Breaking Down Silos: How to Increase Cross-Team Collaboration

Annual productivity losses from organizational silos reach $47 million on average for large companies, Panopto’s research shows. Yet businesses continue to operate divided departments that don’t communicate and don’t share knowledge.

When teams or departments within your business are disconnected from the flow of information in the rest of the organization, you’re operating within silos. These invisible information barriers stop different parts of your company from effectively collaborating.

Some departmentalization makes businesses run smoothly, but when groups duplicate efforts, obstruct communication, and adopt “us vs. them” mentalities, they’re biased toward inefficiency. Fortunately, by knowing how silos form — and taking action to break them down — you can change your company culture forever.

Types of Organizational Silos

Informational silos can exist in various forms across any organization. The most common types of silos are:

• Departmental silos: Separate departments — such as marketing, sales, and IT — fail to communicate or work toward shared business goals. These silos remain the most common type found in organizations today.
• Hierarchical silos: Information is shared among those who report to one another but is withheld from the rest of the organization.
• Location silos: Remote teams and in-office teams fail to communicate regularly. In-office staff forget to share information with remote coworkers in other offices or time zones.

Data silos: Teams and departments keep data and information trapped in separate applications and sources. This makes it difficult for departments to see the full picture.

Why Silos Form in Organizations

Information silos don’t tend to form consciously. When organizations grow, they silo naturally based on processes and structures leaders put in place. By identifying the cause of your organizational silos, you can address them at the root rather than applying a band-aid solution.

Lack of leadership is one of the primary causes of silos. When there’s no leader guiding the organization with a clear vision that’s communicated consistently, individual departments focus on their limited goals. Ron Ashkenas, a senior partner at McKinsey says, “Many organizations work in silos because, frankly, working in silos is more natural than working collaboratively—it’s a tribal mentality.”

Likewise, your employee incentives encourage knowledge hoarding. When “talent is offered incentives and promoted based on functional targets rather than enterprise-wide goals,” McKinsey reports, “this creates the classic ‘us versus them’ mentality.” If employee pay and bonuses are tied to individual performance, your employees will only work to further their own department’s success.

Implementing separate technology systems can also cause silos to develop. On average, enterprises use 887 applications, but only a third of those applications are integrated, Salesforce found. Adopting new technology creates information blockages between teams using different applications.

Internal Communication Breaks Down When Organizational Silos Are Present

The average cost of $47 million per year breaks down across several factors. Silos tend to cause issues in three primary areas of business:

Inefficient processes and replicated work eat into productivity. Waiting for information from other teams or reinventing the wheel takes employees 5.3 hours each week on average. Additionally, 20-30 percent of your organization’s overall capacity will be tied up in “friction costs” such as excess meetings, redundant reporting, and unnecessary oversight.

Customers notice when organizations aren’t working together. According to Salesforce, 70 percent of people working in customer experience think siloed mentality is the biggest barrier to delighting customers. When teams don’t collaborate, customers receive mixed messages from your company, are asked to provide the same information to multiple teams, and experience disjointed support.

Siloed knowledge is vulnerable to being lost when employees leave. Of all the knowledge your employees possess, 42 percent is unique to individual employees and never documented. If that employee were to leave, 42 percent of their job could not be done by someone else.

Eliminating Silos

Leaders at the world’s most successful organizations know breaking down silos requires a multifaceted approach. Learn from them and tackle your silos from the leadership level down to your technology stack.

Put down the silos. Leaders should set the example by collaborating with other departments and demonstrating how each team’s goals align with your company’s objectives. Ensuring everyone is working toward the same goal will prevent departments from thinking they need to compete for resources.

Structurally, organizations can promote cross-team collaboration by:

• Forming cross-functional teams to work on projects or initiatives. When you team individuals with different expertise together to solve a problem, departmental boundaries are naturally broken down.
• Implementing robust roles and responsibilities. Use a RACI matrix to define who needs to collaborate with whom.
• Establishing “bridging ties” between individuals in groups that wouldn’t typically work with each other.

Stop incentivizing silo mentality. Instead of rewarding employees for individual performance, evaluate employees on how their work contributed to the company as a whole. Call out and celebrate examples of cross-team cooperation.

Make sure your technology forces employees to work together. Centralized communication tools like Slack, Microsoft Teams, and Asana allow everyone visibility into what other teams are working on. Similarly, using a single source of truth for your data will prevent teams from working in separate information silos.

Mini Case-Study: Centralizing Information at Microsoft

Before Satya Nadella became CEO of Microsoft, employees were ranked against one another and incentivized to work against their coworkers to receive the best score each quarter. Not only did this cause Microsoft to silo off knowledge and information, but it also created a culture of desperation and poor working conditions. Employees were afraid to collaborate because they didn’t want to help their competition.

When Nadella started at Microsoft, he prioritized collaboration and transparency. His growth mindset culture empowered employees to share information and work together to achieve company-wide goals. Employee satisfaction increased by 30 percent as a result.

Since pivoting to a collaborative culture, Microsoft’s cloud computing business has thrived, driving their stock price up from around $300 billion to more than $2.4 trillion from 2014 to 2024.

Break Down Organizational Silos By Sharing Information

It can be difficult to know where silos exist in your organization. As you look for places to improve cross-team collaboration, watch for:

• Duplicated work
• Complicated communication channels
• Departments working without knowledge of others doing the same work

While there’s no silver bullet for encouraging collaboration, addressing silos from the leadership level down to your technology stack can help. 83 percent of executives say silos exist in their organizations, and 97 percent say silos negatively impact business performance. However, only 54 percent of executives make dismantling silos a priority.

When employees don’t share information, your organization will always work in silos. Break down silos by putting powerful communication tools in your employees’ hands and encouraging (directly and indirectly) them to share information.