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How Organizational Silos are impacting your Startup Growth

Despite the emergence of some amazing software products for team collaboration, better team communication, hybrid working and employee productivity, all designed to align employees and employers in more ways than ever before, the threat of organizational silos for early stage startups and startup growth is increasing.

Some recent research shows that on average 40 percent of company employees report that they feel siloed because "different departments have their own agendas."

While organizational silos negatively impact employee communication and team collaboration — both of which are critical success factors for delivering the best customer experiences and ensuring you have the right product market fit — the increasing problem is becoming more linked to the impact on startup revenue growth.

After all, just because you have the best online collaboration tools in place, it doesn’t automatically guarantee your team collaboration effectiveness.

If you don’t combine a culture of information transparency with team collaboration software tools and bast practices; the negative impact of organizational silos will quickly become apparent.


Information silos are created through multiple collaboration tools

What are organization silos or information silos?

Organizational silos or information silos occur when individual employees or teams generate new content or record new data, but don’t integrate, aggregate or make that that specific information easily accessible for other parts of the business to view or use in a strategic way.

One example of mass information silo creation can be aligned to the difference between using Slack private channels or Slack public channels.

The problem can be amplified with direct messages and how your employees create and share content stored in your google drive.

If you create an important piece of content, store it in your google drive and share that content with handpicked individuals through Slack private messages, you create an information silo.

If you setup a specific Slack public channel for you entire organization, for example #important-company-content, and share your new piece of content in this channel, it means every employee can find it easily, new hires in the future can find it easily, and you stop the potential of organization silos being created.

This is a very simple example, however the impact equation becomes more complex when you begin to:

  • Multiply the amount of content you create
  • Then multiply again, the amount of employees you have currently
  • Then multiply again, the amount work days per year
  • Then multiply again, the amount lost productivity time for each employee searching for important or relevant information

The actual figures relating to the impact of organizational silos and information silos are terrifying, research suggests the impact is now in the region of “£400bn per year in lost productivity for UK organizations”. Research specific to the US suggests a similar trend “$340bn in 2019, expected to rise to $520bn in 2022”.

The impact of organizational silos not only impact your revenue growth, they effect employee productivity, employee efficiency and employee engagement.

Despite the fact that employees are more technologically interconnected than ever before, the silo effect continues to be a problem for teams of all types. According to Clear Company:

  • 39% of employees within a surveyed group believe that there isn’t enough collaboration between teams in their organization.
  • 86% of polled executives and employees blame a lack of collaboration or bad communication for team problems and failures.
  • Less than 50% of respondents thought their organizations effectively and honestly discussed issues with employees.

Let’s explore how your organization can improve cross-team collaboration, break down organizational silos and improve employee efficiency through the right team collaboration tools, communication processes and best practices. 

Reduce organizational silos to boost business performance

Find the right balance between Segmentation, Team Collaboration and Reducing Information Silos

Remote employees, hybrid working, managerial differences, lack of collaborative tools, too many collaborative tools, no best practice guides for employees and misalignment on strategic company goals are all reasons which enable information silos to propagate.

However, be mindful, too much segmentation can also significantly impact productivity, profitability, employee efficiency and cross-functional collaboration.

Organizational silos causes problems for every employee whether you are already aware of the issue or not, but getting rid of silos altogether may result in additional unwanted chaos relating to your culture, if employees feel their communication is being to controlled.

This is one main the main reasons we started Flowtrace, not to try and completely remove information silos for startups, but to help our clients continually improve, using in-depth analytics to identify and break down the organizational silos that have the most positive impact on growth.

Harness the power of team collaboration effectiveness

Focusing on effective and creative collaboration among employees with a variety of skill sets is great way to improve long-term communication between employees, reduce the negative impacts of information silos and create a transparent information culture.

Create opportunities for employees to work closely together on large-scale projects that matter to your company. We always advize our clients to create small teams and align on projects with a common goal.

According to HR.com, “identifying and catering to different skill sets is a way to prevent “one size fits all” approaches to management. By identifying the strengths of each team member, it’s easier to find areas where two or more people can work together to mitigate each other’s shortcomings”.

This will not only lead to better business outcomes, it will also help create a sense that everyone is involved in improving business performance and building something impactful together.

The net effect of these types of shared experiences forge incredible team collaboration bonds and drives innovation through your company.

Better Team collaboration increases innovation

Organizational silos create disengaged employees

We cannot stress enough the importance of ‘Engaged Employees’, your employee engagement strategy and employee experience will have a big impact on business efficiencies and growth.

In simple terms, if your employees cannot easily find important information, then they are not fully engaged.

Breaking down organizational silos can also help you gain advantage in competitive landscape. Here’s the proof:

  • High employee engagement is associated with 18% productivity gains and 81% lower absenteeism, according to a Forrester Research report.
  • The same Forrester Research report also found that high employee engagement leads to 23% higher profitability.
  • Employee experience has a direct effect on customer experience. Businesses with cultures of high employee engagement achieve a 10% increase in customer ratings and a 20% increase in sales, according to Gallup.
  • Gallup also found that highly engaged workforces outperform their less engaged competitors by 147% in earnings per share.

Wrapping Up

Flowtrace is undertaking an exciting journey, be part of it, and together we can improve startup business performance, break down information silos, reduce the risks of startup failure, improve employee engagement, empower more startup collaboration cultures and accelerate faster growth. Take a closer look at our use cases or try out our platform by creating a free account.

 

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