Silos are what happens when people think about their piece of the world in isolation. When real estate groups build a workplace based on what will look good in an industry magazine, they are operating in a silo because they aren’t taking into account the needs of the business. When IT releases a new version of software that removes critical functionality because it was too hard to maintain, they are operating in a silo. When finance looks at a real estate lease as a purely cost event without taking operational needs into account, they are operating in a silo.
It’s very easy to begin operating in silos because it’s the path of least resistance. Working across teams is hard. Managers have competing objectives. No one wants to truly be responsible. People don’t understand the nuances of the questions being asked. No one cares about the things that impact others outside their own team.
When you operate in a silo, you only have to worry about people you work with regularly, who think like you and have the same objectives as you do. Things seem simpler. Why worry about a solution that balances the needs of the many, when you can find a solution that makes your own life easier?
Short-term thinking is what allows businesses to let silos develop and run. In the short-term, silos get things done cleanly, quietly and efficiently. You can wave the “Mission Accomplished” banner and tout your achievements. However, in the long-run, those short-term solutions will be inefficient, possibly entirely wrong, and may need to be redone in their entirety.
Silo thinking is why you get people who buy $30 shoes twice a year instead of $100 shoes every two years (assuming they can afford the $100 at the time). $30 shoes end up costing 20% more over two years, they just are cheaper during any one transaction. And that’s usually best case financials when it comes to silos.