Silos may be a great way to store grain, but can
cause problems when silo mentality runs unchecked in a company. We have
all seen silos at work in individual departments, regional offices, different
channels and even in different management levels within an organisation.
Silos are not necessarily a bad thing; they can be beneficial when used properly and provide organisations with a structure that works. They often foster expertise in different areas and promote a sense of individuality, accountability and responsibility. Silos also
act as a method for 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 interests 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 impacts on the organisation.
types of silos rarely exist.
on most occasions, silos 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
survey from the American Management Association showed that 83% of
executives said that silos existed in their companies and that 97% think they
have a negative effect.
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
of businesses’ silos often seems to work against the interests of customers and
simply engineer the wrong behaviours. Since every manager is part of a silo, how often have you experienced frustration, when your priorities don’t align with someone
else’s in another department? (Can you remember telling a colleague that
whatever you needed was really important? Or telling
another colleague that you were doing something that has a higher priority? We
have all been on both sides of the equation.)
Often you find that silos are not aligned because of the company-centric or channel-centric nature of many
organisations and the lack of alignment to the impacts on the customer
And in some
cases, the way they are measured and the KPIs of different silos
actually conflict with each other. And remember that operational units
will tend to deliver against what gets measured and their KPI targets, since
their bonuses, especially management bonuses, are contingent on the achievement
of KPIs. In order to deliver a great customer experience you need to change
what is measured and align it to the customer and not the organisation.
In 2012, Beyond
Philosophy did some research amongst customer experience professionals
and executives, which showed that “silo mentality” is the biggest organisational hurdle to improving the customer experience.
This is understandable as the end-to-end Customer Experience touches many parts
of the organisation and, as Tom Peters once said, “any organisation over five people
is too big”. You must have also heard of Jeff Bezos’ two pizza team rule i.e.
that each team should be small enough to be fed by two pizzas.
companies, rather than being a seamless entity and speaking to the
customer in one voice, frequently present mixed messages. Each silo has its own
view of the customer and the landscape they exist in, each from its own
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
Types of silos
Within a business, silos come in many
shapes and colours – functional, channel and even hierarchical silos. And the
impact these silos have on the way we deal with customers is huge. Silos
illustrate a type of real inside out thinking, something that exists today in
silos – functionally based
· Where customer support isn’t connected to marketing
- a big advertising 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 and 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.
· Disjointed Companies - not acting as one entity
either nationally or globally - e.g. credit card company and bank – same company
but actually not. Sony is one company globally but they won’t guarantee a
camera bought in one country and claimed against in another country (where they
sell the exact same camera) unless you took out an international warranty when
it was purchased.
· Customers having to explain themselves over and
over again about the same issue to different people within the same
– touch point based
channels and touch points emerge, old ones don’t disappear. Technology has and
will continue to create more channels that affect the customer.
Yet the majority of businesses have a separate approach
to managing retail, telephone, web, social media, email and mobile channels,
and they still expect customers to be able to hop between these channels in one
Today, more than ever,
organisations are engaging with their customers across an increasing
proliferation of channels and are finding it is their customers who are now
dictating the communication channels. So it is becoming more imperative than
ever for organisations to ditch their old “silo mentalities”. This means that
they need to prioritise their energies on engaging their people to deliver
great and consistent customer experiences across those 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
recent research by Foviance in the UK, more than a third (35%) of companies say
that customer touch points are managed in silos and that delivery is
proportion (38%) say that the customer journey is understood but is not managed
well across touch points.
share a great deal about themselves through their multichannel
interactions. However, if it is all held in silos, companies can't get a
complete view on their customers & their history and therefore act on all
this customer information without an overarching strategy in place and the
tools needed to gather, distribute, and analyse this data to allow them to
design a better customer experience.
recent research conducted by eConsultancy with over 650 companies, most
organisations are trying to integrate systems, but the majority still have a
long way to go. In fact only about a quarter (26%) of companies have a
well-developed strategy in place for improving customer experience.
70% are a long way from having integrated channels and a complete customer
picture, yet alone speaking to them in one voice.
So what are
the barriers to improving multichannel customer experience?
respondents state that organisational structure is a significant barrier – in
other words operational silos
respondents state that one of the three biggest problems is the complexity
of customer experience, given the growing number of touch points (mobile,
phone, retail outlets, email, etc).
the difficulty of unifying different sources of customer data, which ties in
with the previous two points about structure and complexity.
recent research shows that the same customer will “like” a company on Facebook
while complaining about them on Twitter, therefore highlighting the need to have
an integrated channel strategy.
silos – Organisational level based
also occur among organizational levels when team members are either inhibited
or actively discouraged from engaging senior leaders without going through the
correct protocols and channels. Far too often, junior level employees feel it's
better to play it safe than risk calling unwanted attention to themselves, and
senior leaders may feel inhibited from engaging front-line workers. It is often
found that communication patterns were extremely hierarchical: executives,
middle managers, and rank-and-file employees communicated extensively within
their own levels, but there were far fewer cross-pay-grade interactions in many
around this is having organisations with a flatter structure - those with fewer
levels of management. This type of structure encourages employees to take
initiative without needing approval from multiple managers. Instead of
“shifting the responsibility” up the management ladder, flat structures empower
employees to take charge, help make decisions and feel responsible for the
company’s success, creating a collaborative environment”.
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?
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 – a single board level executive
leading customer experience efforts across business units such as sales,
marketing and service, or even over an entire company.
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. To do this, you must bring people together so they begin to
understand the inter-dependencies between departments and the impact it has on
customers. It is by bringing the
outside in and sharing customer feedback throughout the entire
organisation that people begin to see the effect their behaviour has played in
the customer’s perception of their organisation. But whatever you do, it must
not be a blame game, but something proactive and positive which brings people
together as one unit - not something that creates further divisions. You
need to frame the changes into something that creates positive action.
· Through freely sharing information across the
enterprise and delivering it into the hands of those people who impact on the
customer. This will discourage information hording and improve collaboration. If you frame the need to do this as a positive
opportunity, that by eliminating the barriers between divisions or management levels
you can create a better and stronger organisation, one which will serve the
customer better, then you will see more people actively getting involved to
make it happen.
I have a personal story involving Virgin Atlantic
which illustrates the above two points nicely. Back in the 1990s, my mother had
a car accident, and I had booked a flight out to New York via their call centre
for the next day, with a return date the following Saturday. When I
arrived at the airport, they told me how sorry they were to hear about my
situation and upgraded me. During my stay in New York, I had to change my
return fight twice -they were great about doing this and there was no need for
me to explain the situation again.
Unfortunately, my mother died and my husband had to
fly out to be with me at the funeral. He rang the call centre to book the
flight but wasn’t staying over a Saturday night, so the flight would have been
astronomically expensive. They said they would charge him the lower cost
if he supplied a death certificate when he got back to the UK.
When we arrived at check in for our flight home to
London three hours before our flight was due to leave, the check-in staff then
asked if we would like to leave on the earlier flight, so they walked us from
the check-in desk directly onto our plane and upgraded us.
At each of these stages in both countries, the
whole thing was seamless and all people involved knew of the circumstances behind
our trip, and treated us with the utmost empathy in what was an extremely
emotionally difficult time. Can you imagine the impact this has had on me
as a customer and how engaged I feel with the Virgin Atlantic brand, even
· By creating an atmosphere where collaboration,
teamwork, trust and open communication are encouraged. Developing
cross-functional teams is a great way to make this happen. By bringing together
people from all
relevant points of view, levels, divisions and locations, who are committed to changing the way their organisation operates and
hold set regular meetings. And encourage group members to network and
communicate outside of these meetings and, more importantly, filter messages
about the group’s activities to others in their own divisions or offices.
Ensure you include key players on it, because if
they are left out they can block change. Include skilled managers and
leaders who can drive the change process and ensure you have backing from top
management to give the decisions made by the group credibility and the remit to
take the appropriate actions.
LEGO is a great example of this in practice, where
customer service advisors are also members of new product design teams. It is
not often that someone from the contact centre is able to bring the voice of
the customer into this process.
· By getting people to see things from other
perspectives. This can be done by rotating personnel in various jobs
around the organisation. Invite managers from other areas of the organisation
to visit your team meetings, even making them members of the group, as you work
on mutually beneficial efforts.
At Tesco, senior management spend two weeks per
year working on the shop floor to see what actually goes on and build direct
relationships with customers and shop staff. And at Dyson, the first thing you
do when you start working there is to build a vacuum cleaner.
· 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. It is only by having
integrated channels that you get a complete customer picture and can
communicate with them in one voice.
John Lewis Partnership has shown how to create a
seamless customer experience across in-store and online channels,
using each to complement the other - omnichannel. They know that about 60% of their customers buy both
online and in shops so they adopted an approach to make it absolutely seamless
for customers to move from one to the other. John Lewis’s became channel
agnostic, so customers can research in one place and shop in the other; they
can buy in one place and pick up in the other. They also have a transactional
mobile site and mobile apps that enable customers to scan QR and barcodes of
products in-store and order via the mobile site if they’re out of stock.
This has helped John Lewis grow by over
9% against a background of the UK’s worst retail recession in living memory.
· 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.
Again at Lego, everyone is bonused on the NPS
scores the company receives from the CEO to the customer service associates.
And John Lewis ensures that
employee satisfaction and customer satisfaction are inextricably linked. Last
year all its 84,700 staff reaped an additional 17% bonus, worth nine weeks' pay
– from the CEO to the man who washes dishes in the café.
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
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