When we think about innovation and innovative business approaches, it all comes down to “thinking outside the box.” Easier said than done! Especially since innovation is not something you can stop doing, it has to be an ongoing mindset.
It’s easy to find examples of highly innovative companies with amazing products that couldn't keep up with the trends and disappeared after a while. Remember Nokia? They went from being the world’s best mobile company to a meme. It wasn't only the strong competition that led to Nokia’s rapid demise. The company collapsed from within due to poor top management decisions, a culture of fear among middle management, and internal rivalry. The company was too siloed.
Let’s see what organizational silos are and how we can overcome them, break the barriers and boost innovation!
What is silo mentality?
A silo is a tall tower or pit on a farm used to store grain or an underground chamber in which a guided missile is kept ready for firing. So, silos are isolated spaces.
In management theory, silos are used as a metaphor to describe a type of organizational mindset. According to Investopedia, a silo mentality is a reluctance to share information with employees from other departments. This mindset reduces the organization’s efficiency and contributes to a toxic organizational culture in the long run.
What causes a silo mentality?
It's essentially a top-down phenomenon that begins with competition between senior managers and impacts their departments. A clash of egos does not always create a silo mentality. However, a narrow vision and perspective can lead to a disastrous result.
Managers should make sure that information spreads among departments and communication workflows run smoothly. A company performs better when all departments are involved in the decision-making process and when resources are used for common goals.
If a silo mentality appears, it’s because management allows it — or even encourages it.
How the No Silo Rule leads to organizational innovation
Firstly, there is much to learn from observing companies with a No Silo Rule, such as Tesla and Apple. Elon Musk explained his view:
Managers should work hard to ensure that they are not creating silos within the company that create an “us vs. them” mentality or impede communication in any way. […] We are all in the same boat. Always view yourself as working for the good of the company and never your dept.
Secondly, managers should implement a set of measures and make sure that people from different departments work together on an ongoing basis:
- Assign people from various departments to work on a project. For example, involve sales and marketing in a product design project. Engineers could benefit from their colleagues' input since they will be in charge of placing the product on the market and sell it to customers.
- Cross-train people in different departments so that they can better understand several roles in the company and the impact that their actions may have on other departments. Create feedback processes between departments.
- Allow top management to have a broader view and tackle complex issues. Set an example and get involved in different processes. Top leaders might find inspiration in Steve Jobs and his approach to the No Silo rule.
- Assess the compensation plans. If different departments have different incentives, they might compete against one another. Set unified goals for the company and design the compensation plan accordingly.
- Create virtual teams for remote workers. There is no need to stop breaking barriers if people work remotely. Quite the opposite! Make them feel included by creating virtual teams. Allow them to work with colleagues from other departments and have a sense of belonging. Feeling connected is good for mental health as well, not only for innovation.
We should learn from the best and embrace the No Silo Rule to boost creativity and innovation. When people from different backgrounds work together, there is a better chance of finding novel solutions to a problem. In the long run, it’s better to build bridges and not walls.