Rise of digital silos

There is an acceleration of digital transformation among organizations globally right now. This is driven by Covid-19, as one popular meme put it. The majority of companies now are trying to rush in a few years the digital transformation journey that had taken many pioneering organizations as much as 10 years to complete, in an effort to adapt to changes in consumer and business behaviors, as well as how employees shifted to working from home.

These companies hurriedly introduced videoconferencing and collaboration tools, electronic commerce platforms, automation tools and other nifty technologies, only to give rise to a huge obstacle to the success of digital transformation: organization silos. I have written and spoken about organizational silos and silo mentality as those that stunt innovation in organizations.

The Business Dictionary defines silo mentality as “a mindset present when certain departments or sectors do not wish to share information with others in the same company.

This type of mentality will reduce efficiency in the overall operation, reduce morale and may contribute to the demise of a productive company culture.” This organizational malady precludes companies from successfully implementing simple digitization projects because employees resist with such statements as “I can’t do that, it’s not part of my job” or “that’s the way we’ve always done it.”

But now, because the coronavirus has forced many organizations to digitize many of its processes, company departments and employees were forced to adopt new technologies, such as collaboration and automation tools, in response to the shift in the business environment.

But what is really happening in many organizations is that digitization is happening in silos within departments, i.e. each department implements its own technology, adopting its own messaging platform. Siloed projects and programs are nothing new, but the ubiquity of messaging platforms has reinforced siloed communication across the organization.

Digital silo, therefore, comes in two forms. The first is when technology and digitization projects are done by each department without regard for their overall integration in the whole company. This includes implementing an automation project in one department that is not aligned with another project in a different department. The second is when videoconferencing tools make it easier for departments to regularly communicate with each other, creating their own cadence of virtual communication, which strengthens teamwork within the department, but may also reinforce the silo.

So while CEOs rally their boards and employees to digitally transform, many of these projects will fail because of digital silos. An IDC report said “70 percent of siloed digital transformation initiatives will ultimately fail because of insufficient collaboration, integration, sourcing or project management.”

To address these, the CEO should appoint a chief digital transformation officer that will make sure all projects are aligned with a strategy and a bigger picture to ensure the alignment, integration and cohesiveness of the digital transformation strategy. This is where a governance body is requisite, composed of representatives from the various departments.

Breaking down siloed communication is another major task of the digital transformation executive. This involves not only having a uniform communication platform across the organization, but also fostering collaboration across it.

As change starts from the top, the CEO, together with his or her executives, should display collaborative behavior and cross-functional communication. Moreover, they should promote these practices across the organization and institutionalize interdepartmental collaborations to jointly solve problems and come up with new ideas. The digital transformation executive should create a task force, sponsored by the CEO, with the mandate to break down the silos and develop practices that require collaboration and communication. Instead of virtual departmental activities, why not also promote virtual interdepartmental ones?

In addition, as silo mentality requires changing mindsets, employees should undergo reskilling and coaching to change behaviors, attitudes and mindsets. In our consulting work during this time, we have been running workshops to develop three skills needed in the workplace: empathy, collaboration and complex problem-solving/agile decision-making.

Through virtual training, roleplaying and on-the-job virtual coaching, employees will develop empathy toward colleagues and learn how to collaborate with other groups to jointly solve problems and make decisions.

Breaking down digital silos in an organization require a clear mandate from the top and a programmatic approach to changing employee behavior.


The author is the chief executive officer of Hungry Workhorse Consulting, a digital and culture transformation consulting firm. He is a fellow at the US-based Institute for Digital Transformation and country representative of the Institute of Change and Transformation Professionals Asia. He teaches strategic management in the MBA program of De La Salle University. The author may be reached at rey.lugtu@hungryworkhorse.com.

Source: https://www.manilatimes.net/2020/10/22/business/columnists-business/rise-of-digital-silos/783711/