarizing the statistics for each department, how does change take place?

So now that we understand what silos are, we need to identify their origins. As a business grows, the number of layers of management increase and activities are specialized and organized within departments. Each department builds its own organizational structure and communication channels. These communication channels connect the various layers of management and supervision within the department. In many organizations the only communication between departments occurs at the top management level. This approach prevents high levels of coordination between personnel in multiple departments and reduces the potential for maximum efficiency and cost effectiveness. Many times this occurs because the manager desires to control the flow of information to and from his department. In many situations information is power and used to enhance the manager’s power base in the organization. This desire to control information can actually reduce the effectiveness and efficiency of the department and the organization as a whole. It also has a negative effect on the motivation and morale levels of the employees in the department.

So how do you prevent the building of silos as your organization grows? There are a number of steps you can take to insure that information flows smoothly between departments.

•    Establish a culture that encourages open communication between supervisors and managers of different departments.

•    As you grow, establish an executive committee whose responsibility is to think strategically, but leave implementation to the middle managers. This approach worked at Gimbels Midwest, where we had an operating board whose major responsibility was to implement the strategies adopted by the executive committee.

•    Hold regular company wide meetings, during which the chief executive updates the entire employee group on the progress of strategies, new projects and other company initiatives.

•    Form cross-functional teams who are assigned to work with clients on major projects, encouraging the building of inter-departmental synergies and the development of future managers.

•    Assign employees on a short term basis to other departments as part of a program to increase the level of cross-communication and to break down the barriers to cooperation and coordination.

Silos will not be disassembled immediately. It will take time and effort. Managers should be encouraged to share information with each other and be evaluated annually on their efforts to achieve that goal. Effective communication is the lifeblood of any organization and increasing the level and quality will benefit the organization in the long term.

For example, the hospital could set up a cross-functional committee that would look for ways to improve the level of customer satisfaction and care. This would result in higher rates of customer satisfaction and a reduction in potential complications for patients.

So, the next time you see a farm with many silos, you know that this farmer and his family effectively communicate and coordinate their activities.

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