Silos and the bottom line

If you look into the issue of silos and poor inter-departmental relationships in organisations, you will find there are two key factors at play here – the organisation’s culture and a lack of formalised agreements, or memorandums of understanding (MOUs). I think this misses one vitally important issue. To explain, I need to share an experience I had earlier this year.

by | Feb 1, 2012

I was working with a group of senior people from different organisations to help them understand and strategically improve their workplace cultures. Prior to the session we had collected feedback from staff at each of the participating organisations on important aspects of their workplace culture – attributes such as customer service, how people were treated, inter-departmental relationships and so on. These senior executives were all from the same industry, one in which I had little previous experience.

Problem revealed

After analysing the staff feedback, it emerged that there were serious and common cultural issues within each of the organisations represented in the room. And the most serious of these related to inter-departmental relationships, or silos. When this was uncovered relatively early in our session, I shared my surprised about the extent and magnitude of the problem. At this point, one of the senior participants said, “Steve, this is part of this industry. Tension between departments has always been there, and probably always will be.” Here we have a very senior person saying that the issue of poor inter-departmental relations has historical origins and history is a predictor of the future!

Estimating the impact

As the workshop proceeded, we shared the details of the feedback from staff. Then the management team from each organisation was asked to make an assessment of the impact on bottom-line performance on the assumption that the feedback we had considered was an accurate depiction of their current workplace culture. The assessment is a score ranging from –10 (huge negative impact on bottom line performance) through ‘0’ (no impact) through to +10 (huge positive impact on bottom line performance). So if they felt the current culture as it pertained to customer service was having a very positive impact on the bottom line, they allocated a score of say, +7 or +8. Conversely, if they felt the culture as it pertained to how people were treated was having a slightly negative impact on the bottom line, they allocated a score of –2 or –3.

This was done for each of the cultural attributes on which we had sought feedback, including inter-departmental relationships.The outcomes? Each of the management teams allocated a score of between –6 and –9 for inter-departmental relationships. In other words, they were saying that their current cultures with regard to inter-departmental relationships were having a huge negative impact on the organisation’s bottom line performance.

This was a revelation for most in the room who realised that they had put up with, and largely ignored, an industry norm without considering its consequences and without ever seriously tackling the problem. In short, they had accepted the notion that ‘this is the way it is’.

Mending the rift

What’s missing from the conventional view on silos is the need for senior people to truly understand how poor inter-departmental relationships impact on the performance of individuals and the organisation. Once senior people truly understand this, it is far more likely that the core issue of culture will be attended to. And once the culture is being focused upon, formal agreements between departments are likely to be more meaningful and impactful than they otherwise would be.

One strategy we’ve used in organisations to address poor inter-departmental relations is to get two work teams together for the sole purpose of helping them understand the value that the other team/group brings to the organisation and also to consider how the teams might be able to work better together. If you’d like to do this, get two departments together and have each team ask the other the following questions:

 

 

  • Help us to understand the kind of work that you actually do

 

 

  • What gives you greatest grief?

 

 

  • What can we do to help you do your job better?

 

 

This last is a really powerful one that should not be skipped.

In addressing these questions, people might start to understand that their colleagues in other departments are not quite as bad (or different) as they thought and that maybe they provide a necessary and valuable service.

People must begin to respect the value of work by other departments and understand their interdependence.

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