As we converse with many organisations, and from our own experiences, we often come across the term "operate in silos".
A simple wiki check will tell you that the term silo is derived from the Greek (Siros), "pit for holding grain". The silo pit, as it has been termed, has been a favourite way of storing grain from time immemorial in Asia. How it got adopted into the corporate world is altogether a different story, but what silos mean in the corporate world is more to do with the narrow mindset adopted by individuals, teams or units.
While there are different types of silos, we will discuss a few types with examples here and also on how organizations get into this mode without any intentions.
1. Creating complex processes but measuring metrics at individual unit levels
Organizations create processes so that they can serve that one entity that matters in the end - the Customer. More often than not, the processes do not necessarily result in direct delivery to the Customer, from one unit.
Usually, many steps and units get involved to deliver the good or the service. This is where the problem starts. As the Orgs., create more hoops and touchpoints, the processes lose efficacy as they are not straight-through or delivered directly to the customers. The complication becomes further exacerbated when each leg in the process (or the hoop) is handled by a different team.
Let me explain this with an example of a simple account opening process:
As you can see a simple process can have eight steps. However, not all of these are done by the same unit.
For example,
Steps 1 and 2 will be done by the Sales teams.
Step 3 will be done by a combination of Sales and Ops or the Compliance teams.
Steps 4 and 5 will be done by the Ops team.
Steps 6 and 7 will again mostly be done by the Sales team, and
Step 8 will be done by the Customer Services team.
As you can see there are Sales, Operations, Compliance and Customer Services teams to get the account opened and onboard the customer. If the process is not well orchestrated it anyways is designed for failure. Also, if any of these units measure and monitor only their process and not the end-to-end process, that is the recipe that helps create silos.
Say in the above case if the account is to be opened in 3 days and each unit measures the turn-around time (TAT) basis their input and output, they will lose focus on the end customer TAT. This siloed metric tracking more often ends up in a siloed mentality and mindset creation over time.
This is a classic case where "individually we are all very good but collectively we are a failure" as we do not look at the big picture as a team. Unless the processes are oriented toward the end Customers through common measurement metrics and continuous improvements, there will always be scope for silos to creep in and this ultimately creates bad experiences for Customers.
2. Creating islands of excellence but others (or other teams within the org) do not know about the same
Many times we have observed that some units in Orgs are smarter, more efficient and more productive than the others. This does not mean that they always share their best practices with others. This can also be true with organizations that serve the needs of different customers through different teams.
Since there is no formal framework or repository for sharing best practices, the teams operate on their own and most do not share their practices with others.
Let me explain this with an example. Let's say there is a process or a technology solution that has been deployed at two Client Orgs by the service provider. The process at the first Client Org may be a simple and efficient one as compared to what is installed in the second Client Org. Because most commonly we find that both the service delivery teams do not talk to each other. Hence the teams miss out on valuable insights and learning that the Org possesses and lose out on improvements to efficiencies and productivity. They can even lose their competitive edge because teams don't talk to each other.
Leaders and folks within the delivery teams need to be always on the lookout for better solutions and ways of serving Clients and what better place to start (and do some soul searching) than within their Orgs?
3. Creating ivory towers or towers of power
As organizations grow in size and complexity, there is always a tendency to create tribes and sub-cultures within the overall structure. So many overlapping processes and teams get created, as a by-product, that pursue the same goals with the same Key Result indicators (KRIs) resulting in internal competition. This is so much a waste of the Org's resources and efforts.
These individual sub-tribes wield power that at times (or always by design) they fail to collaborate for the larger good of the Org and its Clients. Unless they have a unifying leader, at the helm, these structures eventually create more harm for the Org than good.
We believe that unless structures are simplified and oriented toward end-Customer deliveries there are bound to be conflicts resulting from silos.
Organization structures should be made simple to ensure that they serve the end Customers first and are built without any redundancies or overlaps. One of the simplest ways tech companies have been able to beat silos and deliver products in an agile manner is to operate through cross-functional squads with common KRIs.
If you are part of any financial services organization and looking to break the silos - reach out to us today at info@executepartners.com. We help you look at yourself as one entity!
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