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Survey Says: Kill Your Silos
by Olivier Blanchard | March 9, 2017
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In my last post, I shared a list of top hurdles to innovation that our friends at Crowd Companies recently identified. You can go read it again here, or you can consult the following graphic and just use it as a cheat sheet for the purposes of our continuing discussion. What the data indicates to us is that culture, not the practical difficulties of adapting to new and sometimes complex technologies, is the culprit when it comes to companies adapting to change.

Note that we look at an organization’s ability to innovate as a function of the kind of adaptive agility that drives successful Digital Transformation: Companies that are good at innovation are also fairly agile when it comes to adapting (and even leveraging) technological disruption, and companies that are good at adapting to technological disruption also tend to be highly innovative.

Now let’s take a look at the impact of culture on Digital Transformation and innovation from a slightly different angle: How do silos play into this?

The following table gives us a little bit of insight into this. Granted, this data is from a 2015 study, so it isn’t as fresh as I’d like, but until we can update it with some 2017 data of our own, let’s go ahead and use this as our benchmark. At its most basic, what it shows is a significant change in behavior in the workplace when it comes to vertical collaboration versus lateral collaboration. It’s important to note that this doesn’t show that some people are more collaborative than others, or that some organizations are more collaborative than others, but that workers adjust their collaborative behaviors based on who on their org chart they happen to be collaborating with at any given time.

What we see here is that when it comes to people collaborating in a team setting, with a clear vertical hierarchy (executive + middle-management + subordinates), 84% of managers are happy with the quality of the collaboration. That number drops to 59% as soon as that collaboration shifts to other departments or teams (expands beyond the basic vertical team structure), and sinks further down to 56% when that collaboration reaches further outward and involves external partners. Before we get to the second half of the table, let’s consider what this means.

It is natural for teams to work well together. When you work with the same people all day, every day, it’s almost impossible not to develop some kind of common operational synergy. Even among teams that don’t gel particularly well, certain aspects of teamwork, like rhythm, velocity, and expectations, will naturally form around a nucleus of common objectives, schedules, and joint resources. In other words, even when teams don’t work very well together, they are still working together, and that drives efficiencies not naturally present in instances where strangers with different objectives and operational styles are suddenly thrown together to accomplish a task. All of this to say that we should always expect established teams to be more efficient in regards to collaboration than individuals from different departments being asked to work together on some joint project. That goes without saying.

The flip side of that operational logic is that natural team synergy can’t, by itself, account for the 25-point difference outlined by the above table between the collaboration efficiency of vertical in-silo hierarchies and lateral cross-silo working groups. Something else is at play here, and once you start going through the list of possible culprits, the one most likely to jump out at you is culture.

Am I making an assumption here? Of course I am. But I wouldn’t make it unless I could back it up. Try it for yourself: Make a list of all the possible reasons why middle-managers’ (project managers’) faith in cross-silo collaboration is 25% lower. Be as thorough as you want. Include everything you can think of, from an inadequate internal communication infrastructure to pesky internal politics. Competing budgets? Check. Inadequate incentives? Check. Project ownership confusion? Check. Inadequate access to joint resources? Check. Incompatible management styles? Check. Make the list three pages long if you want. What you will eventually circle back to is this: All of these problems have, at their root, a common cause: Culture. Specifically, the company’s culture doesn’t lend itself to internal collaboration, let alone any kind of scalable operational agility.

Tip: An organization with a 25% difference in efficiency between vertical and lateral collaboration is still wrestling with silos.

Now… I actually like silos, but only to a point. I am suspicious of organizations that claim to be “flat” and devoid of silos. In my experience, some vestiges of silo mentality should be preserved. They create structure, foster specialization and expertise, and help drive key objectives and targets inside an org. I like silos in the sense that I like departments clusters of functional expertise. BUT those silos should operate more like hubs than silos. Keep the foundations, but tear down the walls. Build bridges between them – lots of bridges. So when I say “kill your silos,” what I mean is reinvent them. Open them up and connect them.

Company cultures that favor agility, innovation, and adaptation, already do this: They spend a lot of time looking for ways to open up their silos and better connect them to each other. That connective tissue is absolutely vital to a company’s ability to not maximize its operational potential (including properly reaping the benefits of its own internal talent pool) but accelerate the speed with which it can adapt to changes in the market.

To recap:

  1. What causes a 25% gap in collaboration efficiency between vertical and lateral working groups? Silos.
  2. What causes silos? Culture.
  3. What’s the fix? Kill your silos, and turn them into interconnected specialized hubs.

From culture to tools: building connective tissue shouldn’t be an afterthought

What about improving collaboration efficiency with external partners? Simple: Treat your external partners the way you would any of your internal hubs. We’ll dive into some best practices in a follow-up post, but it basically amounts to agreeing on who owns the management of the project, setting up some clear objectives and project direction, and establishing simple protocols for communicating with them. That last part is especially important as it encompasses the “connective tissue” piece of that collaboration initiative. If you intend to use email as the principal channel for your communications, fine. (Not recommended, but if that’s what you want to do, okay.) If you would rather use a more agile collaboration platform like Cisco Spark, Slack, or Microsoft Teams, then establish that ecosystem, assign someone to manage it, and onboard your external partners. This is where I see a lot of companies stumbling: Their communication channels and protocols are all over the place. Some people use emails, others use texting, others yet use Slack or Spark, and some use none of the above.

Here’s another tip: What ultimately makes teams effective isn’t talent, skill or expertise. It’s how well they communicate. Take a talented team but make it difficult for them to communicate coherently or consistently (inject delays, hurdles, confusion, and crossed signals into their communications), and it will struggle to get anything done. But take a very average team and make it easy for them to communicate and collaborate, and they will get the job done fast and well.

In my next post, I will get into the bottom half of that table: how to create a culture of collaboration that extends beyond communication, and also encompasses agile budgets and resource allocation.

Cheers,

Olivier

PS: If you enjoyed this post, check out our research library for more in-depth reports on a variety of topics that center on Digital Transformation – from key technologies to methodologies and best practices. (Tip: Some of our reports are free, so browse the library to find them.)

About the Author

Olivier Blanchard has extensive experience managing product innovation, technology adoption, digital integration, and change management for industry leaders in the B2B, B2C, B2G sectors, and the IT channel. His passion is helping decision-makers and their organizations understand the many risks and opportunities of technology-driven disruption, and leverage innovation to build stronger, better, more competitive companies.  Read Full Bio.