Have a Silo Mentality in Your Business? Automation Can Help

October 10th 2023 11:00:00 AM

Multiple databases placed on Relational database tables with server room and datacenter background. Concept of multiple silos or silo mentality.

In this two-part blog post, we will examine silo mentality in business and how it can be detrimental to the way your company functions. Many modern companies find that a transparent approach with customers works well. What happens when openness and transparency doesn’t extend to inside the company’s doors?

Organizational silos happen in a business when employees feel separated into groups or departments characterized by the work they do in that department. A silo mentality in a company is one where information “or other business resources” that would be beneficial for employees in other departments to know is being guarded by a specific group.

Picture information as a commodity. Certain managers (or departments) in the company have access to information first. When these departments choose to hoard that information as opposed to sharing it with other departments, an organization silo may be present. A silo mentality can lead to power struggles and delays in getting products launched. One company can have several information silos in place.

Types of Silos in Business

The following are three examples of silos in business:

  • Information Silos

When communicationbetween departments breaks down, information isn’t properly shared within the company. It becomes trapped inside departments instead. This situation often has negative consequences for the organization.

  • Organizational Silos

Organizational silosdescribe asituation where the company is divided into departments, sub-departments, and even further into sub-companies. This arrangement divides groups of workers who have different skill sets into independent operations expected to stay focused on particular goals. An organizational silo becomes an issue when there is limited information-sharing between company departments.

  • Silo Mentality

Mind silos cause even more damage to a business than information silos. They are unexamined assumptions and thought patterns that influence teams’ decision-makers. Silo mentality results from information hoarding and departmental biases. Over time, a silo mentality can lead to a narrow-minded way of thinking that harms the organization. Once a silo mentality develops in an organization, it’s difficult to find a way to shut it down.

Signs of a Silo Mentality in Your Business

Silosare relatively common in business. When people refer to themselves as being from a specific department in the company and receiving specific benefits when they meet a department goal, a silo mentality exists in your company. Some other ways your company can get off track and start slipping into the silo effect are:

  • Failure of management to promote collaboration between departments
  • Competition between departments for resources
  • Failure to focus on the big picture
  • No unified organizational culture
  • Lack of an internal knowledge base
  • No cross-team projects

How Silos Form in a Company

A silo mentality isn’t something intentional. They occur due to several organizational problems, personality clashes, poor teamwork, professional disagreements, and weak leadership.

1. Egotistical Management

When management team members are in conflict about the best way to move forward, silos can occur. Power struggles between leaders start to occur between leaders and they become apparent to the other group members, who may be unsure about whose ideas to support.

2. Poor Communication

Difficultycollaborating and communicating is a major issue for businesses. Information slowly comes down from the top and it may be received by cynical employees who don’t trust management and focus only on their own department’s goals.

These employees may be reluctant to share information with workers from other departments. Employees who are loyal to a particular manager may form cliques and decide to share information only with those chosen members. In these kinds of scenarios, junior employees might not realize what’s going on in the rest of the company.

Poor communication generally begins with personality clashes and professional disagreements between colleagues. It escalates to a breakdown of information flowing between departments.

As a result, working conditions for all employees are affected. Once these situations arise, it is very difficult to deal with them.

3. Overspecialization

A silo mentality can also arise in a company when specialization gets out of control. It starts with the best intentions: A manager wants to automate their department so it operates smoothly, efficiently, and independently based on their employees’ specific skills and abilities. The department can become dysfunctional if workers become hyper focused on their tasks.

Overspecialization in one area of a company may lead to blind spots and failure to notice what’s happening in other areas of the company.

Scanco Automation Solutions Help Your Business Stay Competitive

To stay competitive in the modern business environment, it’s crucial to eliminate the inefficiencies that happen when different departments don’t communicate with each other. Communication between all departments needs to be clear and automatic. Data needs to be transferred in real-time. Functional silos interfere with these transactions and need to be eliminated.

Scanco offers the warehouse and manufacturing automation solutions to help you stay competitive. Move away from the silo mentality toward one where departments are open and co-operative with each other. In Part 2 of our blog post on silo mentality, we will continue to explore this topic.

Topics: silo mentality


Invoice2Payment (i2PAY) from Scanco: Your Path to Faster Payments
Invoice2Payment (i2PAY) from Scanco: Your Path to Faster Payments

At Scanco, helping our customers streamline their business is our...Read more

Scanco's MVP Release: The Power of Cutting-Edge Functionality with Acumatica
Scanco's MVP Release: The Power of Cutting-Edge Functionality with Acumatica

We are thrilled of the coming release of Scanco’s MVP-connected...Read more

Scanco Announces Automated Invoice2Payment (i2PAY) Solution for Manufacturing and Distribution Warehouses
Scanco Announces Automated Invoice2Payment (i2PAY) Solution for Manufacturing and Distribution Warehouses

Scanco Software, LLC announces the launch of its Invoice2Payment (I2Pay) solution. A significant advancement in fully automating Accounts Receivable process...Read more

Get the Free Download

Fill out the form to gain access to all Scanco resources.