It’s hardly surprising, then, that silo management persists, despite costly transformation projects.
Silo management, also known as “silo management”, is a widespread traditional approach. This management method divides the company’s various functions and departments into separate silos, where each team receives and focuses on its own specific objectives and tasks. This approach hampers the smooth running of departments such as Purchasing (but not only…), whose performance depends on their ability to create value through collaboration with internal stakeholders and suppliers, especially in an increasingly complex and interconnected environment.
To understand the origins of silo management, we need to go back in time. This approach has its roots in the scientific organization of work developed by Frederick Winslow Taylor in the early 20th century. Taylorism” advocated a high degree of work specialization and a rigid division of tasks to improve efficiency and productivity. This vision was widely adopted by industrial companies of the time, and laid the foundations for silo management.
However, in a constantly changing world, silo management has serious limitations. First of all, this approach prevents communication and collaboration between the company’s different teams and departments. Information and knowledge do not circulate freely, limiting the organization’s overall efficiency. Cross-functional issues may be overlooked or poorly managed, as each team focuses solely on its own objectives, without having a global vision.
In addition, silo management limits innovation and creativity, as ideas and perspectives are not easily shared and integrated. Silos create psychological barriers to collaboration and cross-functional thinking.
In a competitive environment where agility and adaptability are essential, silo management is proving increasingly ineffective. Companies need to be able to adapt quickly to market changes and make informed decisions. This requires a more holistic approach, where different parts of the organization work together collaboratively to achieve common goals.
In conclusion, although silo management has been a widespread approach in the past, it has increasingly obvious limits in a complex, interconnected environment. Through cross-functional and complementary objectives, companies will be able to move away from this siloed approach and adopt a more collaborative one, fostering cross-functional communication, collaboration and innovation to successfully meet current and future challenges.
“Value creation through collaboration: the challenge of silo management and silo objectives”: employees do not do what is expected (working collaboratively), but what is evaluated (the results of their objectives). Published on June 2023
