Closed culture, operating solo, working in silos – however we refer to it there are always negative connotations in relation to the corporate world. It is a viewpoint that has been held for more than 25 years, ever since the then CEO of GE Jack Welch advocated a ‘boundaryless organisation’ for his company. The inspired idea created collaboration across the entire workforce, bringing people together from different levels, departments and geographies in preparation for the globalisation and technological innovation of the 21stcentury.
Fast forward to today and it is no longer a forward-thinking notion. So every company is now collaborating and sharing in this new all-for-one culture, right? Wrong. Welch’s concept may be seen as an ideal but the boundaries remain throughout many organisations. Companies still divided by siloed, hierarchical and fragmented processes and practices. As sales people, we all too aware of the silo mentality. Day to day, in our own organisations and our customers’, we see a reluctance to share information within different departments and divisions.
The key question here is whether silos are always a bad thing? We’re consistently told that working in silos decreases an organisation’s efficiency and damages corporate culture. A sentiment echoed in Patrick Lencioni’s renowned book Silos, Politics and Turf Wars; “Silos…devastate organisations. They waste resources, kill productivity, and jeopardise the achievement of goals.”
Despite the tidal wave of negativity, there are several scenarios that demonstrate the ‘highs’ of silos in sales organisations. For instance, when different business units operate independently under the same company umbrella it is not unusual for some to have higher margins than others. If a silo is operating successfully and bringing in the bucks, why change it for the sake of collaboration? This is common in sectors such as chemicals or medical sciences and those carrying commodity or speciality products. Companies obviously want to keep the silos to safeguard the higher margins on their most innovative products. This protects the customer relationships and also maintains a consistent selling approach.
In fact, this is precisely the reason why sales are probably more guilty of operating in silos than other departments within an organisation. Sales processes are fundamentally dictated by the customer and how they buy. Customers hold the power and if they prefer a one face approach then there is a view that silos are the only way. Quite simply, sales teams who are not distracted or sidetracked by other company issues have more time to dedicate to specific customers. They can develop a deeper level of knowledge about their clients and their specific industry. Information that is invaluable in today’s buyer-led market.
Of course, the ‘low’ side of the argument is all of that useful information stays within the silo. A siloed organisation can’t act quickly or take advantage of opportunities. When information isn’t freely shared, businesses will struggle to make informed, data-driven decisions. Indepth knowledge of customers can make or break the success of a company and if this intelligence is not being shared with marketing or R&D, for example, there will be a negative impact on the wider business. When the future of our industry is so focused on having an effective sales enablement strategy, this deep customer insight is critical to the whole organisation.
One area where silos play an extremely important role in the corporate world is in avoiding potential conflicts of interest. The so called Chinese Wall concept goes hand in hand with siloed working, to protect sensitive company information and prevent any damaging ‘leaks’. Many organisations represent and deal with competing clients. Siloing different teams to different brands is vital for non-disclosure purposes to prevent conflicts of interest.
There may be valid reasons for the existence of silos, however there is a fine line between focused teams and opaque operations. When silos are too closed, they become detrimental to company culture, communication and collaboration. It’s all a corporate balancing act. These teams should be focused on execution but their priorities have to be aligned to the rest of the organisation. Accountability rests with each unit and it is their responsibility to ensure they have the skills and resources to take an initiative through to the end. Those in the silo can look deeply into their own area, as long as the sales leaders are looking at the broader company objectives.
In Virginia Anderson and Lauren Johnson’s book, Systems Thinking Basics, they define how silos could fit into the bigger corporate picture. “It is recognising the interconnections between parts of a system and synthesising them into a unified view. This thinking, along with a unified focus, should be applied across teams to encourage collaboration, team work and ultimately accomplishment of the common goal.”
Organisations have to find the right balance between having execution teams and non-siloed decision making. Every employee should be aligned to the end goal and that will undoubtedly be based on meeting the needs of the customer. Ideally leadership teams would reaffirmthese common objectives frequently so they become part of the organisation’s culture. Having this unified vision will encourage trust, create empowerment and break teams out of the ‘my department’ mentality into the ‘our customers’ approach.
Many companies are combatting the silo challenge by creating holistic, cross-functional teams with representatives from different departments such as sales, marketing, operations and logistics. In today’s fast-changing global markets these cross-departmental teams could be aligned to specific vertical segments to speed up delivery and react quicker to opportunities.
Opinions on silos undeniably cover both ends of the spectrum, however what’s clear is that unified goals are vital to the success of a company. We will never dispute the wisdom of Jack Welch however the main aim here is not to destroy the silos completely but to eliminate any resistance to sharing information. The rollercoaster views may comprise of some highs and many lows but we need to focus on the road ahead. That is taking a balanced approach and never losing sight of the customer.