Silo Mentality Definition - Investopedia

What Is a Silo Mentality?

A silo mentality is a reluctance to share information with employees of different divisions in the same company. This attitude is seen as reducing the organization’s efficiency and, at worst, contributing to a damaged corporate culture.

Key Takeaways

• A silo mentality is the unwillingness to share information or knowledge between employees or across different departments within a company.
• The silo mentality usually begins with competition among senior managers.
• Successful firms encourage and facilitate a free flow of information.
• Silos can create low morale, negatively impact workflows, and ultimately adversely affect the customer experience.

Understanding a Silo Mentality

The term “silo” originally referred to storage containers for grain or missiles, but it is now used as a metaphor for separate entities that stockpile information and effectively seal it in. In business, organizational silos refer to business divisions that operate independently and avoid sharing information. It also refers to businesses whose departments have silo system applications, in which information cannot be shared because of system limitations.

The silo mentality is generally seen as a top-down issue arising from competition between senior managers. The protective attitude toward information begins with management and is passed down to individual employees. It also may be seen between individual employees, who may hoard information for their benefit. It is often found between employees of competing departments, such as marketing and sales, where some assigned duties overlap.

It’s not always a matter of clashing egos. A silo mentality can reflect a narrow vision. The employees are so bogged down in their daily chores that they never see the bigger picture or see themselves as having a critical role in that bigger picture. Or they may be utterly unaware of the value to others of the information they’re sitting on.

No matter what the reasons for it are, a silo mentality exists because senior management allows it to exist.

Managers of successful firms generally encourage the free flow of information between departments so that all aspects of the company can function effectively.

Impact of a Silo Mentality

The lack of cross-departmental communication can negatively impact workflow, as information is not passed freely across the organization. This can leave some departments working with inaccurate or outdated information. These and other operational inefficiencies resulting from silos also complicate how companies deliver value to customers and adversely affect profitability.

A silo mentality inevitably damages morale, especially when employees become aware of the problem and are unable to do anything to change it.

Special Considerations

Attitudes are difficult to change, especially when self-interest is at stake. A writer for salesforce.com suggests that the keys to dismantling silos are “cooperation, communication, and collaboration.”

Some of the specific suggestions for management changes include:

• Create and communicate a unified vision that is shared across departments to encourage collaborative sharing of information.
• Install company-wide software that records and tracks progress toward the company’s goals, and give all employees access to it.
• Hold interdepartmental events such as training seminars that allow employees to get to know and respect each other.
• Consider altering the employee compensation structure so that it rewards progress toward company-wide goals.

What Is an Organizational Silo?

The term “organizational silo” refers to business divisions that operate independently and avoid sharing information. The term also refers to businesses with departments that have silo system applications, in which information cannot be shared because of system limitations.

Where Does the Silo Mentality Begin?

The silo mentality arises between:

• Senior managers, whose protective attitude toward information is passed down to individual employees
• Individual employees, who may hoard information for their own benefit
• Employees of competing departments, such as marketing and sales, where some assigned duties overlap

Why Is a Silo Mentality Bad?

A silo mentality reduces a business’s efficiency and contributes to a damaged corporate culture. It causes a lack of cross-departmental communication that can negatively impact workflow, as information is not passed freely across the organization, thus leaving some departments working with inaccurate or out-of-date information.

The Bottom Line

A silo mentality is an unwillingness to share information or knowledge between employees or across different departments within a company. This commonly creates low morale, negatively impacts workflows, and ultimately adversely affects the customer experience.

By comparison, successful firms encourage and facilitate free-flowing information.