Most customers are on first-name terms with the Silo Effect: you know, when you call your insurance company to discuss your home insurance policy and find if you also want to take a car insurance policy you must provide all your personal details again to another department before you can even get down to giving them your business. It’s kind of annoying.
Even more annoying is when you realise after a year, you’re not getting the customer discount the company advertises from bundling your insurance products because department A wasn’t talking with department B and you didn’t realise you had to inform the company yourself that you were already a customer.
And in fact, you only realised that when the customer retention team – let’s call it department C — gave you a call to find out if you wanted to renew your car insurance policy. Oddly enough, you didn’t.
Marketing: where silos go to thrive
If your marketing team is segmented by historical structure, product, channel or function – and let’s face it, just about all marketing departments of any size are divided up in some way — it’s organised in silos.
Organisational silos exist to develop competency in a particular skill set. In marketing these skill sets have sprung up around brand, digital marketing, market research and internal communications, just to name a few. There may be a social media team, a public relations division and an SEO unit.
Customer acquisition may operate separately from customer retention.
IT and sales are usually separated from marketing.
But brands that want to present a united face to the customer and get the most bang for their marketing buck must find ways to break down or manage these silos, not only within marketing but also between departments throughout the organisation.
Risks of the silo effect
Operating in silos risks giving the consumer a disjointed experience, and that creates confusion, which creates doubt.
Alternatively, as in the example detailed above, it wastes their time, costs them money, or just annoys the hell out of them.
Internally, silos frustrate employees and impede the launch of new initiatives and campaigns, causing companies to move too slowly.
Successful strategies developed in one department may not be scaled quickly, or even rolled out to other departments at all.
Different teams may find themselves battling over their share of the marketing budget rather than focusing on common business goals.
When it comes to marketing working together with IT, disagreements over the freedom and control of technology and data also prevent effective collaboration.
But there are many ways companies can reduce the silos that are impeding marketing performance. Establishing frameworks that promote collaboration is the key.
1. Establish common objectives
Adopting objectives that are common across departments is one strategy for overcoming silos between, say, IT and marketing.
One example of a company that did this is data communications and telecommunications equipment provider Motorola Solutions. The firm, which focuses on enterprise and government business, developed a brand purpose that became a motivating force across marketing, IT and technology: “We innovate to mobilise and connect people in the moments that matter.”
2. Use collaborative technology
Motorola is also using technology to foster greater collaboration between employees, vice-president and chief information officer Greg Meyers told a US Business Marketing Association conference in Chicago recently.
“Teamwork is more important than individual work so we are investing in systems that allow teams to collaborate,” said Meyers.
“We’re taking all our tools – even as simple as email – and throwing them all out and starting from scratch.”
Integrated marketing management platforms that allow people to communicate corporate objectives to teams across all projects help ensure those projects are aligned with those goals, regardless of the division in which they operate.
They make campaign development more transparent and, by enabling teams and agencies to see direct feedback on the platform, reduce the confusion that can occur when one team hands a project off to another in a different silo.
Encouraging the use of social platforms for business can also facilitate the conversations that help to erode the barriers between teams and divisions.
3. Empower marketing operations
Marketing operations may be the only function that operates across all intra-departmental silos and even liaises with IT and compliance, reporting to the chief marketing officer.
When marketing operations is a senior role, they have the authority to require teams to use common, transparent processes and systems that facilitate collaboration and alignment with corporate objectives.
If silos are allowed to take hold in an unmanaged fashion, they create a culture of not knowing and not caring.
Because their role involves putting in place systems and processes that enable marketing performance to be assessed and improved, the marketing operations function helps promote a results baseline across silos that can then be assessed.
4. Reorganise to erode traditional silos
Some companies have restructured to ensure all marketing-related functions report to a single chief marketing officer.
Others are amalgamating marketing with business units in a bid to remove silos.
Woolworths Australia has at times blamed silos for the supermarket chain’s poor performance and flagged the amalgamation of marketing, customer loyalty, data analytics and merchandising with Woolworths business units. “The silos have led us to where we’ve got to, and we can and we will break those down,” managing director Brad Banducci said.
Marketing software firm Hubspot reorganised its marketing department, for example, to integrate marketing with customer service and sales.
Methodologies such as account-based marketing also require departments such as marketing, sales and customer success to work closely together, bringing together all their information about particular key accounts, and in the process developing a more well-rounded, informed, effective marketing plan.
Putting the teams you really need to work closely together next to each other physically is a great idea where possible, as is providing break-out areas common to both.
Many a watercooler conversation has helped anticipate an obstacle or solve a problem that may not have been identified before.
Holding regular get-togethers is also advisable and can become a great cross-department brainstorming session, or just a culture-building exercise, which also helps promote greater understanding between teams.
5. Deploy cross-functional teams, agile methodology or hackathons
Cross-functional teams, such as those deployed in agile methodologies, not only require all the required staff from different departments to work together to complete key projects, but to mix.
This creates gaining a greater understanding among team members of each other’s job and promotes better collaboration in the future.
According to one study, as much as 75 per cent of cross-functional teams are dysfunctional, and silos perpetuate themselves within these teams.
It works best, according to Harvard Business Review, when the executive teams responsible for those projects are also cross-functional, perpetuating that collaborative attitude within staff below them.
Gillian Tett, in her book, The Silo Effect, points to the all-night hackathons and rotations favoured by Silicon Valley companies such as Facebook as silo-busters that work by forcing people from different parts of the company to work together.
6. Use data as a unifying force
Data can also be used as a weapon with which to unify teams and point all departments towards a common way forward.
For example, common dashboards that focus an organisation on key data points, according to pre-agreed priorities, can help establish a “single source of truth”.
The benefits of achieving this, even for simple pieces of information, are much greater productivity and potential for innovation, according to Sebastian Jezierski, Simple’s Head of Analytics.
“This is because people sharing ‘the truth’ are forced to focus on what it means and what they should do about it, rather than who has the right or wrong information,” he says.
“The latter argument is what most people are comfortable with (and try to default to) because the former is usually really hard and has unknown (and therefore intimidating) implications.
“The data may tell us we are no longer relevant, or are too expensive, or people hate our customer service but there’s nothing we can do about it because we have no budget and customer service is ‘another’ part of the business that we have no influence over.
“If silos are allowed to take hold in an unmanaged fashion, they create a culture of not knowing and not caring which can only lead to poor or erratic performance and excessive cost.”
Regardless of how it’s achieved, marketers that can collaborate effectively – and work more smoothly with other departments — will create a more agile company that can identify, seize and execute on new opportunities within days instead of months, execute efficiently, and minimise the silo effect and its stifling impact on marketing.