The silo trap: Why your teams aren’t talking –and it’s costing you millions

In my many years of global experience advising some of the world’s largest family business conglomerates, famous multinationals and Fortune 500 CEOs, I’ve seen a pattern repeat itself like clockwork: silos. Call them departments, units, regions, or teams—it doesn’t matter. When they stop talking to each other, your business starts dying from the inside out.

I have rarely encountered a business without silos. Even presidents or CEOs usually do not see the hidden costs associated with silos because they remain in the dark.

What is the silo effect?

The silo effect is not just an operational inefficiency; it’s a cultural cancer. Left unchecked, it creates duplication of efforts, stifles innovation, delays decision-making, and most dangerously, makes the business slow, bureaucratic and vulnerable to disruption.

Your enemy isn’t external competition—it’s internal division.

The silo effect refers to when teams or departments operate in isolation, hoarding information, protecting their turf and prioritizing their own KPIs (key performance indicators) over company-wide outcomes. It’s tribalism disguised as specialization.

I advised a multibillion-dollar consumer goods family business in Asia. The marketing team and product development team hadn’t had a proper meeting in six months. Each was launching initiatives based on different data, resulting in a failed product rollout and $40 million in lost sales. Not because the product was wrong—but because the teams were operating in silos.

At another one of my clients, a French luxury goods family business, a Chinese Wall divided the marketing and the creative teams. They had not had a sit down together in 10 years. “This is wrong,” I said to the family. “You are leaving a lot of money on the table. The correct principle is: the marketing needs to inform the creative process. Data is vital in the creation of new products. Otherwise you are losing millions because you are missing product-market fit.”

Are you suffering from the silo effect?

You might be experiencing silos in your company if you notice:

• Lack of communication: Teams don’t share updates, learnings, or data.

• Duplication of work: Different departments solve the same problem separately.

• Misaligned goals: Each department works toward internal success, not shared vision.

• Reduced agility: Leadership is forced to piece together information manually.

• Internal competition: Politics and ego drive decisions more than strategy.

In family businesses, silos often take on a more subtle and dangerous form—family branches creating internal Chinese walls. Cousins or siblings who run “their piece” of the empire with little transparency or cross-collaboration.

The business cost of silos

Here’s the part most CEOs underestimate: silos are expensive. In hard numbers and missed opportunity.

• Delayed decisions: Projects stall due to missing inputs.

• Reduced innovation: Great ideas die in departmental echo chambers.

• Disengaged talent: High performers leave out of frustration.

• Customer dissatisfaction: Fragmented experiences damage your brand.

• Revenue loss: Opportunities are missed because the left hand didn’t talk to the right.

In a US-based family-owned tech company, one division had built a solution almost identical to what another division was spending millions developing. Why? Because they didn’t know the other was working on it. Classic silo effect. Avoidable. Costly.

How to break the silo mentality

Silos don’t break themselves—you must smash them deliberately. Here’s how world-class companies and agile family businesses do it:

1. Build cross-functional teams

Create tiger teams or task forces that include members from multiple departments or business units. When you give a shared goal to a diverse team, the collaboration becomes baked into the process.

Example: At one Middle Eastern family conglomerate, we created “Growth Squads” made up of members from sales, product, finance and marketing. Their mission was to identify and act on high-growth opportunities. The result? Faster execution and fewer missed signals.

2. Create transparent communication channels

You don’t need more meetings—you need better communication. Use centralized dashboards, weekly alignment calls and shared platforms. Make visibility default, not optional.

Pro Tip: We implemented a “Friday Sync Digest” across several client companies—a 5-minute update email from every key team, shared company-wide. It reduced miscommunication by 70 percent.

3. Align on common goals

Make sure every team’s KPIs roll up to a common North Star—whether it’s customer experience, revenue growth, or market leadership. Departments should not win while the company loses.

This often happens because of a complete misalignment between company goals and department KPIs.

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4. The power of the right KPIs

Actionable tip: Require every department head to report on how their function contributed to enterprise-wide goals—not just their silo metrics.

This is only possible with the right KPIs. Most companies have no idea how to set KPIs correctly. They must be orchestrated across the entire organization to deliver value to what matters most: the final output or goal of the business, whatever that may be. This is not an easy thing to do, this is why most companies fail at it.

5. Empower leadership to set the tone

If senior leaders don’t collaborate, no one else will. A C-suite must visibly model cross-functional respect and information-sharing. In family businesses, the founder or patriarch/matriarch must publicly endorse collaboration—especially across family lines.

A CEO I mentored began each Monday executive call with a five-minute “Collaboration Shoutout”—highlighting moments when teams broke silos to help each other. It shifted the culture from competition to cooperation.

5. Invest in collaboration tools

Don’t rely on email. Invest in modern platforms like Slack, Notion, or project management tools that allow asynchronous, cross-team collaboration. Especially critical in remote or hybrid setups.

From silos to synergy

The silo effect is not just a communication problem—it’s a business threat. Left unchecked, it will slow you down, bleed your resources, frustrate your people and hand your market share to more agile competitors.

Family businesses are especially prone to silos—created by family factions, long-tenured department heads, or unclear power structures. The solution is not to centralize everything—but to connect everything.

Great businesses don’t operate as isolated islands—they run like living organisms. Every part knows what the other is doing. That’s how you build speed, resilience and exponential growth.