In many Indian-SME boardrooms and mid-sized companies, a quiet but serious leak is happening. It’s not in the finances, not in the machines, nor even in the market—but in the distance between decision-makers and doers. I call it the “silo effect” the executive team sits in the cabin, charts the course, yet the rowers in the boat feel the water rising around them. The result: strategic misalignment, frustrated employees, slowed speed, and decline in competitiveness.

Why the Silo Effect is the biggest “boat-leak”

Imagine a boat. The executive team (promoters, their family members & relatives) sit at the helm. They set the direction, decide on budget, technology, market push. Below deck, the rowers (operations, shop floor, customer-service, front-line sales) actually pull the oars. If the helm doesn’t feel the rhythm of the rowers, doesn’t see where the boat drags, where the water is splashing, you risk two things: the boat may drift off-course, and worse—you may never know you’re leaking until it’s too late.

In organisational theory, this is classic. Silos form when departments or functions stop sharing information, tools, knowledge and goals. (Ref-Tammi Peters, M.S. HRD+2The Strategic CFO®+2 ) Research shows that when this separation happens, coordination costs skyrocket: meetings, hand-offs, delays. In fact, studies show 50-80% of management timein siloed organisations is consumed in coordination rather than value creation. (Ref-Medium+1)

For Indian SMEs this is especially pernicious, resource constraints, high growth aspirations, multiple roles for people but if leaders aren’t plugged into the reality of execution, strategic initiatives become talking shops rather than engines of value.

The Blind Spot of the Executive Team

What happens when the decision-makers lose touch with the rowers?

1. Disconnected Strategy – Promoters or senior execs decide “We do X to grow by Y%” but don’t validate whether the rowers have the required tools, motivation or clarity. As one post put it:

“By the time the information has traversed the hierarchy … decisions made on information which may not reflect the context at that moment are likely to be suboptimal.” (Ref-Thoughtworks)

Strategy becomes a top-down decree, not a shared journey.

2. Reduced Agility – When execution teams are far removed, they can’t react quickly. The structure slows down response to market, customer or operations issues. (Ref-deepimpactonline.com+1)

3. Morale & Trust Erosion – Rowers feel unseen. Their voices don’t reach the helm. Trust erodes. They may feel: “Why decide on our tools, our KPIs, our process without us?” One study state.

“Siloed thinking … creates confusion and ambiguity … detrimental to motivation and engagement of employees who want to see an impact …” (Ref-MDPI)

4. Budget Cuts That Hurt the Rowers – When cost-cutting is done top-down without understanding frontline realities, rowers lose value producing tools, training, or support. It might look prudent on paper but sabotage speed in practice.

Speed Isn’t About Cutting; It’s About Investing Wisely

In many SMEs I’ve seen, there’s a reflex when growth slows: “Let’s cut overheads, reduce headcount, stop new tools.” But speed in business doesn’t come when you just shrink costs; it comes when you invest in the right people and tools that produce value.

• Support the rowers with clear vision + autonomy. If an operator or service team sees better way to do something, give them a voice.

• Equip them with relevant tools, training and decision-making permission. Being closer to the customer or machine, they will spot inefficiencies faster.

• Ensure the line of sight between strategy and execution is short. The rower must see why they’re rowing, how their effort moves the boat.

• Break down the structural “silos” of separate budgets, separate KPIs, separate objectives. Align them with a common mission: “We move the boat forward together”.

In an Indian SME context if you’re a manufacturing unit in Gujarat with multi-skilled workforce, or a service business in Surat with tight margins speed means empowering the folks on the ground, not just tightening top-line targets.

What I’ve Seen The Most Counterproductive Budget Cut

From my discussions with clients and past audits, one of the worst cuts was cutting training & cross-functional workshops just because “we don’t have budget this year”. When times are tough, rowers need more alignment, not less. Without training, they lacked clarity on new modules, new tools, even new markets. The cut-back created greater drag: more errors, slower processes, higher turnovers. The boat slowed.

Another one freezing or reducing frontline support headcount while keeping senior management staffing intact. The cost appeared in front as “low headcount”, but the hidden cost was slower execution, missed opportunities, frustrated clients.

For Indian SMEs: Three Steps to Plug the Leak

1. Map the Rowers & Ask Them

Conduct a simple survey or “walk the shop floor” exercise: talk to front-line salespersons, machine operators, customer-service teams. Ask, what slows you down? What tool/training do you lack? What decisions do you wait for? Insights will show what the executive team doesn’t see.

2. Align Budget to Value Creation, Not Just Cost Saving
When you look at budgets, ask Does cutting this support our rowers? Will it speed up execution or slow it? Shift from “cut to save” to “invest to accelerate”. Encourage cross-dept budget collaboration rather than each silo defending its own fiefdom. Research shows separate incentives and non-sharing are root causes of silos. (Ref- Medium+1)

3. Shorten the Feedback Loops
Create mechanisms where rowers’ feedback gets to decision-makers quickly. E.g., monthly front-line “challenge and idea” sessions with executives. Keep budgets or initiatives adaptive: if front-line signals a problem, allow nimble reallocation.

In the end, the image is simple if your boat has two sets of crew the helm and the rowers but the connection between them is weak, you will listen to the waves rather than feel them. Speed isn’t achieved by the helm simply ordering “Row faster!”; speed comes when the rowers are motivated, resourced, heard and rowing in sync toward one horizon.

For Indian SMEs modest resources, high ambition, global or export-facing supply chains the difference between success and stagnation may well be how deeply your decision makers connect with the doers. The biggest leak isn’t missing customers or orders it’s the gap between strategy and execution. Plug the distance. Support your rowers. Then you’ll see the boat move.

If this resonates and you want help auditing your current situation around this, I’d be glad to help. Feel free to write on choudhary.nrj@gmail.com alternatively you may call me on +91 79846 17782