Executive Insights | November 2012 | By Julie Knudson

Beware the C-Suite Silo

A commitment to collaboration ensures your leadership team moves forward together.

Miami Subs CEO Richard Chwatt says having a consistent brand message is key.
Miami Subs Grill CEO Richard Chwatt says having a consistent brand message across the C-suite is vital to a company’s success. Miami Subs Grill
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When things get busy in the C-suite, people can become so focused on their own areas of responsibility that communication streams slow to a trickle and walls form around one or more departments. These silos—where individuals or even entire functional groups turn inward—can be dangerous to an organization’s overall health.

But CEOs are in a prime position to break down barriers and encourage collaboration.

Russ Bendel, president and CEO of Irvine, California–based Habit Restaurants, says when communication at the C-level is lacking, there’s a chance that people will go in directions that don’t match the organization’s goals.

“They can wind up at a place that isn’t where the concept should be headed, or where the CEO or the team thought they were going,” he says. Open communication and regular collaboration across the company ensure that each functional area is supporting the organization’s overall mission and brand message and puts a halt to silos before things get “too far down the road,” Bendel says.

A holistic view of any company begins at the top, adds Adrie Groeneweg, president and founder of Orange City, Iowa–based Pizza Ranch. “Your key people need to know what’s going on everywhere, not just in their own area,” he says. He adds that a strong connection among departments makes for a healthier organization, and regular communication is essential. “That’s when teamwork happens and everybody works together,” he says.

Maintaining tight collaboration among the leadership team allows everyone at Miami Subs Grill to “speak with one voice,” says CEO Richard Chwatt. It’s a mission that’s particularly important now, as the South Florida brand is going through a revitalization process.

“You cannot have one message talking about the old food and another one talking about a Latin fusion,” Chwatt says. “Everybody’s got to be focused.” From manufacturing to sales, he believes every person has to be clear on what the rebranding message is so they’re working toward the same goals.

To ensure the team is moving forward together, Chwatt meets with his department heads each week to hear the concerns, suggestions, and feedback of others on the team.

“I make sure everybody is on the same message,” Chwatt says. The meetings go beyond just the usual status updates; Chwatt says he also focuses on making sure his team understands where the brand is and where it’s going at a high level.

Bendel says it’s up to CEOs to ensure their leadership teams are working together to maintain their brand’s competitive edge. Monthly senior leadership meetings at Habit Restaurants provide team members an avenue to discuss various strategic projects. But Bendel says he also encourages the group to get together through more informal interactions to keep everyone in sync.

“I think collaboration requires communication, and the organization needs to have channels that either allow (or force) the team to communicate much more openly,” he says.

Pizza Ranch also has an annual leadership retreat that brings Groeneweg’s executive team together to brainstorm across departmental lines on high-level topics. In addition, department heads get together every 12 weeks for daylong meetings, where they are able to present their area’s status updates to the group. “Everybody is very aware of what’s going on, … where we’re going, what the vision or mission of each department is, and what we’re doing to keep striving toward that,” Groeneweg says.

Bendel says ensuring each member of the leadership team is a match for the company’s culture is a crucial part of his role, too.

“As a CEO, it’s incredibly important that you not only have people on your team that are qualified technically and have the intellectual horsepower required to be responsible for their area, but also have people that fit the cultural personality of the organization,” he says.

A company culture that’s rooted in collaboration can also lead to deeper benefits within the organization, Groeneweg says. “People respect each other,” he says. “They learn why people give a certain opinion, and learn who that person is. It really unites an organization.” He says it’s good for the leadership at Pizza Ranch to share their thoughts, and he’s watched his team use the diversity of perspectives to strengthen the company.

Operating in silos can be a danger for CEOs, too. One of the ways Chwatt makes sure he doesn’t get focused too intensely on any one area is through regular communication across the company.

“We hold town-hall meetings every couple of months, and we bring in all the franchisees,” he says. Chwatt also communicates frequently with his leadership team, as well as with the board of directors. “I’ve got a great board,” he says. “We meet at least every other week, and we’re on the phone three times a week. They keep me focused.”

Groeneweg believes so strongly in the benefits of collaboration that he encourages his team to look for collaborative personalities early in the hiring process. It’s a good opportunity to ferret out any candidates who might not have the open mind necessary to listen to and value the input of others on the team, he explains.

For his part, Groeneweg doesn’t worry much about slipping into the silo mentality himself. “I like to be involved in everything,” he says with a laugh.

This tendency to communicate and work as a team is a personality trait Groeneweg believes is common among many restaurant industry CEOs. “I think it’s very typical of people to be that way if they’re in charge of a lot of different people,” he says.