Collaboration

Why AT&T Was Right About HBO. In a Word, We're Talking ... 'Silos.'

Silos can stunt the growth of any business, from conglomerates to startups. To neutralize silos before they can solidify, try these three techniques.
Why AT&T Was Right About HBO. In a Word, We're Talking ... 'Silos.'
Image credit: Bob Cuthill | Getty Images
Guest Writer
CEO, Rocksauce Studios
6 min read
Opinions expressed by Entrepreneur contributors are their own.

For a long time, HBO operated as its own little fiefdom within the larger kingdom that was Time Warner. For fans of the premium cable and satellite television network, this power scenario was part of what made HBO special.

For AT&T, which recently purchased Time Warner, it was simply a case of bad business.

One of the first things AT&T did upon completing the purchase was to hire former NBC entertainment chairman Bob Greenblatt to oversee all of the company’s TV properties and find ways to break down the silo arrangement HBO held so dear. While some observers might consider this worrisome news, from an artistic perspective, the move was hard to challenge from the business side of things.

In fact, silos -- whether they exist in major media conglomerates or rapidly growing startups -- are rarely good for business. A silo, in many ways, acts like a small startup within a startup. Rather than making choices that benefit a company as a whole, a silo's inhabitants often end up making decisions that benefit their own departments instead.

In the case of Time Warner, the existence of silos made it more difficult to compete against behemoths such as Disney and NBCUniversal. In the world of startups, silos can kill a company’s ability to grow altogether.

Why silos can be toxic.

Silos can spring from a variety of sources. Long-running projects or departments, for instance, often develop a collective groupthink over time, making outside opinions unsought and unwelcome. Alternately, in the world of fast-moving startups, looming deadlines and shifting demands can lead to people relying on their own knowledge and biases rather than discovering the actual best solution.

Related: Ditch Those Silos! 3 Ways to Embrace Cross-Departmental Relationships

Now, consider the impact of silos on a startup. Whatever their cause, silos of all types -- to my way of thinking -- end up encouraging stagnation and stunting growth. When each department looks out for itself, employees come to fear outside opinions and new ideas because they threaten the security of the walled-off group. 

Silos are part of the reason Microsoft lagged behind when the world went mobile. They also played a part in some of Google’s big stumbles, such as the demise of Google Plus.

Now, think again about startups: It’s not enough for a startup to grow; it has to be able to handle that growth. Silos tend to spring up when management fails to recognize that a company is no longer a handful of scrappy entrepreneurs but an increasingly large, successful organization. To ensure that growth doesn’t kill your startup, it’s important that you be proactive when it comes to breaking down these walls --before it becomes too late.

How to stop silos before they become a problem.

When it comes to preventing silos, the basic goal is to find ways for disparate employees to not only work together, but also educate and train alongside each another.

Related: How Investing In Employee Training Benefits Your Business

Here are a few techniques I practice at my own company to create a more collaborative atmosphere and neutralize silos before they have a chance to develop:

1. Create cross-departmental teams.

No matter how skilled a team is, the solutions it devises will always suffer from blind spots if the team members are too insulated. Bring in stakeholders from any and all groups that might  be affected by the solution, and use these people to create a better product.

To encourage collaboration, institute a rotating spot on every team, switching out one position each at regular intervals. That way, the team will always include someone who can contribute a different perspective to the process.

Microsoft, once the king of silo culture, is now a shining example of a company that regularly cross-pollinates. The 44-year-old company made a conscious effort to change its traditional way of operating to better compete. Its design teams now work side by side, even while their members work on different projects, and employees from every division are invited to design meetings so that everyone remains on the same page.

2. Spread out the workload, randomly or otherwise.

Project-management company Basecamp is a prime example of a startup that successfully avoided creating silos as it grew. To wit, Basecamp breaks its production calendar into six-week cycles (with two weeks off in between for housekeeping tasks and recalibration), and assembles its teams ad hoc after surveying employees about what type of work they'd like to do next.

"Teams either coalesce around areas of interest, or we assign people to a team based on their preferences," Basecamp CEO Jason Fried has written. "Teams often change up after the cycle so everyone gets a chance to work with different people, but sometimes they stick together for a few cycles."

This inclusive organized-chaos approach to project assignments prevents the emergence of silos, helps foster a strong corporate culture and keeps talented workers engaged.

3. Bring in real users regularly.

A company knows what it’s building. Strangers don’t. When silos form during development, that situation can lead to a product that no one but the development team knows how to use.

An outside user can clue in developers on where something should be made clear or where a tutorial or user manual would be helpful. These small tweaks can ultimately make a huge difference.

General Electric is an excellent example of a company taking this technique to heart, removing any distinctions between communication that comes from inside the company and communication that comes from outside. GE's goal is to get feedback from everyone who wants to provide it. The company has even utilized crowdsourcing to hear directly from customers during the development process.

Related: Innovation a Problem? Go Back to 'Day One' the Way Amazon Constantly Does

Silos can build up over time without leaders even realizing it. That’s why it’s so important to be proactive in eliminating them, especially during times of growth. By creating a workplace that encourages collaboration, and engaging with outside perspectives, a company can go from a startup to a Fortune 500 without killing what made it great in the first place.

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