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The silo effect or silo mentality in organizations, when one group’s specialization walls then off from everyone else is often viewed as a consequence of growth.
But todays guest, Sarah Siwak Co-Founder and Chief Revenue Officer at Airhouse, says that the silo effect shuts out more than it shuts in and hurts the bottom line.
And in this insightful interview she share more about what those costs actually are.
What You’ll Discover About the Silo Effect:
* How the silo effect reduces productivity
* Why the silo effect slows the scaling of your business
* How cross-functional teams combat the silo effect
* How to incentivize better communication to limit the silo effect
* And MUCH more.
Guest: Sarah Siwak
Sarah Siwak is proof that staying in one lane is rarely the best option.
After obtaining her B.A. in Russian, she stepped into a marketing and web production role at an early-stage tech startup in Tokyo. Armed with a new-found love for both marketing and tech, Sarah went on to lead marketing initiatives for several large, innovative players in the industry like Zenefits, Heap, and Shyp. Now, as the Co-Founder and Chief Revenue Officer at Airhouse, she’s applying lessons learned from her less-than-traditional path to power logistics solutions for emerging direct-to-consumer e-commerce brands.
The single-minded pursuit of narrow expertise has its perks. But so does intellectual omnivory. When it comes to navigating dynamic business landscapes, the broader your palate, the better your chances to survive and thrive.
That kind of intellectual omnivory — a boundless appetite to learn, coupled with a capacity to see the hidden threads among disparate ideas — comes naturally to Sarah Siwak. As Chief Revenue Officer and Co-Founder of direct-to-consumer e-commerce logistics solution Airhouse, Sarah is living proof that staying in one lane is rarely the best option.
After obtaining her B.A. in Russian, she stepped into a marketing and web production role at an early-stage tech startup in Tokyo. Armed with a new-found love for both marketing and tech, Sarah went on to lead marketing initiatives for several large, innovative players in the industry like Zenefits, Heap, and Shyp.
Now at Airhouse, she’s putting a lifetime of intellectual omnivory to good use by helping direct-to-consumer e-commerce brands simplify the costly, unpredictable business of getting their products into the hands of buyers
Related Resources:
If you liked this interview, you might also enjoy our other Leadership and Management episodes.
Contact Sarah and connect with her on LinkedIn, and Twitter .
And be sure to check out Airhouse.
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WHY LEADERS NEED TO BEWARE OF THE SILO EFFECT WITH SARAH SIWAK
The silo effect or the silo mentality in organizations when one group’s specialization walls them off from everybody else, it’s often viewed as a consequence of growth. But today’s guest says that the silo effect shuts out more than it shuts in, and it hurts the bottom line. And in a minute, she’ll tell us more about what those costs are.
This is Business Confidential Now with Hanna Hasl-Kelchner helping you see business issues hiding in plain view that matter to your bottom line.
Welcome to Business Confidential Now, the weekly podcast for smart executives, managers, and entrepreneurs looking to improve their business performance and their bottom line. I’m your host, Hanna Hasl-Kelchner.
I’ve got a super guest for you today. She’s Sarah Siwak. Sarah is proof of the power of interdisciplinary experiences and how staying in one lane is rarely the best option. After getting her bachelor’s degree in Russian, she stepped into a marketing and web production role at an early-stage tech startup in Tokyo.
Then, armed with her newfound love for both marketing and tech, she went on to lead the marketing initiatives at several large organizations, and today, she’s the co-founder and chief revenue officer at Airhouse where she’s applying the lessons learned from her less than traditional path to power logistics solutions for emerging direct-to-consumer ecommerce brands. And along the way, she’s encountered the silo effect.
So I’m really curious to learn more. Welcome to Business Confidential Now, Sarah.
Hi, Hanna. Lovely to be here.
Great to have you. Now, you really do have a unique career path and a fascinating career. So please tell us a little bit more about how you’ve encountered the silo effect.
Yes. So, I have spent most of my career in building B2B software, high-growth B2B software. And so I’ve been an organization with all different sizes.
One thing that I always sort of kept tabs on and something that I started noticing with each role I’ve had in each company I’ve worked at is, inevitably, there is a point in a company’s life cycle when communication really starts to break down, when teams start thinking a little bit differently about the customer or the product, or just what everyone is sort of doing, what the goal of the company is.
And it is probably one of the biggest problems, in my opinion, in sort of scaling an organization or growing any kind of company, because when you reach the point where you really need to start growing a company and replicating what’s working well, it’s all about execution. And this is one of the main things that gets in the way.
So, tell me more about how it’s getting in the way. I mean, it sounds like a big communication issue, but what’s the fallout of not having the good communication? I mean, everybody’s doing their thing. They’re doing what they’re supposed to. Don’t the puzzle pieces just come together by themselves?
That would be lovely, I think.
I guess that answer is no.
My job would be easy. Yeah. I think one thing I used to believe is that silos were kind of an unfortunate accident when I think now that they’re kind of by design. And what I mean by that is I don’t sit down and I don’t think a senior leader at a company or an owner of a business sits down and thinks, “Man, I’d really love it if no one communicated. How do I make that happen?”
More comes out in sort of the norms that we have around careers, the norms that we have around work and whether or not they actually match the need of the business. So, I think about that in a few different ways, but one of the first that comes to mind is incentives.
So, a silo, if you’re really good employee, say you’re – I’ll use marketing as an example because that’s my background. It’s really not my problem as a marketing manager in any kind of role to break down a silo. It becomes more of a problem for senior leaders and business owners.
So there’s not much incentive for me if I want to do my job really well, to kind of go in and figure out, okay, how do we communicate across the company? The cost isn’t on me. The cost goes to the organization, not to the individual.
So, naturally, it’s kind of asking more of the employee to be able to think across all of these disciplines. It’s another layer, I would say, on top of how most people talk about work. So, I think if you really want to be very good at your job and contribute to the organization as a whole and think of the organization as a whole, then you might think about it a little bit differently.
But just the average person, individual contributor or silo, kind of not their problem. It might be a little annoying, but it’s not expensive. So there’s no real incentive, I would say, for an employee specifically to kind of break down the silos or to do the things that are expected of them in their specific role.
And that’s usually not defined as a job responsibility. I think at the core of it, though, are a few other things. One thing I’ve noticed is in business, there are so many different types of businesses, so many different funding models for businesses. If you take two people who work in business broadly, they will think about their work really differently; small business, Fortune 500 company, high-growth startups.
So, I think one thing that contributes to silos, it’s kind of a quiet one, is not really understanding the whole. So, what I mean by that is if you kind of think of other professions, like medicine is a good one that I like to compare this to.
If you’re a doctor, let’s say you’re a heart surgeon. Every doctor kind of needs to study all of the systems of the body. You don’t just study the heart. And you understand that the goal of medicine is to kind of create a body to help people manage illness or to help people be healthy.
But if you’re hired in any kind of business, really, at any point in your career as an engineer, say, or a marketing manager, in order to do your job just well enough, you don’t actually really need to understand all of the parts of how the business functions.
And so I think that’s why you see the people who are, if you’re starting a business or if you’re a senior leader of a business, you have this unique vantage point where you see across all of the teams.
But you can work your entire career staying very – being a very good marketer within – depending on the part of marketing that you’re working on, only focusing kind of on marketing, you don’t really need to know what finance says. You don’t need to know what engineering is necessarily doing.
I’ve worked with marketers who did their job well enough and three years into the company kind of didn’t even really know what the product did. And so it’s kind of shocking if you lay it out that way. But fundamentally, that’s also how people are trained. That’s how people start their careers.
They think, you know, I’m an engineer, I’m always going to be engineer. Same thing with marketing. That’s my career path. So it’s a little bit more obvious to me, this sort of distinction, because my own background, like you mentioned, I studied Russian. I did not study business. I did not study tech. I sort of had to feel my way around and learn about these things.
So, the way that I think of careers is very much a lateral kind of lily pad sort of way.
So, I think in an interdisciplinary way, a little bit more naturally, but it’s not the norm the way that we talk about careers or building teams for people to kind of hop from function to function. So there’s not a lot of, like, connective tissue between that. So it has to be kind of intentionally created in a company.
If you’re asking for engineers, we do this a lot at Airhouse, everyone sort of has a shared understanding of the customer. We all understand what everyone else is up to. Everyone sort of gets exposure to different areas of the company. But a lot of companies I’ve worked at, you know, you can join within the marketing team and talk to the marketing team and never really talk beyond the team.
So, it’s that specialization when it comes to the role, but also the specialized way that we think about teams, and in reality, where a silo pops up where it’s kind of surprising that it pops up, is a common one is marketing and sales, where they’re both kind of doing the same thing. But I’ve worked, again, with people who kind of don’t cross that line, and you’re so much better as an individual employee or as a manager.
And the work, the quality of your work is so much better if you’re just able to kind of plug in to whatever team or person you’re adjacent to. You communicate better naturally by understanding a little bit more about what people are up to.
So I understand that, you know, sometimes these just – silos pop up, as you say, because there’s really not an incentive for people to reach across the aisle, as you would say. But at the same time, I believe I read somewhere that you mentioned it stops increasing productivity.
I’m interested in what these hidden costs are that are not obvious because, yeah, these functions, they all kind of operate independently and somehow the pieces come together. How could they be coming together better? Where are the costs that are creating some inefficiencies by having these silos?
I think it pops up most when you’re looking at, for example, if you’re creating a marketing campaign and we’re talking about kind of trying to understand the customer. And if you have a deep understanding, marketing thinks about customers in one way. They have different frameworks from, for example, the sales team, how they create personas.
They have different frameworks from how a product team understands the customer. So one really specific example is even with my own marketing team, it’s very natural for a marketing team to do an interview with a customer and only come at it sort of from a marketing perspective.
But if they talk to the salespeople and how they think about the customers and the piece of the customer that the sales team experiences, it increases the overall quality of work. So, one cost is just that the work is not as impactful as it could be.
You know, you can operate a business with silos, but it’s kind of breaking those down is the difference between good and great. And so that difference between good and great could also translate into, in some cases, the survival of the business and a really competitive landscape.
If your competitors are able to do this a little bit better, it’s all about execution and impact, but another really explicit cost is just the need then to hire people who have very cross-functional roles. So we’re a lean team, not sure I mentioned, but if we’re right over the 30-person threshold, there are some functions that we don’t have, and that’s because the teams are able to sort of meld and merge a little bit better.
So there’s a direct sort of cost of hiring. We need to hire more people. If you have more silos who are focused specifically on communication, and then things just move slower. So it’s like if you’re baking a cake and one person knows how to operate the oven and the other person knows how to mix, the other person knows how to decorate, it’s potentially faster.
You can create a better result, but also potentially faster if one person just knows how to make the whole cake. So it’s a question of scaling; how easily you’re able to scale, how affordably you’re able to scale a business.
Well, the scaling, definitely, but I would also think that if, you know, one person is not showing up that, then that whole piece falls between the cracks.
You know, having cross-functional training allows people to jump in, whether that other person is on vacation or needs to take some kind of maternity or paternity leave or decides to just, you know, give two weeks’ notice and say, “See ya, I’m going someplace else,” so that there’s not that loss, total loss in continuity, that somebody has some idea of how to fill the gap until the next person can be hired.
Exactly. Yeah. I think especially, you know, the smaller the company is, it creates more redundancy simply for people who understand what other folks are doing. Absolutely.
Redundancies are not necessarily a bad thing. Hospitals have to have multiple redundancies, because if one system goes down, you can’t afford to have the lights go out in the operating room.
Exactly.
Right? So…
Exactly.
But I’d like to come back to what you said a little bit earlier about communication. And what do you recommend a growing business such as yours do in order to encourage communication so that people don’t get too embedded in their little silo bubbles to the exclusion of everything else? Because I’m happy in my own little space here and I don’t need them.
That’s a tough one. I would say we’re still figuring parts of it out, especially with being a hybrid company. So we’re partially remote, partially onsite.
I think a lot of companies are now after being years into the pandemic. So I think that there are a few mechanisms, few tools that people can use, one that we use as sort of documentation and trying to write as much down as we can so that people that are in different time zones kind of can experience that information, read that information, get caught up. So, that’s one thing.
Another are just encouraging, you know, when we have our broad company meetings, something that we do at Airhouse, people would expose the nuts and bolts of the company a little bit more so everyone understands the goal that we’re chasing. Everyone has a shared understanding.
So from a leadership perspective, it’s really reinforcing, “Here’s what we’re doing, here’s why we’re doing it,” so that people can understand how their role plugs in and how other people’s roles plug in. So, it’s just creates a shared mindset. I think that’s probably the biggest piece of it.
But then even in a day-to-day managerial sense, I like to encourage my team. A lot of my conversations with them are kind of around breaking their frameworks for how work should look a little bit and encouraging just problem solving as opposed to helping them sort of expand a little bit beyond.
Here’s what, say, a person in this role would do or here’s what this function does, here’s what marketing does to just generate sort of a little bit more of curiosity or create access to talk to people outside of their day-to-day scope of work. So it kind of is a little bit implicit, but it’s helping from a leadership perspective. People create a shared point of reference for why we’re here and what we’re doing.
Those are some great tips, Sarah. Thank you for that. I’m wondering how you handle or how you would recommend handling the egos where some people are saying, “No, I’m the expert on this and you can’t tell me over here, you know, this other group, you know, how to do my job or that I need to do it differently.” What do you think about that?
Yes, I mean, I think that is a tricky one. I think – and that’s another thing that creates silos. It’s sort of like once you introduce a management layer, I’ve worked at companies early on that were the managers felt like they had to be the only one holding expertise, then they sort of let it out in little drops to their team or would let it out to people they’re working alongside.
I think, ultimately, it’s, again, it’s a leadership thing. It’s setting a tone, sort of not tolerating it from a performance standpoint and rewarding the opposite. So we try to create an environment where it’s explicitly expected to sort of share that knowledge and to make mistakes and encourage people to just try different things.
I think a lot of that comes from that, like, gatekeeping. That access comes from work environments that where people don’t feel safe in their roles to sort of share information. So I view it as kind of a cultural thing.
Yeah, that’s a great observation about people not feeling safe and that they’d be threatened that the information gives them power, not recognizing that sharing the information and allowing other peoples to build on it actually gives them more power and the ability to do more.
You mentioned earlier, too, about work structures not creating incentives for people to reach over to other departments or areas. I mean, with 30 employees, you may not have formal departments, but you do have some specialized areas that people focus on.
I’m curious what kind of incentives you suggest or maybe that you’re currently using in order to help promote that, because it’s one thing for you to ask people and bring them together and give them information, but how do you incentivize people to kind of do it on their own to motivate them to seek it out?
Yeah, for me, it goes back to typically the – when we think about promotions or we think about performance management, we try to be more explicit about what is expected for people sort of perceive a promotion to – or to become a leader in the company.
And one of those things is creation of shared cultural values, of not creating silos, of how we communicate. And so it’s a matter of just putting that into practice and making it explicit for people, I think in a lot of companies, because silos and all of these things, all these norms are kind of softer values. It’s easy to not really engineer them or focus on them.
The other thing I do is I also like to make it explicit in job descriptions, actually. So when we’re hiring people, some of the bullet points in an actual job description just from the outset before, while we’re still interviewing, will be here’s the expectation.
So a lot of the time, again, these expectations of people around creating a company culture, creating sort of battle rhythms or ways of operating is very implicit. And when people come from a lot of different backgrounds, a lot of different types of companies and work experiences, I think it’s important to just make very explicit.
That’s great, because otherwise they’ll just bring their bad habits with them because…
Right. Yeah.
…that’s the way they’ve always done it, right?
Right.
So I think that’s marvelous that you’re making clear these expectations about the culture and how you want to communicate, because at the end of the day, that’s really what it’s all about.
You know, Sarah, we have covered a lot here when it comes to silos. And before we wrap up, I’m just wondering if there’s anything else that you’d like our listeners to know about the silo effect that we haven’t talked about yet?
Yeah, one of the main pieces of it is, at the end of the day, I think it really just requires that we challenge how we think about work as a whole and we don’t kind of copy paste from what has been successful at another company or, you know, that perhaps as a competitor or another company in the past.
The way that I think about work is, you know, the ground is always moving beneath our feet, and the way that we do work now is different from the way that we did work even two years ago, five years ago, ten years ago. So it’s really challenging, or at least understanding that these things are norms that we inherit within industries and things that we can be deliberate about.
So it’s being aware of if this is how we’re talking about work, knowing that not everyone needs to talk about work this way or we don’t need to necessarily have very specialized teams, or we can create it our own way, we can design it our own way. Everyone is kind of playing in a different environment, a different competitive landscape. So it’s really challenging how we think about things in general.
Well said. This is great, Sarah, thank you so much. I really appreciate your time and the effort that you’re expending in shaping the culture of your organization as it’s growing to be able to manage and not have the negative impact that silos can have so that you get the benefits of silos, not the downside.
So if you’re listening and you’d like to know more about Sarah Siwak and her work at Airhouse, that information as well as a transcript of this interview can be found in the show notes over at BusinessConfidentialRadio.com.
Thanks so much for listening. Be sure to tell your friends about the show and leave a positive review. We’ll be back next Thursday with another episode of Business Confidential Now. Until then, have a great day, and an even better tomorrow.
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