Silos may be a great way to store grain, but can cause problems when silo mentality runs unchecked in a company.
Silos are not necessarily a bad thing; they often foster expertise in different areas and promote a sense of individuality, accountability and responsibility, as well as ensuring focus around specific business deliverables. These are all good things, so why are they the biggest hindrance to corporate growth?
In an ideal world, silos would be:
- Transparent - allowing people to see inside the silo, enabling people to understand what that silo is working on and reassure them the work is in the best interest of the organisation.
- Permeable - allowing information to flow in and out of the silo, enabling other groups to leverage the expertise and information best across the entire enterprise and also allowing the silos to better understand their impact on the organisation.
But these types of silos rarely exist. Silos tend to encourage behaviours that are beneficial to the occupants of the silo, but are often not in the best interest of the overall business or its customers. It also plays into the hands of corporate politics, since silos help to keep things private. And we all know that in office politics information is power.
Silos restrict clarity of vision across the organisation, and they breed mini fiefdoms where people are less likely to collaborate, share information and work together as a cohesive team. Not surprisingly this leads to poor decision-making as well as impacting on morale within a company, its efficiency and profitability.
All to often silos are not aligned, frequently KPI’s of different silos actually conflict with each other and everyone will focus on their own KPI targets to achieve their bonuses.
Each silo has its own view of the customer and the landscape they exist in, each from its own perspective. This causes the customer to see the organisation as disjointed and dysfunctional, leading to a lack of trust, irritation and creating a feeling that the company is simply incompetent.
Types of Silos
Within a business, silos come in many shapes and colours – functional, channel and even hierarchical silos all of which demonstrate inside out thinking.
Operational silos – Functionally based
- Where customer support isn’t connected to marketing - a big ad campaign goes out leading to a rush of calls, but the call centre hasn’t been briefed and as such is understaffed. So people have to wait long times or simply give up, resulting in angry frustrated customers and a waste of marketing spend.
- Finance and marketing not interacting - a company makes a credit card offer to customers, only to have the customers apply and be turned down because the company didn’t credit score them prior to sending the offer out. This results in angry customers who have had their time wasted, damaging your brand.
Channel silos – Interaction based
As new channels and touch points emerge, old ones don’t disappear. Technology has and will continue to create more channels that affect the customer.
The majority of businesses have a separate approach to managing their various touchpoints yet they still expect customers to be able to hop between these channels in one seamless interaction.
Today, organisations are finding it is their customers who are now dictating the communication channels. So it is more important than ever to ensure that you act and speak in one voice - giving a consistent message & customer experience across all channels & touch points… but this rarely happens.
Research conducted by The Economist Intelligence Unit, which surveyed 491 senior executives across the world, with 55% based in North America, 35% in Europe and the remaining 10% in the rest of the world and found like in other industries, retail executives blame silos within their organisation for the failure to join up their various sales channels.
When asked what obstacles stand in the way of improving their organisations customer experience, silos within the organisation & lack of integrated information systems were the reasons most frequently given with a whopping 27% each. Another 19% said lack of consolidated 360° view of the customers across touchpoints. And 16% quoted a lack of employee incentives for collaboration
The survey also found that less than half (48%) of retailers have set up an integrated customer response unit and even more worrying over a third (34%) said that each channel management team handles its own complaints and negative comments.
Hierarchical silos – Organisational level based
Silos can also occur among organisational levels when team members are either inhibited or actively discouraged from engaging senior leaders without going through the correct protocols and channels. It is often found that communication patterns are extremely hierarchical and employees communicated extensively within their own levels, but there were far fewer cross-pay-grade interactions.
Smashing your silos
The situations created by the above silos are costly, avoidable and all due to poor communication between different parts of the company. Ultimately this leads to loss of sales because the customer will go elsewhere, where it is easier to do business. So why does it keep happening and what can we do to stop it?
The first step is to break down the silos. Companies have begun to recognise the crucial importance of this, which is why in the last five years we have seen the rise of the Chief Customer Officer (CCO).
More importantly, how do you begin to create an outside-in customer centric structure in your organisation? There are a few core things you need to do:
- Focus on the customer, paramount to success is staying close to the customer of your product or service and learning how you are missing, meeting or exceeding their expectations. Start to bring people together so they begin to understand the inter-dependencies between departments and the impact it has on customers
- Freely share information across the enterprise and delivering it into the hands of those people who impact on the customer. This will discourage information hoarding and improve collaboration.
- Create an atmosphere where collaboration, teamwork, trust and open communication are encouraged. Developing cross-functional teams is a great way to make this happen
- Get people to see things from someone else’s perspective. Rotating personnel in various jobs around the organisation can help you achieve this goal
- Connecting all your touch points and channels, to enable all the people who come into contact with customers to have accurate, timely and relevant information about the customers so that they can make the right decision, at the right time, in the right channel
- Reward collaboration; if your reward system rewards individual achievement change it to reward collaborative performance as well. Recognise and reward people who work across organisational boundaries and share their stories to the whole organisation
- Finally, to make this really stick, you need to change the way you measure success and align KPIs across the entire organisation enabling you to drive the right behaviours. We all know that what gets measured matters, so if every employee and manager gets measured, rewarded and bonused on delivering successful customer outcomes, it will focus the mind
The work that it will take to break down your existing silos isn’t going to be easy, but it is necessary in the long term if your organisation wants to stay competitive and profitable.
Amy Scott is a Comotion Associate, specialising in Service Design and Customer Experience