What Are Information Silos, And Should SMEs Care About Them?

No team should be an island.

The idea of information silos is simple: they occur when different departments within a business do not communicate effectively with each other, resulting in information essentially becoming trapped in one place. It’s a concept that has been around for decades, and although silos are more likely to affect large organisations, they can also be a problem for SMEs. Here, we’ll be looking at how silos manifest themselves, why they’re bad for business and how to deal with them.

History

The word ‘silo’ refers to a tower or pit that is used to store grain on a farm. It’s also the term used to describe the underground chambers where guided missiles are kept. However, it’s the agricultural silo that lends it name to information silos, which, like grain silos, are self-contained units that live in a shared space.

It was Goodyear Tire and Rubber Company employee Phil S Ensor who coined the phrase ‘functional silo syndrome’ in 1988. Ensored noted that communications within organisations tend to be heavily top-down, and that there is often a lack of common goals. Since then, his observations have become hugely influential in business theory.

Why Silos Are A Problem

The term ‘collaboration’ has become something of a business buzzword, but it’s an important part of how organisations operate. Silos hinder teamwork, and the results can include:

• Miscommunication: If one department says one thing and another says something else, mistakes can easily happen.
• Unsynchronised priorities: When teams don't know what other teams are working on, they can end up pulling in different directions.
• Toxic competition: Jealousy, resentment and other negative feelings can quickly emerge when teams are isolated from one another.
• Poor customer service: Customers expect the right hand to speak to the left. If your business seems disjointed and inefficient, they’re likely to go elsewhere.
• Inconsistent data recording: Data is a vital part of modern business. If departments store it in different formats, using different naming conventions and so on, time and effort will ultimately be wasted.
• Lack of innovation: People’s ideas and knowledge can be invaluable, especially when they’re shared with others, who may then go on to teach others within your organisation. Without that sharing, your company can stagnate.
• Lack of overall strategy: Ideally, your business should work like a finely tuned machine, all pulling in the same direction towards whatever goals you have. You can’t have an effective strategy if teams are off doing their own things.

^ Just like farm silos, information silos keep things self-contained

Silos And SMEs

If your business is small, you might be under the impression that you don’t need to worry about information silos. After all, you may not have departments at all; it could be just you, or you and a few employees.

Naturally, the bigger a company is, the more difficult it becomes to coordinate and collaborate across teams. But SMEs are not immune from information silos.

Let’s say you’re a self-employed plumber and your only employee is an apprentice. If you don’t communicate effectively with each other, you might end up meeting in the wrong place before a job or double invoicing a customer. In other words, you would have both become siloed.

And let’s say your accounts are taken care of by an external bookkeeping firm. Even though they’re not directly employed by you, you still need information to flow to them and back, with as few impediments as possible. There’s nothing to stop silos also emerging here.

Of course, if you work right next to someone every day, as is often the case in small businesses, chances are you’ll have a pretty good idea what they’re up to. When teams are located on different floors or in different premises, the likelihood of silos popping up will inevitably increase.

How Silos Emerge

No one goes into work in the morning planning to hoard information and keep it to themselves, but it happens anyway. Reasons for why include:

• Inadequate, confusing or complicated processes: Good ideas and important information can easily get lost in the ether when people don’t know how they’re supposed to communicate or record them.
• Personal feelings: Sadly, people don’t always get on with each other, and that can rapidly result in silos. Even if they’re not deliberately withholding information, they may avoid talking to one another – not good for business.
• Ineffective, inefficient collaboration tools: Modern business relies heavily on software and other IT solutions. Silos can occur when those tools don’t allow for easy data recording and retrieval, or for effective collaboration.
• Mismanagement: Like many aspects of business, silos are a problem that can start from the top. Managers need to ensure they organise teams and resources in ways that encourage and facilitate teamwork.
• Work pressure: Sometimes, there simply isn’t enough time to get everything done, so workers don’t have time to worry about what everyone else is doing.
• Specialisms: There’s little point in sharing your work if no one else in your organisation understands it, so expert data tends to stay where it is.

^ If team leaders don't get on, silos can quickly form

How To Deal With Silos

A certain amount of separation between teams is a good thing and can actually support innovation and creativity. Too much visibility can make people feel as if they’re being watched. It can also lead to misunderstandings regarding the state on ongoing, incomplete projects.

Silos, however, are a more e

xtreme form of separation, which should generally be discouraged. Here are a few suggestions for how to go about that:

• Regular company updates: Keep everyone in your business in the know, with a weekly email update or a regularly maintained intranet.
• Inter-departmental meetings: It can be useful to get all your team leaders together to discuss what their departments are doing. However, these meetings may be less useful for some of them than for others, and they can be viewed as a waste of time. A conference call, online chat or email digest may be just as effective.
• Team building exercises and events: Organised fun can be excruciating, but it can also be an effective way of building cohesion in your business. If it works, it may encourage people to talk to each more, decreasing the chance of silos forming.
• Education and training: Concerned about teams becoming isolated? Why not try a direct approach: tell them about information silos and why they’re a problem. Share this blog post, talk to a business consultant and so on.
• Restructure workloads: Take some of the pressure off, and departments may find more time to talk to each other.
• Invest in collaboration tools: The right software can make it much easier for teams to communicate, to collaborate and to share information. Microsoft solutions such as SharePoint, Teams and OneNote, for example, offer powerful but straightforward ways to coordinate work and grant access to communal resources.

Implementing these changes within your business can have real benefits, enabling you to offer better service to your customers, supporting innovation and ultimately boosting profitability. But to get to this point, you first have to recognise when silos are emerging in your business. Does your company seem disorganised? Has it been months since team leaders met up? Keep an eye on these things, and you should find yourself in a better position to keep on top of them, to break silos and, hopefully, to stop them forming again.