Let’s start by defining silo-building. It’s the mindset and actions that create isolated departments or work areas that do not collaborate well, neither with other areas of the company nor with other parts of the value stream.
The focus of the silo is optimization of the silo, nothing else. In manufacturing, a silo might be a fabrication area that supplies components to the assembly department. Or more often, silos develop in support or administrative departments; e.g., engineering, IT, quality, sales.
Consider a sales team breaking sales records by promising delivery dates that cannot physically be fulfilled by production. (I know, this never happens in your organization.) Or the engineering department creating new products that address the final customer’s need, but the product is extremely difficult and costly to manufacture. In both examples, the silo was unaware—or simply not interested in understanding—the needs of their internal customer, their value-stream teammate.
The ‘Optimize the Value Stream’ Principle
One of the principles of lean focuses on coordination among the various functions throughout the value stream. This principle has been referred to as systems or systemic thinking, or what I refer to as the “optimize the value stream” principle. Our businesses are systems where the system components are not independent entities but are interdependent.
Systems thinking requires us to maintain a focus beyond our own individual place within the value stream to assure that improvement efforts advance the performance of the whole system. Local improvement at the expense of system performance is counterproductive. This principle also requires that we collaborate with our value stream teammates to address cross-functional issues. Silo-building or turf-protecting runs counter to this principle.
The Growth of Silos
Unless we intentionally stop it, silo-building can develop and become the default behavior. We go to work each day in our functional areas, whether a manufacturing department or an administrative or support function. That’s our workplace, where we’re likely most comfortable, maybe even working with some close friends. The silo almost forms naturally. It’s easy to lose sight of the rest of the organization. We don’t interact with them daily like we do with our functional teammates. The silo isolates us from the rest of the value stream, the broader team, the team that actually produces the product or service for the final paying customer.
Our silo is further institutionalized by KPIs solely focused on optimizing the silo. Hiring, recognition and promotion policies may also add to this problem by the heavy focus on functional expertise with little emphasis on system collaboration. This “optimize the value stream” principle presents one of many challenges to developing a sustainable lean culture. It is necessary to focus on the minute details of each individual process or function to root out and eradicate waste, but it is also essential to maintain a broader system perspective.
A damaging silo-created behavior: Since this siloed work-area segregation weakens the connections with internal suppliers and customers, problems will surely surface, such as late deliveries and quality issues due to the lack of communication and collaboration. Then another destructive anti-lean behavior often kicks in … the finger-pointing blame game. It’s their problem not ours! We are doing our job! That is one of the root causes, the definition of the “job.” If the job doesn’t require coordination across the organization in alignment with lean principles, the silos will grow and lower company performance.
The Responsibility of Company Leaders
Silo-building is not a new problem. W. Edwards Deming was preaching about this issue in the middle of the last century. So why is the cross-functional blame game still being played today, where the various departments act more like warring factions than an integrated team?
In short, company leaders have allowed it! I am sorry, but there is no passing the buck here. If you are the plant manager, president, or CEO, and you keep complaining that the different functions (e.g., fabrication, assembly, shipping, engineering, maintenance, sales, etc.) are not effectively working together to solve problems and meet improvement targets, time to look in the mirror.
You have allowed this anti-lean behavior to thrive. I know this is not intentional, and you may have inherited the situation from the last guy or gal, but now it is up to you to address. It’s one of those issues that won’t fix itself (very few do), and though your Lean or OE team can provide coaching, guidance, support and encouragement, this is your responsibility. Leaders must lead! So, what do you do?
Required Leadership Actions
Provide clarity: The first step is to provide clarity on the organization’s foundational principles. These are non-negotiable, fundamental truths of lean with which our behaviors must align, and violations cannot be ignored. Systems thinking or “Optimizing the Value Stream” is not optional. It is a fundamental truth of lean.
Address any misguided behavior: When the blame game surfaces between warring silos, this is an urgent teaching moment to provide unambiguity on expected behaviors. Of course, there will always be differences of opinions when addressing company problems and striving for improvement; this is typical and healthy as we experiment our way to improvement. But let’s be clear, finger-pointing is not healthy conflict!
Be a system coordinator: A key role of leaders at all levels is to be a system coordinator, where working effectively with internal suppliers and customers is a component of the job. On the front line, this means coordinating with neighboring work areas. At another level, coordination must happen among the director of operations, sales, engineering, etc. This role must be evident in leader performance evaluations, and when promotion opportunities arise, system collaboration should weigh heavily.
Facilitate cross-functional teamwork: Putting an end to blaming is only a small part of the solution. The goal is cross-functional team engagement in process analysis and improvement via rigorous plan-do-check-act experimentation. Getting a group to effectively function as a team will take time and persistence, combined with the aforementioned clarity.
Other Silo-Busting Considerations
Hiring: For many roles, cross-functional collaboration must become one of the key criteria in hiring.
Physical layout: The facility geography can either encourage or discourage collaboration.
Process structure: Work-cell design, whether on the production floor or in the office, obliterates silos.
Cross-training: Besides added processing flexibility, cross-training encourages better understanding of internal customer needs.
KPIs: Functional metrics must support both internal and external customer needs.
The Alternative
If anyone feels that this is a non-issue, and any silo-building, blame-deflecting, turf protecting behavior is just healthy internal competition, go ahead—continue allowing this behavior which solves absolutely nothing. Allow your external competition (the real competitors) to be the better cross-functional collaborators. While their teams continue to learn and grow and develop into stronger system problem-solvers, your folks will be busy running out of fingers to point while the unattended problems continue to proliferate. Then you can watch your frustrated customers transfer their business to your competitors. It’s your choice!
