Why CEOs Must Be Organizational Silo-Breakers and 6 Ways to Do It
Do the following things ever happen in your company?
The marketing team creates beautiful collateral that doesn’t reflect how the sales team closes. The sales team aggressively pushes Product A when other groups in the company have made a strategic shift toward Product B. The VP of product insists on keeping his team’s development plans under wraps from his or her fellow executives.
These are all examples of a phenomenon every CEO is familiar with: organizational silos. These silos naturally arise in nearly every company as various groups develop processes and goals that are effective for their own members–but often at the expense of the rest of the organization.
Managing the White Spaces
Sometimes silos arise due to raging turf wars, but more often they come about due to honest misunderstandings and a natural focus on the immediate team’s needs. Either way, the CEO must keep the whole organization pulling together, not against each other.
Picture your organizational chart. Look at the white spaces between each of your department heads. It’s just an inch or two on paper, but it’s usually a wide gulf in reality. Each of those gaps in the org chart represents a chance for silos to grow. And as CEO–the one executive whose influence spans all the groups in an organization–it’s up to you to manage the white spaces and continually tear down the barriers that arise within them.
(Side note: Some organizations rely on COOs to build unity across functions, but the number of firms employing a COO has declined)
Here are six ideas on how any CEO can better be a better silo-breaker:
1. Make sure EVERYONE understands the company’s strategy and mission.
Yes, it’s leadership 101, but Kaplan and Norton have found that 95 percent of employees are unaware of or don’t understand company-level strategy. Although their research was conducted years ago, that number is still very high based on what I see.
An organization without a shared strategy and mission is fertile ground for silos. Explain the company’s mission and strategy to employees repeatedly, emphasizing the imperative to think “big picture” rather than looking out solely for the interests of their immediate teams.
2. Teach the decision nexus.
One of the best ways to grow big-picture thinking in your workforce is to teach what I call the decision nexus. Every time an employee faces a weighty decision, they should consider the interests of three groups: (1) customers, (2) shareholders, and (3) employees. The best decision usually lies closest to the nexus of these interests.
If you explain your own decisions within this framework and encourage employees to do the same, they will begin to understand how to act in the best interests of the company as a whole rather than their local part of the organization.
3. Make goals and performance transparent across divisions.
Everyone intellectually understands that each division in the company has its own set of priorities, but seeing is believing. Make sure company and department goals are recorded and shared in a transparent system, and that all goals are consistently updated to show progress.
When employees are looking at the entire goal ecosystem on a regular basis (not just their own goals or their boss’s goals) they can see the big picture right in front of them. They can spot interdependencies, communicate with colleagues more knowledgeably, and have a level of empathy for other groups they might not have had before.
4. Champion innovation and change.
We’ve all come across colleagues with this attitude: “Our team has always done things this way, and no outsider is going to change it.” That insularity and regression to the status quo is a hallmark of silos. Root it out by establishing innovation and change as key components of your culture. If people are constantly seeking out new and more effective ways of operating, it’s harder to get stuck in a local mindset.
5. Train executives to bring you cross-department conflicts quickly.
As CEO, you need to manage, not eliminate, conflict in the organization. A certain level of tension will always exist between departments, because they are competing for limited resources. When a true conflict or disagreement arises, train managers to escalate it to you immediately. Only the CEO is in the position to make trade-offs between the conflicting demands of two different parts of the organization. If conflicts between departments remain unhandled, they can cause divisions between groups to become even deeper and more harmful than usual.
6. Don’t let your leadership team become the United Nations.
Jeff Gibson, president of Table Group Consulting, has written that executives serve on two teams: the functional team they lead (marketing, sales, etc.,) and the leadership team. He says that “they need to prioritize their leadership team first, for the good of the organization.” Otherwise, Gibson argues, the leadership team becomes like the United Nations, with each person making speeches that advocate for the group they represent.
Present this concept–that the leadership team is Team #1–to your executives. Like many other organizational dysfunctions, silos can often be prevented if there’s coherence and trust at the top of the company.
The org chart reminds the CEO of his or her responsibility to manage the white spaces between functional groups in the organization, ensuring that the company operates as a cohesive whole, not a collection of walled-off departments.
First appeared on Inc.com