If company communications are breaking down, could it be your company suffers the Silo Syndrome? It’s where people are organized in a way they talk a lot inside their group or department (their “silo”), but they don’t talk with people in other groups or departments.
There can be many causes for silo-like communications breakdown, including –
- Reward system that pits people in different groups against each other
- Manager who is at odds with managers in other departments, transferring that ill-will to everyone in the group
- Fear of looking bad because you don’t know what people do in other groups
- Goals that are too high, forcing people to make decisions without consulting other groups just to hit a number
- Culture that doesn’t respect teamwork
- Employees who don’t know how to behave in teams or lead teams
- Organization that’s too rigid and doesn’t work together.
Let’s dive into that last one. As many industries face a near crisis in talent, companies are going to great lengths to attract the right people. It’s often costly – extremely attractive 401-k matching programs, pay-for-performance bonuses, tuition reimbursement, health care benefits and the list goes on.
How do you attract the right people without continuing to up the ante? Ask the right people what could attract them to your firm over your competitors and their answer is typically more of what they know – higher wages, more benefits, etc. Getting at the deeper issue means diving into what really appeals to people. What fuels their passion. What motivates their performance.
Now we’re diving into the deep end of culture. As it turns out, one of the best ways to fuel passion and motivate performance is by changing the org chart. Performance often thrives with teamwork, which is leading many of the best companies to stir the pot of the traditional org chart right now.
NO SINGLE “RIGHT” ORGANIZATION
In getting to the “right” answer, many companies are racing to implement a flatter organizational structure, but choosing the wrong one can have disastrous consequences. It’s not about choosing the most popular, trendiest organization to adopt; it’s about finding the one that works best for your organization.
Often, companies will decide to make the move to a flatter organizational structure, but don’t think about how it impacts the culture that’s in place. When you have a structure that’s more collaborative and a culture that’s hierarchical, you get into trouble because employees think they have to do what the boss says instead of work and organize on their own as the structure would indicate. You can be surprised by things like: people don’t feel like they should collaborate; they feel like they should still ask the boss permission before they do anything. People don’t take the initiative that you need in that kind of structure because the culture is still one of hierarchy.
The above consequences show just how monumental structure affects everything, from shaping culture to the way employees interact, from the social relationships they have outside the workplace to the products the company designs, develops and manufactures, to the supply chain that supports it.
Since this is the case, it’s imperative that leaders take time to understand the problems they need to solve when implementing a new org structure.
Let’s examine several different organization structures and the culture they are known to develop inside a firm.
COMMAND STRUCTURE
The Command structure is named because it was first developed by the military, and very effective at having everyone in the organization “march” in the same direction.
The connections that matter inside this traditional hierarchy are the ones between workers and their managers. This often leads to silos – where employees focus primarily on goals that move their part of the company forward. The teamwork is built around achieving department mission or goals.
The leaders are looked to as the glue that holds the various silos together. They drive the company forward by developing goals for how each silo contributes to the overall company goal. This often leads to internal rivalries and a competitive culture. Most employees feel their ideas matter to their boss, but if the idea doesn’t contribute to the silo goals it is dismissed. The result is innovation that crosses silos has to come from the top – a heavy burden for company leadership. This is why often the Command organization is called the top-down structure.
COMMAND OF TEAMS STRUCTURE
In this structure, adaptive small teams operate within a more rigid superstructure. The organization remains hierarchical in that decision-making is primarily top-down, however, there is a significant difference at the operational level.
The connections that matter here are team-based; it’s more dynamic than the pure Command structure. Relationships are built among team members based on dynamics of the project and its goals. Department silos are broken down here. The teamwork is built around achieving the project mission or goals, often recognizing the project has a defined start-finish lifespan.
There is a lot of glue among teams, depending on how the teams are formed. Some companies assign individuals to teams based on their expertise and project requirements, while others allow teams to form more organically based on individuals’ passion for the project. Company leadership usually remains the visionary that identifies or prioritizes projects, recognizing the collection of projects propel the company forward.
TEAM OF TEAMS STRUCTURE
Here the structure is more organic all around. Teams are more cross-functional and relationships are built between teams as individuals are encouraged to identify opportunities for improvement throughout the company, which may require assistance from another team or a member of another team.
Sandy Pentland is an MIT professor who studies the effects of information flow on organizations. Pentland has found that sharing information and creating strong horizontal relationships improves the effectiveness of everything from businesses to governments to cities. His research suggests that the collective intelligence of groups has little to do with the intelligence of their individual members and much more to do with the connections between them.
Pentland writes about “idea flow,” the ease with which new thoughts can permeate a group. The two major determinants of idea flow are “engagement” within a small group or team, and “exploration” – frequent contact with other units. In other words, a team of teams. He found engagement was the central predictor of productivity, exceeding individual intelligence, personality and skill. The teams that had the highest level of internal engagement and external exploration had much higher levels of creative output.
THE IMPACT ON CULTURE
If you want more employees to bring their ideas forward, a more entrepreneurial and innovative culture, then check out the recent book Team of Teams, by General Stanley McChrystal and co-authors Tantum Collins, David Silverman and Chris Fussell. They explain why adaptability trumps hierarchy. They identify that as the speed of change increases, organizations that are organic and motivate people to act more like entrepreneurs are achieving above-average success. This entrepreneurial activity is another way of saying innovation. Whether the innovations are about a specific individual’s work or workflow, or larger-scale such as new products or services designed to capitalize on a market opportunity, when people are encouraged to “just do it” good things result most of the time.
Research shows that every time the size of a city doubles, innovation or productivity per resident increases by 15%. But when companies get bigger, innovation or productivity per employee generally goes down. So to build a more innovative, entrepreneurial culture, figure out how to structure your company more like a city, and less like a bureaucratic corporation. In a city, people and businesses are self-organizing. They search out opportunities and rally to address them. That means switching from a hierarchical structure to one that is more organic should motivate and enable employees to act more like entrepreneurs and self-direct their work instead of reporting to a manager who tells them what to do.
