What is a silo mentality? (Plus how to address it)

By Indeed Editorial Team

Published 8 July 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

In a business of any size, it's important that departments communicate well and work together. With a silo mentality, a company's communications can become ineffective and cause challenges. If you've experienced this issue at work, it's useful to know how to recognise it and what you can do to address it. In this article, we discuss what a silo mentality is, how companies can find it and what to do about it.

What is a silo mentality?

A silo mentality, or silo thinking, is when individual employees or departments don't share information and ideas and they stop working collaboratively together. The name comes from farming, where silos are individual large bins used to keep grains separate. Silo thinking can involve a single individual or department within an organisation or several. In some cases, the separate parts of a company might appear to act independently of one another, despite the necessity of collaborative work. This can affect internal work processes and external factors, such as customer experiences.

Related: The importance of good communication in organisations

How does silo thinking form?

Siloed thinking often occurs in bigger companies, due to the challenge of communicating clearly and frequently with a large number of employees. In smaller businesses, it's more likely that employees do more than one job and work together as a group, rather than separating into isolated departments. In larger companies, employees might not only work in different buildings but also in different parts of the world. Another cause of silo thinking is the lack of a clear company vision, either because the company doesn't have one or because not all employees are aware of it.

Physical separation is a common cause of silo thinking, as employees rarely meeting with each other can lead to communication issues. Departments that become competitive might also exhibit this behaviour. It's important to remember that effective management is one of the best ways to prevent this issue, especially collaboration between managers.

Related: Why is communication important? (And how to improve it)

Ways to spot silo thinking

Silo thinking is potentially challenging to spot when managers are too involved in their organisation and its culture. Bringing in outside consultants to assess the situation may help, as an outsider can identify issues that internal staff may not notice because they've become used to it. Below are some signs of silo thinking:

Lack of communication

If departments are focusing entirely on their own processes and what they want to do, the lack of communication can lead to missed opportunities, repeated mistakes and duplicate work. For example, if the accounts department doesn't share figures with the marketing department, the marketing department can't adequately calculate the marketing return on investment (ROI) and may either overspend on projects that aren't working or spend too little on campaigns that could bring improved results.

If a company doesn't address mistakes in one department, it's possible that other departments may continue to make the same mistakes, costing time and money and potentially affecting customers' experiences. The same problem may also occur if there's no clarification on who's responsible for particular tasks.

Groupthink

Companies often work to encourage open and honest communication so employees feel comfortable addressing their mistakes, determine how to fix them and prevent them from happening again. In silo thinking, it's more likely that employees don't contribute their ideas and observations. This can lead to a situation where everyone follows the manager's lead, which can discourage original thinking and innovation.

Related: Organisational culture importance: benefits and examples

Side effects of silo thinking

Silo thinking can have internal and external effects on a company. It may affect production, internal processes, customer acquisition and the customer experience. Below are some of the side effects of silo thinking:

Internal side effects

Silo thinking can present organisations with significant challenges. Some common internal side effects of silo thinking include:

  • Reduced performance: The silo approach can cause inefficiencies in a business, with poor communication leading to duplicate work, mismanaged errors that employees don't resolve quickly and inefficient processes.

  • Lack of achievement: Employees may work efficiently, but if senior management isn't communicating its vision and goals for the company due to silo thinking, then it's challenging for employees to achieve those goals.

  • Resistance to change: Many successful companies have an open and honest atmosphere where everyone feels comfortable sharing ideas and resolving problems. With silo thinking, employees can become resistant to changes, even positive ones.

  • Lower morale: Silo thinking can cause resentment and frustration between managers and employees and between departments. For instance, employees may feel that other departments aren't working enough, and conflicts may arise.

External side effects

Silo thinking can affect more than the internal workings of a company. It can also have an impact on current customers, potential customers and suppliers. Below are some common external side effects of silo thinking:

  • Redundancies: If departments aren't working together cohesively when creating a product or service, they may produce redundancies with which customers are unhappy.

  • Missing features or information: If it isn't clear who's meant to be working on a particular problem with a product, it's possible customers may receive a product that's inferior, incomplete or lacking in promised features.

  • Poor customer experiences: Lack of internal communication may lead to poor external communication. Customers may experience this by not receiving the specific information they want or not receiving adequate information.

  • Supplier problems: If accounts don't receive communication from other departments that goods have arrived or a service is complete, they may not pay supplier invoices promptly, which can cause issues when goods are next required. Departments may also duplicate tasks, order supplies twice or disagree on who's responsible for an issue.

  • Loss of customers: Once customers notice a pattern of ineffective communications and problem-solving within a business, they may consider competitors instead. This can lead to a loss of customers.

Related: What does collaboration mean in the workplace?

How to address silo thinking

It's possible to address and overcome silo thinking in an organisation. If you're interested in overcoming this issue, consider following the steps below:

1. Establish good leadership

If you're in a managerial or leadership position, you can take direct action to address silo thinking. You can start by speaking with other managers and company leaders and agree to share information and insights routinely. You could do this through regular meetings or any method that's suitable. Then, you can encourage your teams to do the same.

2. Focus on the company's vision and goals

Many companies establish a clear vision and goals to guide the actions of staff and generate a healthy company culture. You might find it beneficial to engage your colleagues by reminding each other of the values of the organisation in which you're working. For example, if you're a team leader or manager, you might implement the company's values of honesty, transparency and collaboration.

3. Work on interdepartmental cooperation and communication

Silo thinking between departments can be challenging. You can suggest or implement interdepartmental cooperation in various forms. You may find it useful to assign responsibilities to particular employees or help other departments with their work and request their assistance when necessary. This can encourage others to do the same and overcome any barriers between your department and others.

4. Support team building

Team-building exercises and opportunities to work together can help ensure that everyone feels like they're part of a team. One team-building tactic is letting teams have an away day, where employees can spend time away from the company to bond. Companies can also organise social events outside of work so that employees across departments and sites can get to know each other. Even if you're not a team lead or manager, you can encourage teamwork by establishing positive work relationships.

5. Motivate others

Individual motivation is important for encouraging collaboration and openness. Try to find ways of incentivising those around you. This can be something universal, like support and praise, or something more tangible, like a monetary incentive. It's also important to extend recognition and support to other departments besides yours, as this can lead to greater interdepartmental communication.

Related: Employee incentives: what they are and how to use them

6. Measure improvements

Setting clear and achievable targets can make it easier to identify progress. If you want to overcome silo thinking, try to identify the problems it causes. Then, you can observe how much they diminish as you try to change the company culture. You can host or suggest regular meetings between key individuals and departments to track this. This can also foster communication, which can help you address the problem sooner.

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