What are information silos in business and how to recognise them

Collaboration is a key driver of business growth, particularly when businesses need to respond quickly to new market opportunities or challenges on a large scale. However, information silos in business hinder successful business collaboration, impairing innovation and decision-making. Organisations that want to build their capacity for agility and growth in a rapidly changing economic landscape must focus on breaking down silos at work.

What are information silos in business and how do they arise?

Information silos occur within an organisation when departments or teams are unwilling or unable to effectively share knowledge and collaborate with each other. As a result, these siloed teams often end up working in isolation from the rest of the company, losing sight of the big picture and focusing narrowly on the best outcomes for their department.

Silos tend to arise organically as a business grows. Your business was likely very fluid to begin with; everyone did a little bit of everything – product development, sales, marketing and so on – because you were a small team who were all figuring it out together. Cross-collaboration was the norm and, as such, you were able to respond quickly to opportunities and shifting landscapes. 

As your business grew, however, it became much more segmented. Silos naturally developed as you centralised expertise, skills and job functions. Teams became more specialised, and therefore able to work more proficiently. 

Managers were then appointed to lead these disparate teams. As to be expected, these managers became intensely focused on the outcomes of their team, continually looking for ways to make their employees perform better. They may even have implemented their own systems or apps, with little regard to how these would interact with the rest of the business.

This is a common story - and not a bad one as we’ll soon see. But first, let’s look at the different types of information silos.

Types of silos in business

 There are typically three distinct types of silos that can arise as a business grows:

• Organisational: This is probably the most common type of silo, where employees are divided by business functions (e.g. finance, human resources, sales etc.). Career paths typically stay within these divisions, further reducing the chance of knowledge being brought from one area to another.

• Products/markets: Teams are focused not on particular business functions, but on products or markets. This may result in better products or targeting, but it’s also likely to result in more redundant work.

• Geographical: For some businesses, geographical proximity to their target markets is important. However, having teams in different locations can also result in silos.

What impact can silos have on your business?

Silos aren’t inherently bad. In fact, for day-to-day tasks, the benefits of silos in business typically outweigh the negatives – specialised teams are able to achieve their aims more effectively and efficiently as a result of this concentration of knowledge. 

But when organisations need to shift quickly, or find new routes for innovation, silos become a significant hindrance, impairing an organisation’s ability to pivot fast and capitalise on new opportunities. 

How do you recognise information silos in your business?

If you’re not sure whether silos are holding your business back, here are a few signs to look out for:

• You don’t know that many people outside of your department: If you’re not generally on a first-name basis with the majority of employees at your business, there’s obviously not a whole lot of collaboration going on.

• Your departments have different (and possibly even competing) priorities: It’s not unusual for departments to look out for their best interests without much regard for other areas of the business. Successful companies, however, have a unified vision that all departments collectively work towards.

• You have a broken customer experience: If customers are complaining about a broken customer experience (for example, they’re receiving marketing material for potential customers when they’re already a customer), this is a sure-fire sign that silos are hindering your business.

• Work is being duplicated: Redundancy is another tell-tale sign that silos are holding you back. After all, if you don’t communicate with your colleagues, how will you know that you’re doubling up on tasks?
  
  

Are business silos holding your organisation back from maximum agility and productivity? Download our Breaking Down Silos ebook to learn how to overcome collaboration challenges and accelerate business growth in your company today.