How to solve a major problem of hypergrowth: Information silos.
One common challenge with a company’s growth is the development of organizational silos, which can lead to congestion, confusion, and, later, costly slowdowns in decision-making.
Words by Caitlin Abber
Illustration by Hannah Minn for The Workback
Hypergrowth is one of those words that is downright kinetic. It leaps off the page. It doesn’t have time for a hyphen. It’s too fast. It’s hypergrowth.
When a company is growing fast, very fast, it can be tempting to manage your employees less and let the demand manage them. You’ll give your employees the resources—new apps, new employees, additional office locations—they need to continue that hypergrowth.
But of the problems of hypergrowth, a major problem, in fact, is that when a company goes through a growth spurt, different departments can become isolated from each other.
Departments are onboarded too quickly, technology is introduced without proper training, or the organization’s mission becomes less clear as it scales and evolves. One common challenge with a company’s growth is the development of organizational silos, which can lead to congestion, confusion, and, later, costly slowdowns in decision-making.
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While working within a core team and keeping unnecessary cross-functional work—or meetings—to a minimum has clear benefits, too much focus on one’s own departmental goals will make even the most observant worker lose sight of a company’s mission. What was the perfect solution a month ago may no longer solve an evolving challenge.
The average dollar amount 400 surveyed companies in the US and UK, with more than 100,000 employees, were losing each year because of confusion.
A data point that’s been oft-cited since its release in 2008 adds perspective: $624 per person, per misunderstanding. That is the average dollar amount 400 surveyed companies in the US and UK, with more than 100,000 employees, were losing each year because of confusion. Market intelligence firm IDC’s research—which has been copied and pasted across the internet in the decade-plus since its release—gains scope when multiplied: It’s an average loss of $62.4 million per company per year or $37 billion in the aggregate. Miscommunication is expensive, and information silos are the infrastructure of miscommunication.
The time and cost are why it suits enterprise leaders to utilize strategies to minimize the adverse effects of silos and ensure that cross-functional communication and collaboration can continue to flow between them no matter what.
Fortunately, there are some best practices that experts recommend to build collaborative bridges between organizational silos.
Recognize where silo culture begins
Even though silos can develop at the ground level, responsibility for how they impact an organization always lands in the same place: at the top. Unfortunately, a company’s executive leadership doesn’t always see it that way.
Leadership advisor Brent Gleeson puts it this way in a 2017 Inc. column: “Many executives may look at their organization and dismiss department inefficiencies and lack of cross-functional solutions due to immature employees, lack of basic training, or simply the inability for some employees to play nicely with one another. Unfortunately, while these behaviors may result from the silo mentality, it is not usually the root cause.”
Whatever the underlying cause of silo-inflicted issues, there’s little chance of resolving them without effective leadership from the top.
“When managers really understand the work, that’s your best bet.” —Melissa Swift
One common side effect of silos is a lack of trust among employees, which can cause friction between teams and debilitate any potential for cross-functional collaboration.
“Misunderstood work—where managers literally do not understand the work they’re managing—is a major driver of lost productivity and employee unhappiness,” Melissa Swift, a workplace transformation leader at Mercer and author of Work Here Now: Think Like a Human and Build a Powerhouse Workplace, tells The Workback. “But when the opposite happens, when managers really understand the work, that’s your best bet for seeing opportunities to connect across silos, even complicated ones.”
Like many aspects of work, the Covid-19 pandemic affected cross-department collaboration, in many cases fortifying silo walls within organizations. Casual conversations, formal meetings, and team-building activities that once took place in person were suddenly relegated to Zoom meetings, emails, and chat apps, often limiting employees’ ability to interact and communicate.
The silos that emerged during the pandemic were often the result of inadequate collaborative technology, according to a 2021 working paper that has not yet been peer-reviewed.
“Our analysis shows that, as employees shifted to remote work due to Covid-19, organizational networks around the world became more siloed and that the membership of communities within these networks became less stable,” write the study’s authors. “These dynamics persisted over time, even as emergency orders driving many work-from-home restrictions were lifted.”
Churn, or employee turnover, within a silo also creates instability within it, says one of the paper’s authors, Tiana W. Zuzol.
“Leaders have to understand that the medium of communication—a shift from in-person to online—can actually change who communicates with whom,” Zuzul told Working Knowledge, a magazine published by Harvard Business School. “These changes occurred across organizations in 2020, [and] even in areas long after work-at-home orders were lifted.”
Foster a culture of empathy and trust
Communication can make or break a company. The importance of communication is a lesson in a Management 101 course, though its importance never diminishes no matter how high into an organization one climbs. Communication is everything; it’s how leaders define the company’s mission and enroll their employees in the cause.
It’s also the difference between a company where people are secretive and fearful versus a company where people are collaborative and enthusiastic, says Swift, the author of Work Here Now.
“Organizational transparency allows people to see across organizational categories and make connections on related work,” says Swift. “But transparency alone isn’t enough. Without empathetic leadership, even if people can see how to make the right connections, they won’t feel permission to take action on them. It’s only through a combination of organizational transparency—‘I can see work I should be doing’—and empathetic leadership—’I am allowed and encouraged to do that work’— that real silo-busting can happen.”
To build a culture where communication is a force for good, experts agree that leaders must lead with empathy and keep it real—not just about the goings-on of the organization but also of their inner workings and lives outside the office.
For Charles Lowrey, president and chief executive of Prudential Financial, it was the Covid-19 pandemic that allowed him to remove his “workplace armor” and connect on a deeper level with his teams. “Leading during [the pandemic] meant a combination of strong leadership on the one hand, but also incredibly empathetic and potentially vulnerable leadership on the other hand,” he said during a 2022 roundtable hosted by the New York Times. “Because people wanted to know you were feeling the same thing they were.”
Besides opening up about themselves, leaders can also foster a culture of empathy and trust by being curious about their employees outside of work and respecting boundaries and work-life balance.
Adopt transparency-focused technology
To build a culture where communication is a force for good, leaders should aim to be steadfast about the company’s goals and priorities. As Daria Burke, the CEO of JustFab, told FastCompany: “A one-team mindset starts with the tone set by leadership. The CEO must set and communicate a clear vision, shared goals, and alignment on KPIs. Kickoff meetings for key initiatives should be cross-functional and with interdependencies and expectations well defined.”
Where technology is genuinely helpful—especially in destroying silos—is when it enables transparency and asynchronous work.
Leaders should also keep track of the information that is shared across departments and make sure everyone knows each other and is comfortable communicating and sharing their work.
“Where technology is genuinely helpful—especially in destroying silos—is when it enables transparency and asynchronous work,” says Swift. “Asynchronous work is a great silo-buster, as it can be difficult to bring people together across silos in real-time.”
Even with the best collaboration tools in place, the most transparent and empathy-driven organizations are still likely to experience the unwanted side effects of silos now and then. Mitigating these issues—and enabling deeper collaboration in the process—will become easier as leaders foster transparency while at the same time utilizing technology and tools that connect team members and allow collaboration to flourish.