Resources: Breaking the silo mentality drives profitable business growth

Breaking down the silos to get people working together across organisational boundaries is a tough nut to crack for many leaders seeking to grow their business rapidly. Read our Managing Directors blog below about how ‘Breaking the silo mentality drives profitable business growth’.


Breaking down the silos to get people working together across organisational boundaries is a tough nut to crack for many leaders seeking to grow their business rapidly. Read our Managing Directors blog below about how ‘Breaking the silo mentality drives profitable business growth’.

Scaling a business requires effective collaboration across functions, teams and locations. But employees through comfort and familiarity will usually default to focusing on vertical relationships within their own function. Breaking down the silos to get people working together across organisational boundaries is a tough nut to crack for many leaders seeking to grow their business rapidly. Fostering a greater understanding of the value chain and how individuals and teams contribute or impact along the chain can really help improve collaboration and business performance.


It is commonly understood that firms with more cross-boundary collaboration achieve greater customer loyalty and higher margins. Greater innovation comes from interdisciplinary cooperation and digital programmes and new technology projects will inevitably radically change how businesses operate and deliver, massively impacting on existing organisational boundaries and job roles.

Yet despite all these good reasons for cross-boundary or horizontal collaboration, people in business usually prioritise vertical relationships in their own functions and teams. It isn’t that surprising as these are the people we typically interact with day-to-day. It is a really hard nut for leaders to crack.

Much has been written about the need to move beyond the behavioural issues (Patrick Lencioni in his book on Silos, politics and Turf Wars) and the need for a common goal or a unified vision will encourage collaboration and team-work. But I have spoken with many entrepreneurs and business owners and heard them complaining that colleagues all too often use the lack of a unifying vision as an excuse for not changing how they think and execute, however often the leader describes the vision or target outcome to them.

The problem usually stems from a more basic issue: that people in the business do not adequately understand what the business really does and what makes it successful. What are the key things that are critically important that the business must do brilliantly well? Put another way, what are the core processes and what defines the value levers for the company? Some processes (and the teams that are accountable for them) are core to the product or service provided to customers (and the margin or service that is achieved in its delivery), whilst others support them.

It is therefore critically important that individuals understand better the business value chain and what role they as individuals, teams and functions play along the value chain. How do their actions and behaviours, both positive and negative, impact upon the outcomes? After all, there is little value in an over performing supporting function (based on a false understanding of what good looks like) operating in a silo with little positive impact on the core process delivering customer outcomes. Or a department taking an easy option, without understanding the negative impact and cost this may have on another team further down the chain. For example, Sales ordering products that are cheaper to buy but which are more difficult and costly to assemble for the Delivery team on customer site, impacting negatively on their delivery schedules and the experience for the customer.

Breaking down the silo mentality is about educating everyone in the business about how the company executes, what really matters and how the decisions, actions and behaviours of individuals and teams impact up and down the value chain. As Francis Bacon said, “knowledge is power”. Measurement along the value chain, alignment of KPIs and dealing with consequences where people or teams step out of alignment are all critical.

There is nothing more powerful in any organisation than having all employees rowing strongly in the same direction.


Peter Fennell
Managing Director
Augere

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