Illustration by Albert Rodriguez
If you are a business owner or CEO, a silo mentality anywhere within your organization is directly sabotaging your goal to maximize profits. Why is that?
Let me share an example: Our global client base also includes law firms, some of which we have trained, coached, or advised for over 20 years. Do you know why a large law firm with mediocre lawyers will always outperform a small law firm with genius talent?
The legal practice relies heavily on the sharing and exchanging of information and experience. It is based on the lawyers’ ability to “pop in” to each other’s offices for quick questions and to exchange best practices and experiences. If you take that away, your law firm will always underperform, no matter how much talent you have.
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Do you know why the office of Mark Zuckerberg consists of a simple desk within an open floor plan at Facebook’s headquarters? For this same reason: Mark has realized that, despite his billionaire status, the future of Facebook depends on the accessibility of the founder, free exchange, and the sharing of information.
Free and open communication is one of the secrets to the success of most of the fastest-growing and most profitable businesses across all industries, not just in law or technology.
Is there a correlation between culture and silo mentality?
Are there countries or cultures wherein organizational silos do not exist? No. But in our global experience of working with businesses on almost all continents, and across many different cultures and countries, we have found that some cultures are more prone to a silo mentality than others.
Silos exist due to many factors: too much respect for higher authority, fear of conflict, lack of proper communication, etc.
In the Middle East, business owners enjoy an almost untouchable position of reverence, especially when they are among the wealthiest classes, so much so that the ugly truths about their organization rarely reach them. This is why they frequently make use of foreign consultants who do not fall into this trap, or employ very skilled foreign business managers (many of them Indians), who are not part of the Middle Eastern societal class system.
The Philippines and other Asian countries are more susceptible to a silo mentality than some of their Western counterparts because there is a higher fear of conflict, along with a sense of respect that makes it more challenging to openly disagree with each other or voice different opinions. Add to this the heightened sense of respect for authority, especially when it comes to confronting someone who enjoys much higher levels of wealth, power, or social standing, and you have the perfect recipe for silos to spring up like mushrooms on a spring meadow.
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In my many years of experience as a management and strategy consultant to market leaders across all industries, some of the most influential family businesses, Fortune 500 CEOs, and famous global brands, I have seen again and again that most companies already have all the collective intelligence, knowledge and wisdom they need to come up with the solutions for their challenges. But they are not able to make full use of their strengths because their people are not talking to each other, or at best, communicating poorly.
Communication breakdown and how to solve it
Most companies fail at communication. Difficult issues are rarely addressed, and at best handled superficially. Challenges are ignored, unforeseen enemies never accounted for and internal conflicts swept under the rug.
How can you do better? Both good and poor communication always start at the top. The owner or CEO has to be the shining example of open and honest communication. That is the mark of a great leader.
Conversely, if the top management or owners fail at proper communication or do not bother, the negative effects trickle down through all ranks and affect the communication and collaboration in the entire business.
Silos and family businesses
Family businesses suffer more than most other business types from silo mentalities that hamper the growth of the business and its full profit potential.
Family businesses are a case in point, because the coexisting challenges between family members and business naturally create friction, and often, even rivalry or resentment. The result is deep-rooted conflict due to unresolved issues between family members.
How do you solve this? In most cases, this can be solved through an honest attempt to reestablish clear, open, and honest communication. In certain situations, it can be wise to consult an arbitrator to establish a bridge between family members. But the goal should always be to reestablish the trust and open flow of communication within the family so that the business can flourish.
Fear of conflict
Most people are afraid of conflict, including a lot of CEOs and business owners whom I have had the pleasure of advising. However, the most successful ones have learned to overcome that fear. They realize that profitability is the ultimate goal of their business, not to make everyone happy or to be liked. They do what’s good for the business.
And here is a trick: if you address conflicts the minute they arise, you can solve them much faster and with less friction compared with addressing them later when tensions have already built up and some may be silently boiling with anger and resentment. There is never a “perfect” time in the future to raise unpleasant topics or address conflicts. The perfect time is “now.”
Solutions and next steps
Face your fear of conflict. Overcome it by realizing that your highest allegiance is to the profitability of your business.
Google and watch “Mark Zuckerberg Facebook new office tour” of a few years ago. Stop at the moment he shows his desk and realize why one of the richest self-made billionaires in the world gives up any hint of status for the sake of the lifeblood of any organization: free sharing of information, open communication and accessibility.
Optimize your communication: Put your ego aside. Use this simple, but highly effective hack that I recommend to all our clients: if in doubt, overcommunicate. Your people will never resent you if you do this. Rather err on the side of overcommunication.
Adopt the “now” attitude and push yourself to address issues and conflicts as they arise, and you have already come a long way to prevent the buildup of silos, deep-rooted resentments, and loss or breakdown of communication.
And most importantly, by doing so, you will send a powerful message to everyone else in the organization to follow suit and adopt the same mentality. INQ
Tom Oliver, a “global management guru” (Bloomberg), is the chair of The Tom Oliver Group, the trusted advisor and counselor to many of the world’s most influential family businesses, medium-sized enterprises, market leaders and global conglomerates. For more information and inquiries: www.TomOliverGroup.com or email Tom.Oliver@inquirer.com.ph.