“It’s clear that some companies have CEOs who know how to fight back against silos,” says Ethan Bernstein, the Edward C. Conard Associate Professor of Business Administration at Harvard Business School. “They know how to foster collaboration and that it is about much more than the spirit of teamwork.”
Pushing silos into the shadows starts by eliminating perverse incentives, according to Amy Edmondson, the Novartis Professor of Leadership and Management at Harvard Business School and author of The Fearless Organization. “Company leaders will often call for collaboration, but then evaluate, compensate, and promote employees based primarily on their individual accomplishments,” she says.
Incentive systems need to reflect the collaborative goals of the organization and motivate people to reach beyond their silos. For example, if a company is trying to get different parts of the organization to band together to improve the customer experience, individuals working on cross-functional efforts need to be measured against the success of those improvements.
Otherwise, individuals will fear that if they share good ideas, they may not receive any credit for them—and may even be sanctioned for unpopular ideas.
Formal incentives are only the starting point, according to Edmondson. Collaboration needs to be open and robust if multiple perspectives are to come together to address customer needs. To create an environment of candor, companies need to establish what Edmondson calls a fearless organization. Simply put, a fearless organization provides a psychologically safe environment where people don’t shy away from expressing their thoughts and observations—good or bad.
To create psychological safety, company executives and managers should model genuine curiosity about the business and respect for what people have to say. The most effective means to that end, according to Edmonson, is to embrace “situational humility.” Individuals are reluctant to offer opinions and suggestions when they perceive that their managers feel that they know everything. In today’s volatile business environment, not knowing everything should not be interpreted as a lack of confidence, but rather as evidence of clear-eyed recognition of the challenges ahead; effective managers don’t pretend otherwise, potentially blocking out constructive information. Executives should be perfectly comfortable seeking advice and pointing out when they don’t know something. Modeling this behavior will spur others to be more candid, which will enliven collaboration. Such a tack also relieves one of employees’ greatest fears—that there are negative consequences for speaking up or coming up with an idea that ultimately doesn’t pan out.
Boston Scientific, a global medical device company, has heeded much of this advice and significantly weakened its silos. “Our divisions have a great deal of autonomy,” says Jodi Euerle Eddy, Boston Scientific’s senior vice president and CIO. “We have pushed decision making much closer to customers and markets.”
Although decentralization made silos less formidable, Boston Scientific still has them. To push them more deeply into the background, the company has been introducing small agile teams throughout the organization. The teams include IT, marketing, and business unit members. To make them a center of cross-functional, customer focused energy, agile teams have full decision rights on what to implement, how, and when.
The empowerment and success of these teams struck a nerve inside Boston Scientific. The company has been able to expand them into a dozen digital health studios, attracting employees from all parts of each business. Corporate-level functional units, such as IT and marketing, serve as centers of excellence that provide expertise to functional professionals housed in business units. Business unit professionals form a bridge to their corporate counterparts, thus eliminating much of the siloed behavior found when functions stand alone and are autonomous.
To create an environment that encourages sharing ideas, Boston Scientific focuses heavily on diversity and inclusion. “People feel like they are really part of things and have a voice,” says Eddy. “When people are confident that their voices will be heard, they are much more likely to open up.”
The company also pays close attention to compensation and rewards as a means of stimulating cross-functional behaviors. “Compensation is heavily skewed toward overall corporate performance,” she says. “That encourages people to work together and solve customer problems.”