What is Silo Structure and Why Should You Care?

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When you think of a company with siloed departments, what comes to mind? Maybe something like this: Marketing is the “Cool Kids” and they don’t like those uptight finance people. Or HR has its own little world with strict policies and procedures that no one understands.

Operations are the boring back office, while sales are the “Action Heroes” who risk their lives to land big deals. It sounds absurd, right? When we think of companies with siloed departments we imagine them as being segregated into separate rooms with hardly any communication between departments.

We picture people walking up and down long staircases so they can see if some other department needs something from them. But why would businesses create these kinds of barriers between employees? Shouldn’t everyone be working toward a common goal? And how do these company cultures affect employee engagement, productivity, innovation, and more?

What is Silo Structure?

A silo is a large container that holds different kinds of grain. It’s also a language barrier. Silos, in a business setting, are departments more or less operating independently from one another. Imagine that your company has three departments: Marketing, Operations, and Sales.

When the company uses a silo structure, these three departments operate as if they have no knowledge of what’s going on in other departments. They all have different goals and tasks than the other two departments and hardly any communication with them. This may seem like an oversimplification, but it’s actually not uncommon for companies to have this type of organizational structure when they first start out.

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They do this by creating barriers between employees who work towards different goals and don’t interact with each other very much. There are many reasons why companies would create these types of barriers between employees. Perhaps they want to make it easier for new employees to learn their job without having to worry about working with other employees on projects outside their department at first.

Or maybe the company is so small that there’s no need for everyone to be working together yet–they can just focus on doing their own tasks well for now until the company grows bigger and needs more collaboration among its employees.

Why do companies use silo structure?

The simple answer is that companies use silo structure because it makes sense. When an organization is first getting started, it might make sense to have one department handle all customer service issues, for example. That way, customer service representatives don’t have to switch back and forth between tasks.

But as the company grows and becomes more specialized, these departments can become isolated from one another with limited communication or collaboration happening between them. It doesn’t seem like much of a problem at first – but what happens when you need to collaborate on a project? What if your customer service department needs help from finance or HR? Too often, this disconnect results in wasted time and resources.

The Effects of Silo Structure on Employees

The main downside of the silo structure is that it creates a culture within the company where employees are disconnected from one another. It’s not uncommon to have employees who have never interacted with other departments or people outside their own department. This lack of communication has a negative effect on employee engagement and creativity.

When employees aren’t engaged, it leads to high turnover rates and low productivity levels. When they aren’t engaged, they’re less likely to go above and beyond for the company and show loyalty to the company as a whole. They may feel like their work doesn’t matter or that there are limited opportunities for them to grow in the company.

Furthermore, when there is a lack of communication between departments, you will see more mistakes because employees won’t know about something that could significantly impact their department or someone else’s department. For example, if Marketing wanted to do some research on what type of marketing tactics would be most effective for your product, but no one had ever spoken to Sales about what products you offer, those two departments may be working at cross-purposes without realizing it.

This lack of communication can lead to missed deadlines and decreased quality in projects because no one is communicating what needs to happen by a certain date or how much work is involved in developing a project plan. With information getting lost in translation between departments, it becomes difficult for an organization as a whole to meet its goals efficiently.

The Big Problem with Siloed Departments

Silos are a common structure in many companies. They’re not just a physical barrier to communication, but they also create barriers between departments that affect the culture of the company and its employees. We’ve seen departments with their own separate cultures, from finance to marketing to HR, with each department operating autonomously.

Rather than working together toward a common goal, siloed departments can create an environment where people live in fear of “the other.” For example, one day Marketing might tell Finance that they need $10,000 for an advertising campaign; but instead of agreeing to work together or exploring different solutions, Finance puts up barriers and says they can’t give Marketing the money today.

The next day Marketing gets frustrated by a lack of response and tells Operations what happened — not knowing that Finance had already gone over the budget with Operations two weeks ago. Instead of talking it out or collaborating on a solution, Operations will get defensive because they thought they had worked out this issue with Finance themselves.

This is how siloed departments can hurt your business. But there are ways you can break down those barriers and encourage communications across departments so your whole organization runs more smoothly: 1) Keep communication channels open (e-mail, Slack messages) 2) Encourage cross-departmental collaboration (i.e., have different department heads talk about the same issues at staff meetings) 3) Share information proactively about

How to Fix Silo Culture

There are many ways to fix the siloed culture in your company. You can implement constant communication between departments, like having a daily stand-up meeting where everyone briefly reports on what they accomplished that day and what is coming up next. This will keep people in the loop and give them better insight into what’s happening with other departments.

Another way to address siloed culture is by bringing people from different departments together for one-on-one meetings or by setting up a team lunch once a month. These small gestures will help bridge the gap between departments, which will then lead to better relationships and more collaboration among employees.

To fix a siloed company culture, you have to be intentional about breaking down barriers between different parts of your organization. The first step is acknowledging the problem, but it doesn’t stop there: it takes dedication and commitment to real change.

Bottom line

Siloed departments are BAD In order to understand how these siloed departments affect your business, you need to first understand what a “silo” is. A silo is a structure that isolates one process from another. Silos are bad because they lead to separation and conflicts between departments.

Silos create barriers that prevent communication and collaboration among departments which can lead to poor performance in customer service, innovation, efficiency, etc. The key thing to remember here is the culture of the company influences how the team works together.

When you have a team of people who are motivated and feel like they work for each other, your customers will notice it too. If you want your employees to be more engaged at work, then make sure they know they’re part of something bigger than themselves and that what they do matters.

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