Doing Away with Digital Silos for Successful Digital Transformation
Rob Llewellyn / April 3, 2018
Siloed projects and programs are nothing new, and almost every seasoned delivery manager will have fought through the consequences of silos, like a warrior hacking their way through a jungle. It’s just not a pleasant place to be and the root cause of it often comes down to a lack of orchestration – along with the mandate to orchestrate.
If a team of talented musicians had no conductor, they wouldn’t perform at their best. And if a team of world-class footballers had no manager, the same would apply. Similarly, when a company with great functional teams aren’t well-orchestrated, silos arise. And the bigger the organization, the bigger the silo effect can be.
70 percent of siloed digital transformation initiatives will ultimately fail due to insufficient collaboration, integration, sourcing or project management.”
The abolishment of departmental thinking isn’t going to come easy for those that have led functions such as finance, HR, marketing, logistics, etc. The harsh reality is that unless silos are suppressed, the digital transformation of the business will struggle. In fact, the most that any siloed organization can expect is a series of departmental technology upgrades, which will be neither enough to protect against disruption or to thrive in the digital economy.In our fast-moving digital economy, a successful transformation is highly dependent upon leaders who can break up their old functional silos and steer their digital endeavors strategically. But it’s not easy because old habits die hard. Managers and leaders don’t always welcome the breakdown of their fiefdoms and will sometimes do all they can to hang on to them, regardless of what’s best for the company.
So, CEOs need to help their senior leaders let go of what worked well in the past to shape a new future. One that enables transformation to thrive – which is void of siloed thinking and siloed behaviors.
As the authors of Digital @ Scale, Jürgen Meffert and Anand Swaminathan wrote;
Digitization isn’t just about restructuring the organization. Above all, it’s about establishing a new mind-set: teams instead of hierarchies, networks instead of silos, pace over perfection, and learning from customers, not lecturing them. The digital world demands a new way of thinking.”
Too many well-intentioned managers and departmental directors are leading their digital endeavors in a non-strategic and siloed manner. Some are blinkered by individual technologies, while others are driven by technology trends as opposed to business needs. Many are simply deploying individual digital solutions, with innovation and integration nowhere to be seen.
Just a few years ago IDC suggested that by 2018 (and here we are) – 70 percent of siloed digital transformation initiatives will ultimately fail due to insufficient collaboration, integration, sourcing or project management. IDC’s VP of Research, Bill Keyworth was reported as saying;
Desired business outcomes from DX follow innovation projects that integrate new digital technologies into stable business services and incorporate new skills, techniques, and culture into the fabric of the IT and LOB organizations. Initiatives that do not infuse innovation into the scale and breadth of the total enterprise have not achieved the prime directive: digital transformation.”
Unfortunately, the consequences of siloed practices are already playing out as predicted, and when you step inside the firms that are suffering, the picture isn’t a pretty one. Often the future of these firms has been left in the hands of ill-equipped leaders who unintentionally steer the people around them into chaos and confusion through lack of transformation knowhow. As the old saying goes; “often we don’t know what we don’t know”.
How to wipe out the siloed approach
On a brighter note, the best leaders have done their homework, shifted their mindsets, and taken advantage of new research, frameworks, and guidance that is now widely available. Often through impartial trusted advisors and training.
Many reading this will be familiar with companies that encourage collaboration within their siloed departments or functions, but which frown upon share their knowledge across the company. The problem here is that the heads of these silos don’t have the authority to drive an organizational-wide transformation of any nature. So again, they each tinker with their own digital initiatives in their own siloed worlds. But they achieve little more than lulling themselves into a false sense of transformation security and a good dose of digital sugar coating.
Here are the five ways to help wipe out the silo effect and optimize transformation success:
- Create an enterprise-wide transformation vision
- Work towards strategic goals
- Motivate people to collaborate and innovate
- Introduce transformation governance
- Execute and measure business value
Only senior executives with the right authority and mindset are appropriately positioned to identify potential synergies across functional silos, then create an environment in which everyone can unlock potential transformation value. But for this to happen successfully, the right governance model needs to be developed and put into place. If this isn’t done, you can be almost certain that siloed behavior will re-emerge, whether the CEO wants it or not.