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What does siloed mean in project management?

What does siloed mean in business?
How silos can hurt team performance and derail projects
4 warning signs that your organization is siloed
How to break down silos for better performance
Final thoughts

Keeping a project on track can be difficult at the best of times, but it’s even harder when your organization is siloed

Different departments can struggle to communicate effectively and may end up working at cross-purposes, resulting in projects that go over budget and don’t contribute to your company’s overall objectives.

By understanding how silos form and taking positive steps to eliminate them from your business, you can better align your teams and improve project performance.

This article will help you understand exactly what being siloed means, warning signs to look out for and advice on how to create a silo-free workplace that’s more unified and productive.

What does siloed mean in business?

Silos in business refer to individuals and teams that are cut off from each other, with each working in their own little bubble. Just as physical silos store material and keep it separate, siloed teams work in isolation and withhold information from others in the organization (often unintentionally).

Inefficiencies in both small and large organizations can cause silos. Information can easily end up hidden away in different apps, private folders or archived emails, making it inaccessible to other teams.

Silos may also form where individuals feel that holding onto information makes them more valuable to their employers, hoarding important data so that they appear to be indispensable. In other situations, a person may not even realize that the information they have could help others fulfill their roles.

It’s human nature to identify ourselves as part of a group that shares common characteristics and looks out for each other. This can be a good thing, both in general life and in business. When people identify themselves as part of the organization’s “tribe”, they will work for the best interests of the business and feel motivated to outperform other companies.

Unfortunately, these tribes can also occur within individual departments and teams, resulting in silos that split the organization. Rather than looking out for the company’s best interests, they can end up prioritizing their department and viewing other teams as outsiders.

How silos can hurt team performance and derail projects

Whether silos are caused by inefficiencies or internal divisions, they can have a major impact on teams and project management.

Here are three ways that silos can hurt team performance.

Fragmented knowledge

When different teams hoard their data, it becomes much harder to get a complete and accurate view of the business.

This high-level view is vital for upper management and C-suite executives who are responsible for strategic planning and resolving any potential issues. Without access to all the latest information, data-driven decisions become impossible.

The free flow of information is also important at a team level. Managers who only have access to their team’s data may end up making choices that are misaligned with the organization’s strategy.

Fragmented knowledge leads to poor collaboration between teams. For example, when marketing teams can ask the sales team what pain points resonate the most with customers during the sales process, they can quickly create more relevant marketing collateral.

If those teams are working in silos, then marketing will waste resources carrying out additional research or risk using ineffective messaging.

Lack of a cohesive message for customers

Without shared data and collaboration, it’s impossible to create a cohesive message across the customer experience. As prospects go through the customer journey, they’ll engage with different teams and departments.

For example, they might:

  • Click on a Facebook ad

  • Read a blog post

  • View a webinar

  • Sign up for your newsletter

  • Download a product specification

  • Answer a sales call

  • Make a purchase

  • Go through onboarding

  • Contact customer support to troubleshoot an issue

When individual teams independently create their own messaging, the chances that it will complement the other touchpoints is low. Whether it’s the challenges your product solves, the highlighted features or even just the tone of voice, any inconsistency in the message across these steps can confuse the customer and hurt your results.

Inability to move fast

Whether it’s taking advantage of the latest technology, adapting to customer demands or seizing a new opportunity, today’s organizations need to be fast and agile.

Unfortunately, silos slow the decision-making process down.

Where data silos exist, teams may not even realize what information is available to them. By the time they find out who owns the data, request access and get a chance to analyze it, they’re likely to be on the back foot.

For example, when the pandemic made live in-person events impossible, many companies had to move quickly to switch to virtual online events. This involved researching the technological requirements, liaising with speakers, working out how to recreate the networking opportunities and promoting the new virtual event to potential attendees.

Lots of different people from different teams had to work together to keep up productivity during the transition to remote work. For siloed teams without clear lines of communication and collaboration, pivoting quickly was much harder.

4 warning signs that your organization is siloed

One of the first steps in dealing with a siloed organization is recognizing the symptoms. Here are four silo warning signs to look out for in your team.

1. Prioritizing competition over teamwork

A healthy sense of competition can be good for an organization, encouraging employees to perform at their best. However, a siloed mentality means people are more interested in “beating” other teams within the organization, even if it means the business suffers.

Silos lead to a “us versus them” culture, where departments take delight in others’ failures. Instead of rewarding individual performance and playing teams off against each other, prioritize teamwork and collaboration.

2. Confusing goals and KPIs

As well as being a way to measure performance, you can use goals and key performance indicators (KPIs) to encourage specific actions and behaviors. If your team’s objectives exclusively relate to their department, that’s where they’ll automatically focus their efforts.

Naturally, goals should be achievable and measuring results based on other teams’ performances would be unfair. However, you should still include organization-wide goals and ensure that everyone on your team is aware of them.

3. Lack of organizational awareness

In some cases, silos can arise when team members are unaware of the other teams and their responsibilities. They may not understand how much work others do and the role they play in meeting the organization’s objectives.

This can lead to effort duplication, with people doubling up on tasks already handled by another team. At the other end of the scale, people might completely ignore other tasks, with everyone believing that those tasks are somebody else’s responsibility.

Either way, a lack of awareness can isolate teams and delay projects.

4. Technology feels more like a problem than a solution

There are many different tools and apps that businesses can use to manage their teams and projects but, without the right implementation and training, they can be more of a hindrance than a help.

The risk of siloed data increases dramatically when departments have free rein to choose whatever software provider they like. Incompatibility issues and siloed applications can mean key information is walled off from the rest of the organization.

Even if other departments can technically access the necessary information, a decentralized IT service adds friction to the process that usually outweighs any benefits.

How to break down silos for better performance

While silos can be deeply entrenched, that doesn’t mean they’re inevitable. With the following steps, you’ll be able to break down the walls between your teams and their data and increase the chances of a successful project outcome.

Step 1: Start with team leaders

Team managers can lead by example, working towards an organization-level mission and sharing that with their teams. By demonstrating their commitment to a company culture of cooperation and collaboration, they can instill the same attitude in their team.

For example, if management is happy to share information with other departments, then their team is more likely to do the same. On the other hand, if they regularly criticize other teams and downplay their contribution to the business’s success, they shouldn’t be surprised when their team also isolates itself.

Even when both managers and their teams have the right attitude, silos could still occur when team members are overworked. If people feel like they only have enough time and resources to focus on their tasks, they may put the needs of their “team tribe” over the needs of the “organizational tribe”.

By managing workloads efficiently, managers give their teams the space they need to see the bigger picture.

Step 2: Streamline communication

Regular and open communication between all stakeholders is the kryptonite of a siloed mentality. However, many companies find it difficult to implement effective communication. In Pipedrive’s latest State of Sales and Marketing, 30% of respondents said that internal communication needed to be improved in their company.

To overcome this, start by ensuring you have the right communication channels in place. While a memo passed around the office or an informal chat around the water cooler might have worked in the past, that may no longer be possible.

Pipedrive’s survey found that 43% of respondents work mostly from home, potentially in different cities, countries or time zones. To manage remote teams, businesses should consider adopting asynchronous communication channels (such as Slack and Asana), where an immediate response isn’t expected. These platforms usually allow you to create different internal channels, which can be set up to enable direct communication between your different departments.

At the same time, you should also ensure that there are regular opportunities for different departments to come together and chat face to face – even if that has to be over video rather than in person. This can be difficult with remote teams, especially when different time zones are involved, but two-way conversations can improve collaboration and prevent misunderstandings.

Step 3: Create relevant objectives and key results (OKRs)

Exclusively department-focused goals can be a symptom of a team that’s siloed, meaning that each team focuses on their own goals.

Setting the right performance objectives for individuals and teams can encourage collaboration. You can do this with company-wide objectives and key results (OKRs). These provide clarity on a business’s top priorities, usually starting at the executive level before cascading down through the departments, teams and individuals.

While top-level objectives can be general (such as increasing revenue from existing customers, delighting customers or reducing employee turnover), the key results will be specific and measurable, clearly indicating whether or not you’re progressing toward your main goal.

With OKRs, you should always keep the company’s overall objective in mind, so that department goals and KPIs complement each other. By committing to the same organizational goal, everyone is more likely to support each other and collaborate.

Step 4: Connect your data

With all the teams and departments working together, it’s time to ensure that they have access to the information they need to do their best work.

Document where you’ll store data and in what format, such as cloud-based spreadsheets. Include the software people can use to collect and share that information.

Customer relationship management (CRM) software, like Pipedrive, is a prime example, providing employees with a centralized source for relevant customer data. You can store key information in cloud-based data warehouses, where it can be accessed by teams around the world.

Of course, even the most comprehensive software is unlikely to cover every single one of your team’s requirements. In that case, look for apps that integrate with each other to share data across platforms, either through native data integrations or third-party apps.

This cuts down on time spent jumping from one app to another and ensures that the data you’re using is accurate.

Step 5: Bring your teams closer together

While communication is a good starting point, it may not be enough by itself to eliminate silos. Rather than simply passing on key details and sharing data, look for other opportunities to bring different departments together.

For example, instead of planning training by departments, see whether you could occasionally carry out company-wide training and workshops. If you’re starting a new project, could you include the different departments in the planning stage?

If you have different departments working in the same building, is it possible to create a shared workspace, or even arrange for a temporary job swap? For example, your product team could sit in on a sales call, or marketers could see how the support team responds to queries.

You could also build a cross-functional team, made up of individuals with different skills from different departments working together to reach a shared goal. For example, people from the sales and marketing departments could work together as a single team to tackle an account-based marketing (ABM) project.

This can lead to greater understanding and build relationships across departments. Then, as problems arise, teams are more likely to collaborate to find a solution instead of putting up barriers.

Final thoughts

It’s in our nature to form tribes, looking for groups of people with shared skills, interests and other similarities. From an organizational perspective, dividing employees into specific teams and departments is essential for effective management and planning.

However, a side effect of all this is that those teams and departments can easily become isolated silos, becoming a significant obstacle in your project management.

Fortunately, silos aren’t inevitable. By being aware of the symptoms of a siloed organization and then working to actively break down the barriers between your departments, you can ensure that data flows freely between your teams and they can perform at their very best.

Driving business growth