Process-oriented organizations break down the barriers of structural departments and try to avoid functional silos.
I was wondering what silo means here? Is it a metaphor?
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Yes, silo is being used as a metaphor here, not an actual silo. According to the Oxford Dictionary, there is a literal meaning of silo:
- a tower or pit on a farm used to store grain.
** a pit or other airtight structure in which green crops are compressed and stored as silage.
Then there is also the metaphorical meaning:
- a system, process, department, etc. that operates in isolation from others
You can read the dictionary entry for another example of a metaphorical usage.
I have came across this term when I attended a workshop on "Balanced Scorecard" for performance measurement in a non-for-profit organization a few years ago. My study manual for the course put it as this: "A functional group or department within an organization that acts as a silo or island in its lack of interaction with other groups and in not sharing its internal data or processes".
"Silo" in this context needs to be understood along with the word "functional silo":
A functional silo exists when the business processes of a functional unit within the division of labor of an organization focus inwardly on their functional objectives. This becomes problematic when the direction of focus creates barriers that do not serve a reasonable business purpose and negatively impacts the unit's ability to serve their role in the broader mission of the organization.
"Functional silo" is a technical term, and further explained here why process-oriented organizations particularly one to avoid it:
A term used within business process re-engineering (BPR) to denote areas within an organization where managers occupy a privileged position in terms of resources and influence, and where they use this for their own, self-interested, functionally-oriented motives rather than for the wider benefit of the business. BPR recommends the removal of a function-focused approach and its replacement with a process-focused approach, thereby destroying the functional silos and encouraging cross-functional integration.
Yes, silo is a metaphor.
If you think of a grain elevator which is a collection of bins. Every bin could have a unique product and once a product is there it just sits. It should have no interaction with any other silo. The other silos can be emptied shipped refilled with new product, etc. But, it does not affect the silo in question.
In an organization, there are people and groups that behave in the same way. Their little piece of the world does not interact with the rest of the organization. They make decisions without consideration of how they affect the rest of the business. Like grain silos, they have (and work to maintain) barriers to groups around them. Typically they are perceived as being less interested in the overall success of the organization than to maintaining their normal state.
I'd never heard of this metaphor, but Wikipedia has. It's a rather strange (to my thinking) metaphor for isolation: I think the origin of the metaphor is the idea that grain silos don't communicate with each other.
Reading over the myriad of answers has left an impression that such a functional silo in an organization or business is inherently negative. Yet in reality it definitely has a very positive place. Certain high level communications are best made where tight controls are in place, limiting access.
In addition there is this other notion that communications within a silo don’t take into account those outside the silo. That is false. A healthy business with layers must take such considerations of the whole as well as other parts.
Any business including nonprofit organizations must be profitable to grow by adding new staff at all levels. Silos are good when properly operated. Poorly operated silos become structurally unsound and can lead to a collapse or worse.