Grain silos store and isolate—and so do the organizational kind. In business, silos form when teams or departments stop sharing information and start competing instead, quietly undermining collaboration, decision-making, and company culture from the inside out.
Understanding what business silos are, how they form, and why they’re so damaging is essential for any leader who wants to build a more connected, high-functioning organization. I break it all down, drawing on insights from leading management thinkers, including Patrick Lencioni and Noam Wasserman.
Table of Contents
What Are Silos in Business?
In Silos, Politics and Turf Wars, management consultant Patrick Lencioni defines business silos as groups working in isolation from each other. In The Founder’s Dilemmas, business professor Noam Wasserman describes siloing as a situation where company leaders overly compartmentalize their responsibilities and focus solely on their designated area without thinking of the impact on the company as a whole.
I’m a Midwesterner who’s accustomed to skylines dominated by farm silos, so it’s fairly easy for me to understand the concept of organizational siloing right away. The term “silo” was coined by American consultant Phil Ensor in the 1980s. Ensor, who was from rural Illinois, used it to compare organizations that “stockpile” information to the grain silos in his hometown. “Siloing” as a verb was coined around the same time, referring to organizations either creating or working within individual silos. Just as agricultural silos protect grain by isolating it, organizational silos compartmentalize knowledge—often to the detriment of collaboration.
Lencioni explains that silos can form on many levels—within or between departments, at the managerial level, or even between two merging companies.
How Do Silos Form?
In his book, Lencioni discusses what causes organizational siloing in the first place. He admits that personal gripes or dislikes sometimes factor into the formation of silos, but these are rarely primary causes. Let’s explore how Lencioni and others explain how silos form.
Failure to Connect Each Employee to the Big Picture
Lencioni contends that silos form when leaders fail to show their employees that everyone plays a necessary part in achieving a larger, worthwhile goal. When employees lack a broader understanding of their business’s goals and how they fit in, they’ll see only what’s directly in front of them. That is, they’ll see only what the company’s going through from the perspective of their own department. Lencioni also asserts that the less your employees know about what other departments are up to, the easier it is to view them in a negative light—as potential competitors, the source of a problem, or as generally ill-intentioned. In addition, when a management team isn’t all on the same page, different departments will often get conflicting goals that put them at odds with each other.
Mixed Messages From Management
In the earlier example, Mike’s Fitness doesn’t hold inter-departmental meetings on the employee level. Instead, departments meet only among themselves. Meanwhile, different department heads give different instructions to the people under them—some want to focus on cutting costs and improving efficiency, while others want employees to put most of their time and effort into satisfying customer needs and requests.
These mixed messages leave employees butting heads, as different departments pursue different, mutually exclusive goals. They don’t understand the context behind these clashes because there isn’t any interdepartmental communication. This leads to siloing and all of its consequences.
A lack of clarity around executive roles can also contribute to the mixed messages of siloing. In The Vision Driven Leader, CEO Michael Hyatt explains that the upper levels of a company should be divided between leaders and managers. Leaders create the plans and goals for the company’s future, while managers handle the day-to-day tasks required to execute the plans. But, when the line between these roles becomes unclear, companies can end up with either no long-term vision at all or multiple, competing visions that contribute to organizational siloing.
Status Differences
Status boundaries manifest as information asymmetry that silos knowledge between leadership and frontline workers. The pattern persists in organizations where executives withhold critical information from employees, making it impossible for people to collaborate.
Stanford business professors Robert I. Sutton and Huggy Rao, the authors of The Friction Project, elaborate on why leaders sometimes fail to properly convey a larger goal to employees. They explain that, once leaders reach a certain level of power and influence, they can lose touch with the day-to-day work and experiences of their employees. Management often spends a lot of time talking about company goals and hearing about every department, so it can be easy for them to forget that not everyone is aware of these details.
Physical Separation
Physical distance boundaries can silo knowledge in different locations. However, they’re undergoing a tech-enabled transformation as remote work has become common for knowledge workers. My work with Shortform is an example of this. Our company has no unified, physical location; our employees are all over the world. But our robust system of digital communication and collaboration keeps us connected and productive.
In The World Is Your Office, Prithwiraj Choudhury documents how even agriculture and manufacturing are overcoming physical boundaries through digital twin technology—virtual replicas of physical systems that allow remote monitoring and control. Factory workers and farmers can now operate equipment from anywhere, creating “sky-blue-collared workers” who bridge manual and knowledge work.
How Do Silos Hurt Organizations?
No matter where they form, however, silos share two major characteristics that are problematic for organizations: They reduce communication and increase competition. Let’s examine these one at a time.
Problem #1: Less Communication
Communication breaks down between the silos. Employees might stop trying to share information between silos at all, or they might avoid official channels for doing so in favor of using their own back channels. Lencioni contends that this lack of communication leads to an increase in redundancy, since nobody knows who’s doing what or what’s already been done. It also increases tension and infighting; more things are being done behind closed doors, so people trust each other less and are more likely to backstab each other.
Siloing in business doesn’t just reduce overall communication—it can also lower the quality of whatever communication remains. The authors of The Friction Project explain that different departments often have their own jargon and technical language based on the work that they do. When a company lacks a way to bridge this language gap, such as a companywide glossary or list of translations, departments have a harder time understanding each other, even when they do communicate.
Wasserman argues that less communication caused by silos leads to further problems: Founders lose touch with the broader goals of the company, big-picture thinking shrinks, and decision-making and problem-solving slow down.
Problem #2: More Competition
Competition ramps up as siloing increases. The silos view each other as potential opponents when it comes to things such as their share of the budget, who gets various titles, and who’s blamed when something goes wrong. Lencioni contends that this competition can lead to resentment, spite, and feuds between employees and silos.
In a competitive, siloed environment, “winning” or getting ahead takes priority over the well-being of the business as a whole. Lencioni explains that, when business is going well, silos will try to make sure they reap the most rewards instead of keeping things on the right track. When a problem arises, silos will focus on how to shift blame or avoid taking the fall instead of on how to solve it. This will inevitably hurt customer satisfaction, since that’s no longer your employees’ main priority.
At its most severe, excessive competition can even lead to a breakdown of trust and violations of ethics rules, as in the case of Enron. The energy company had a notoriously cutthroat work culture where employees were often pitted against each other, with the “winners” promoted and the “losers” fired. This competitive pressure meant that, when higher-ups started pressuring employees to adopt fraudulent accounting practices, those employees were either willing to go along with it to succeed or afraid they’d lose their jobs if they didn’t. This fraud grew in scale until it finally destroyed the company and led to legal consequences.
5 Examples of Organizational Silos
As we’ve seen, silos in business are common and problematic. Let’s look at a few examples of organizational silos that illustrate what silos are, how they form, and how they create problems for organizations.
Example 1: Everyone on a team seems to agree on one proposal in a public meeting, only for a completely different proposal to get final approval after a series of private communications and meetings.
Example 2: A company’s chief technology officer is too focused on perfecting a product’s features and fails to consult the marketing team, so he misses aligning these features with market needs.
Example 3: A software company’s engineering team spends six months building a new feature, only for the marketing team to discover at launch that customers had been asking for something entirely different. Because the two departments rarely communicated during development, engineering optimized for technical elegance while marketing sat on a backlog of customer feedback that never made it upstream. The launch underperforms, both teams blame each other, and the company loses months of development time.
Example 4: The customers at Mike’s Fitness complain about faulty exercise equipment and long wait times for machines. Different siloed departments blame each other for these problems:
- The front desk staff blame the personal trainers for overbooking sessions.
- The personal trainers blame the maintenance staff for slow response times.
- The maintenance staff blames the front desk for not keeping them informed.
This leads to a buildup of resentment and a communication breakdown that makes the workplace more stressful and less efficient.
Example 5: In Bad Blood, investigative reporter John Carreyrou breaks down what went wrong at the fraudulent startup Theranos. He identifies siloing as part of its broken culture, asserting that they actively kept information opaque, preventing the flow of information. Teams at Theranos were siloed in the name of security, says Carreyrou. They stifled communication and monitored internet access. The executives justified the heightened security and siloing by claiming that they were doing military work and that competitors were actively undermining the company. This made people believe that there was, in fact, something valuable to protect.
Exercise: Identify Siloing in Your Workplace
Lencioni defines silos as groups that work in isolation from each other, and he writes that silos can form on many levels within an organization. Look for examples of siloing in your workplace, and consider how you might address it.
- Have you experienced poor communication or competitiveness at your workplace? How might silos have contributed to or created these problems?
- Does your workplace currently offer a clear objective that everyone can work together to achieve? If so, what is it? If not, what do you think it might (or should) be?
Wrapping Up
Silos are one of those organizational problems that can be easy to overlook—until they’re not. By the time the communication breakdowns and internal competition become impossible to ignore, the damage is often already done. Understanding what silos are, how they form, and why they’re so harmful is the first step toward building a healthier, more collaborative organization.
The good news is that silos aren’t inevitable. Even if your organization currently resembles Midwestern farmland, there are concrete steps you can take to tear down the walls between teams—and the results are worth the effort. Check out my article on ways to break down silos.
If you want to learn more about organizational silos in a broader context, I recommend these books and Shortform’s guides to them:
- Silos, Politics and Turf Wars by Patrick Lencioni
- The Founder’s Dilemmas by Noam Wasserman
