Silo busting from the top

Silo busting from the top

When a company’s leaders are concerned with only their own business units?–?working on seemingly worthwhile agendas that may actually be at odds with other units?–?the situation is clearly detrimental to the greater organisational good. MIS looks at how to knock down silos and keep them from being built up again in your organisation.

Customer satisfaction scores are sagging. Key clients are threatening to bail. Revenue projections that once seemed easily attainable are quickly slipping out of reach. But you’re not one to go down without a fight, so with your CEO’s blessing, you put together an ambitious plan that should get the numbers heading north again?–?if everyone in your organisation would get on board and pull in the same direction. Trouble is, this crew seems to struggle to remember that they all have to row together. IT folks are loyal to IT first, to the company a distant second. The same goes for sales. Ditto for design.

Department heads appear to spend more time jostling for resources and recognition than in looking forward to the challenges ahead. And few managers or employees seem able to get past their departmental allegiances to act for the company’s greater good.

In other words, your company is seriously siloed. Silos are inward-focused, self-protecting business units whose thick walls hinder collaboration and slow execution. They arise, in large part, because corporate leaders fail to “provide themselves and their employees with a compelling context for working together,” argues Patrick Lencioni in Silos, Politics, and Turf Wars: A Leadership Fable About Destroying the Barriers That Turn Colleagues into Competitors.

Without context?–?that is, without a high-level understanding of company priorities?–?leaders and followers can get stuck in siloed thinking.

Their focus becomes tactical and administrative instead of strategic. They pursue seemingly worthwhile agendas in their own areas that they think are in the company’s best interest. Their colleagues do the same. But because the units are so cut off from one another, the agendas are at odds?–?or at least appear to be. Resentment and hostility result, and employees start fighting “bloody, unwinnable battles” with people who should be their team mates, writes Lencioni.

Most critically, silos sap companies of the agility, flexibility, and outward perspective they need to seize advantage of change and remain competitive. In this article, we’ll look at what you and your colleagues can do to get beyond functional divisions and begin collaborating instead of competing.

Tear down those walls!

As founder and president of the San Francisco Bay Area-based consultancy The Table Group, Lencioni frequently was asked how to dismantle silos. His “aha!” moment came when he thought about groups and organisations that don’t have silos. Despite the fact that an emergency room crew is composed of people who have very different specialties, Lencioni notes, they work together seamlessly. The presence of a crisis, he concludes, so firmly fixes everyone’s attention on a common goal that differences and divisions are forgotten.

Discussions with several managers who had weathered company crises bore out his conclusions. They commented they and their colleagues had turned in some of their finest work just when things seemed bleakest.

But waiting for a full-blown emergency to erupt is not the ideal way to knock down silos. What’s needed, Lencioni realises, is a single common goal that rallies everyone’s focus and energy?–?just as a crisis does. Identifying this thematic goal, as he calls it, is the first step toward tearing down silo walls and enabling the creative collaboration and cooperation that are so critical to achieving competitive advantage.

A thematic goal must be clear, specific, and compelling: “Improve customer satisfaction”, “Reduce order-processing errors”, “Accelerate time to market”. A thematic goal is not a company’s mission or long-term vision; in fact, a thematic goal should have an expiration date, usually three to 12 months after its announcement, depending on a company’s business cycle.

“A start-up might set a new thematic goal every month,” says Lencioni, “while a mature company will specify a longer period.”

Many leaders find identifying a thematic goal particularly difficult. How to proceed? Company leaders should ask one another these clarifying questions: What’s the one thing that matters most in this period? What’s the one thing that, if we don’t do it, means we cannot deem this period successful?

For instance, look at the thematic goal chosen by a global pharmaceutical company that bought out a smaller competitor to acquire several early-stage anti-cholesterol drugs. It defined its thematic goal as “Complete the merger of the two organisations within nine months”. Another enterprise, a fast-food restaurant chain seeing a drop in sales as consumers began eating more low-carbohydrate foods, established the thematic goal “Reposition the company for more health-conscious consumers in 12 months.”

Tantalising opportunities also can generate ideas for thematic goals. For instance, a software start-up that saw sales increase faster than planned selected “establish an infrastructure for continued growth within six months” as its thematic goal.

While discussing possible thematic goals, many executives fall into the trap of worrying about whether they’re picking the “right” one. “If you obsess about the rightness of your goal,” Lencioni says, “you risk making the ‘perfect’ the enemy of the ‘good’.”

If your colleagues seem uncomfortable about committing to just one goal, remind them the goal will apply for only the short term. Once the goal is achieved, the company will define a new one. And remember that the thematic goal is not meant to dictate every action of every employee at every moment of the day; rather, its purpose is to ensure that each person’s work is ultimately helping to drive the company toward a particular outcome.

Whatever thematic goal the executive team picks, it should prompt all team members to “remove their functional hats, the ones that say ‘finance’ or ‘marketing’ or ‘sales,”‘ and feel free to ask questions and make suggestions about functional areas other than their own, “even if they know relatively little about those areas,” says Lencioni. After all, where better to get a fresh perspective on a functional area and its specific challenges than from someone who hasn’t lived within that silo?

Once you have a thematic goal in hand, you should establish defining objectives?–?the actions that must be carried out to accomplish the goal. Like a thematic goal, the corresponding objectives are time bound: Once the goal has been achieved, the objectives also no longer apply. And like the goal, the objectives are shared by all members of the executive team.

The table shows examples of defining objectives that the pharmaceutical firm, fast-food chain, and software start-up might select to support their respective thematic goals.

Keep those walls down

Silo busting doesn’t stop once you’ve determined your thematic goal and defining objectives. You must continue to reinforce them until the goal has been achieved, Lencioni says, during regular (often weekly) meetings with the executive team.

At each meeting, discuss each defining objective and arrive at a shared understanding of how well the company is doing on that objective.

Score performance using the traffic-light system: Green indicates satisfactory progress on an objective; yellow, potential problems ahead; red, not going well.

As a group, decide where to spend your time and energy during the coming week. Encourage participants to challenge one another if they believe someone is planning to invest time in an activity that’s unrelated to the thematic goal or in a project that’s already going well.

The meetings should focus on results. Suppose the rebranding and employee-development efforts at the fast-food chain aren’t progressing as planned.

At the meeting, everyone would make suggestions and offer resources from their groups to help jump-start the rebranding effort. For instance, the head of operations might suggest delaying progress on building out new restaurants in order to focus more resources on training existing restaurants’ employees to communicate the new value proposition to customers.

Unit and department heads can engage in similar weekly discussions with their key reports to ensure the team’s contribution to the thematic goal is on track. They also can take aim at silos that might exist among the departmental managers who report to them by working with those managers to define a thematic goal and defining objectives for each unit. They just need to be sure each unit’s thematic goal aligns closely with the company’s thematic goal.

Knocking down silos?–?and keeping them from being built up again?–?requires keeping everyone focused on attaining the one thing that matters most of all. With clear, consistent communication of the thematic goal, a company shouldn’t have to wait for a crisis for its managers and employees to work with?–?and not against?–?each other.

Harvard Management Update

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