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SILOS AND BOTTLENECKS
Tracing the Cause and
Improving Collaboration
A Systematic Approach
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Table of Contents Abstract and Methodology 03
The Strategic Decision on Structure 04
CASE STUDY 1 Healthy Collaboration through Defined Responsibilities
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CASE STUDY 2 The Path to Collaboration; First Stop - Change
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CASE STUDY 3 When Change Goes Awry 11
Conclusion 15
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Abstract
Organizational ailments do not form overnight. In most cases,
they are not designed out of malice, but are a by-product of
less-than-thought-through good intentions or just the product
of many small decisions, which accumulated over time.
Aligning the goals of different departments and getting on a
path of institutional collaboration is often harder than perceived
at first. In order to truly address organizational problems,
uncovering their origin is imperative.
Silos, bottlenecks, lack of communication between
departments, and turf wars are usually a symptom of a deeper
structural and/or cultural problem in the organization.
In this white paper we will demonstrate how a systematic
approach can tackle organizational misalignment. We will
identify how proper (or improper) leadership and employee
alignment creates silos, and negatively affects knowledge
sharing and collaboration.
Methodology
We will examine three case-studies of small, well-established
companies. The companies are a part of a growing community
dedicated to gather data about collaboration alongside other
talent and performance analytics.
Through the implementation of DNA-7’s unique organizational
intelligence within these organizations, detailed visualization of
the communication flows with the company were produced,
allowing us to better understand and analyze the effects
structure has over collaboration.
In order to create the maps, employees had to answer five
questions in an online survey. DNA-7’s algorithms then
processed the results to create the data and visualizations we
based this analysis on.
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The Strategic Decision on Structure
One of the very basic cultural decisions organizations have to make as they are formed — and more so as they scale up —
is how to build a hierarchical system that most effectively supports the company’s goals. The structure should support
both internal and external goals, and is normally backed up by performance and compensation programs to ensure its
sustainability.
Management theories have discussed in length the effects structure and hierarchy have on collaboration. It is widely
agreed that strict hierarchy creates turfs. Turfs have a tendency to become silos, and the assumption therefore is that strict
hierarchy hinders collaboration. That was our assumption as well in this Whitepaper. What we have found, however, was
slightly different - hierarchy has an effect on collaboration, but it is not necessarily the existence of hierarchy or lack
thereof, but rather how hierarchy is perceived by managers and employees. Collaboration proved to be considerably better
in places where both managers and employees understand their relationship and there were no battles over employees
between managers or disagreements on roles and responsibilities.
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CASE STUDY 1: Healthy Collaboration through
Clearly Defined Responsibilities
Family-owned equipment importer creates a healthy collaborative
culture by clearly dividing responsibilities
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Having been around for almost 60 years, in its current
incarnation, the company is led by a sister and brother since
1999.
As we can see in the image below, responsibilities and
hierarchy are clearly defined between the co-CEOs. One is
responsible for all Sales and Support teams, while the other is
responsible for Operations and Administration, including HR
and Finance.
Circled in green, you can see the co-CEOs. The grey lines leading
downward show hierarchy relationships with other employees and
managers.
Because of the increased segmentation and separation of
team members who are working for a co-CEO lead
organization, it is often believed that this kind of structure
encourages silos within the organization. But this is not the
case in this organization.
In the image below we can see the two parts of the
organization well integrated. Only 8 out of 28 (29%)
employees working in Operations and Administration did not
have working relationships with the Sales and Support teams
(mostly bookkeepers and drivers). On the other side, only 13
out of 73 (18%) employees working in Sales and Support did
not have working relationships with Operations and
Administration
Another concern in these types of organizations is whether
employees from the two separate but connected parts of the
organization can work with each other to reach larger
organizational goals.
Employees, in this case study, reported they needed more
work relationships with each other to accomplish company
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goals and directives. In the image below, the green lines
indicate the missing working relationships between the two
parts.
It is interesting to note that only employees who already have
working relationships with the other part of the organization
want to build more working relationships with colleagues led
by the other co-CEO. This tells us there are very little, if at all,
bottlenecks in creation of said working relationships.
Another way to look at communication is distance. In this case,
the average distance an employee has to go in order to reach
other employees in the organization is 2.16 employees, while
only 2 employees (out of 100, i.e. 2%) have to go more than 3
steps to reach the rest of the organization. A distance of less
than 3 steps indicates effective communication between
employees.
In this case study, the co-CEO structure has not created silos,
and in fact, helped facilitate healthy communication inside the
organization. It was clear through the survey that employees
are not looking to bypass their CEO to get their job done.
In conclusion, in this organization, leadership has been stable
for 15 years. The distribution of responsibilities and roles are
clear both to employees and to the co-CEOs. There are no turf
battles, no real silos, no bottlenecks, and employees generally
understand the processes and don’t try to reach the other
CEO if they are not getting their way with their direct CEO.
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CASE STUDY 2: The Path to Collaboration;
First Stop - Change
Software Company in the financial sector hopes to improve collaboration after
disbanding co-CEO structure
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The company was formed in 1999 and in recent years has
seen a massive growth in its business and manpower.
The image below shows the hierarchy of the company’s
leadership. Over half of the leadership reported they are
managed by both CEOs, while the CEOs viewed the
distribution in a clearer way, aside for the IT team, which
apparently does not report to anyone in the organization. A
dotted line indicates that only one side reported a hierarchy
link, while the other side did not reciprocate (the green arrow
tells us who reported).
Circled in green, you can see the co-CEOs. Circled in red are different employees and
managers who reported both co-CEOs are their direct managers.
Formally, the structure is clear to the CEOs. In reality, both
CEOs are working closely and giving assignments to teams
managed by the other CEO, making it unclear to their
employees who they should be reporting to.
In the image below we can see that the two parts of the
organization are barely integrated. 14 employees out of 18
(78%) in the Service teams have no strong working
relationships with anyone in Development & Operations. On
the other hand, 85 out of 91 employees (93%) of Development
& Operations employees have no strong working relationships
with Service teams’ employees. The numbers show an
overwhelming lack of collaboration, but the network map
shows it even better.
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Interestingly, collaboration seems pretty weak across the
entire organization and not just between the two sides. Many
employees have only 2 or 3 working relationships. However,
when they were asked to indicate what working relationships
the need to be more effective, the results were not as
surprising and showed there are many missing relationships
and opportunities in the current structure.
Many employees, from both sides, who have no current
working relationships with the other side, want to form those
relationships. Why can’t they seem to form these
relationships? What is stopping them? There is no
geographical gap between employees or other physical
barriers to collaboration. The only explanation left is corporate
culture.
The average distance an employee has to go in order to reach
other employees in the organization is 3.71 (over a 1.5 steps
more than the previous organization we analyzed), with only
11 employees (10%) within the effective distance that is
needed to convey messages.
The challenges the organization is facing are two-fold. The first
is transitioning the leadership to a functional state. The second
is significantly improving collaboration and reducing distances
between employees. Shorter distances allow employees to
have better accessibility to resources and knowledge. Both
challenges are naturally tied to each other and without a
significant change in the leadership, we do not believe they
can improve collaboration.
Following the analysis, the company embarked on a process
of change. One of the CEOs was moved to the position of
Chairman of the Board and the other CEO assumed all
responsibilities of a sole CEO. They still have a long way to go
if they want to change their corporate culture to one that
encourages more collaboration, but the first step there has
already been made.
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CASE STUDY 3: When Change Goes Awry Global manufacturer struggles with poor collaboration following a
leadership change
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This manufacturing company has been operating for roughly
60 years. Recently, due to old age, the founder took a step
back and left the company in the hands of his son and son-in-
law. Formally, the son-in-law oversees all local operations and
sales, while the son is responsible for the global operations
and sales. In practice, the company’s structure is rather
chaotic.
The image below shows the real structure of the organization’s
leadership:
Circled in green, you can see the leaders. Circled in red are different
employees and managers who reported both leaders are their direct
managers.
No employee has two agreed managers, where both the
manager and the employee agreed on their hierarchy relation.
Quite a few employees reported that both leaders are their
direct managers. There is a lot of confusion among employee
as to whom they report to.
This is probably caused by lack of communication and
improper information flow from members of the team as well
as between the leaders who are co-leading the efforts of this
company.
In the image below, you can see the dynamics of this
organizational structure and what type of communication flow
it creates. We see that unlike the formal distribution of
responsibilities, three global employees are in fact working
under the local management and not under the global
management.
In any organization, rogue hierarchy should raise concerns of
possible execution problems and inability to manage
performance.
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When we look at collaboration between the two parts (image
below), we can see just how poor the communication is. 9 out
of 16 (56%) employees from Derek’s part have no working
relationships with Stephen’s part. 23 out of 31 (74%)
employees from Stephen’s side have no working relationships
with Derek’s part.
It is no surprise, then, that the organization was experiencing
severe problems with information sharing and long response
times for customer inquiries. Employees have very few paths
to gain information from their colleagues.
The average distance an employee has to go in order to reach
other employees in the organization is 2.62 employees, while
12 employees (out of 48, i.e. 25%) have to go more than 3
steps to reach the rest of the organization.
This organization is half the size of the first organization, yet
employees have to go, in average, through 0.5 more
employees to communicate with their colleagues. In this
situation, it is extremely difficult to convey information and
goals to the entire organization, and a lot of knowledge is
getting lost or distorted in the process.
It is easy to see that the dual leadership here is not working
properly. Employees and managers alike are not sure which
leader they need to answer to, which in turn creates friction
and leaves the employees working in closed silos. Information
and knowledge sharing suffers, and it is extremely difficult to
convey messages and goals across the organization.
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Align or Disband
Duel-leadership or co-CEOs structures are usually in the
group of decisions called “deciding not to decide.” This
structure is common with start-up companies and family
companies for reasons that are usually personal. This
immediately creates friction if the leaders are not as
competent. Normally, as these companies scale up, they
disband this structure and transform to single CEO.
For other organizations which have decided to appoint co-
CEOs, it is vital to make sure roles and responsibilities are
clearly defined between the leaders and as a reflection - to the
entire organization. This is true from senior leadership to the
last of employees who have no direct interaction with the
CEOs. For employees, understanding exactly how the route of
recognition, compensation, and promotion works will reduce
friction and encourage employees to work together and
collaborate.
A co-CEOs leadership structure has the potential to create a
plethora of problems, such as long paths of delivering
information, silos, bottlenecks, negative atmosphere, and
more. These, in turn, make it even harder to fix the problems
once management realizes they exist.
In these situations, the recommended solution is to
consolidate the entire leadership under one CEO and not try to
fix the current situation. Re-aligning the entire organization
under the co-CEOs structure is not going to fix the turf battles
and open the silos, at least not in a reasonable time.
If organizations decide to keep the co-CEO structure, they
need to create a dual top-down/bottom-up program. On the
leadership side the company must create clear roles and
responsibilities. On the employees’ side, management needs
to build compensation programs that will encourage
collaboration and engagement with their colleagues. If the
leadership is diligent and the co-CEOs are honest in their
attempts to make it work, the organization can turn around.
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Conclusion
“No man is an island,” write English poet John Donne, and
was very right indeed. Communication, structure and culture
are just as crucial, if not more, for a company’s success as the
ability of its employees as individuals.
While there are many reasons that affect collaboration, poor
definition of roles and responsibilities definitely seems to have
a very strong negative impact it. Insecurity as to whom an
employee reports to creates friction with managers and
colleagues alike, and pushes employees towards
communicating within close silos alone - safe where they are
less likely to make a communication mistakes.
Currently, the realm of HR mostly looks at individual
performance. Whether it is HR analytics or quarterly reviews,
what is assessed and optimized is the employee. However,
the formal and informal structure tells us a lot about why some
people flourish in certain situations and shrivel in other
situations. This can then be used to better place employees in
situations where they are more likely to flourish.
Considering most employees are competent for the role they
were hired for, poor performance can often be seen more as a
symptom than a problem. The vague concept of social
integration can now be measured, quantified, and optimized,
to boost performance for high and low performers alike, and to
create a healthier working atmosphere.
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About DNA-7
DNA-7 is a global leader of organizational and leadership intelligence solutions. Based on more than a decade of research in
organizational network analysis and complex systems, DNA-7 simplifies organizational network analysis via a short, fact-based
survey, which employees can take in minutes to deliver a real-time network map and 25 indices of organizational and collaborative
health.
Founded by Efron Razi and Pinhas Yehezkeally, PhD, DNA-7’s mission is to bring the science of organizational network analysis to
the art of Human Capital Management. DNA-7 simplifies what formerly took 100s of hours of skilled interviews and analysis into a
cloud-based solution that costs a fraction of the time and money.
DNA-7, New York
460 Park Avenue South, Floor 12
New York, NY, 10003
DNA-7, Beersheba
78 Hadassa St., Floor 2
Beersheba, Israel, 8422127
Tel: +1 (914) 307-8016
www.dna-7.com
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