There has been a lot written recently about the need for retailers to create a seamless customer experience. Customers are increasingly demanding, and expect consistently high-quality interactions whether they’re shopping in-store, online, or over the phone.
While some retailers
have mastered this multichannel approach, others have struggled. Often organisations are not ‘connected’
enough on the inside to connect effectively to customers on the outside. They have an inward-looking ‘silo’ mentality
where information and resources are not shared across departments. Although
many organisations invest significantly in integrating systems and processes,
these simply won’t work effectively unless people across the business are integrated
and invested in, too.
A recent survey, CEOViewpoint 2016: The Journey to Profitable Omni-Channel Commerce, found that
only 18% of CEOs say they have eliminated operational silos and are delivering
seamless multichannel shopping experiences for their customers. The survey
concludes that silos have a negative impact on profitability and limit the ability
to create a seamless shopping experience for customers. CEOs of organisations which have eliminated
silos expressed greater confidence in revenue growth (59% compared with 48%
average for all CEOs) and profit growth (63% against 43% for those still
siloed).
Talking about this
issue with colleagues, we agreed that breaking down internal silos is one of
the single most common issues raised by clients across different sectors and
geographies. (Becoming more customer-centred is also a goal for pretty much
every business we talk to.) Nobody has ever asked us to help them reinforce the
divisions between different departments. There is a widespread belief that
silos are most definitely not a good thing whereas flatter structures and
increased collaboration most definitely are. So why does this problem persist,
and what can we do to tackle it?
Most people have a
natural desire to be part of a community. This can, however, translate into
tribal loyalties and behaviour, with an ‘us and them’ mentality present in
functions or business units that have a stronger identification with their own
unit than with the wider organisation.
The leader’s role is to tackle this by drawing these local ‘tribes’ into
the wider community of the organisation by creating sufficient momentum behind a
shared direction, purpose and values – and a shared focus on customers.
A common complaint I
hear from leaders of silos is that they and their teams are always tied up in
day-to-day activities. They are too busy to find time to step back and consider
how different business units can collaborate more effectively in order to meet
customer needs. Involvement in cross-functional working is often considered a
‘luxury’ activity. Overcoming resistance,
however, from organisational silos is one of the main barriers to
customer-focused collaboration. Abolishing silos requires determined commitment
from senior leaders and a unifying sense of purpose to push through
resistance.
Activities I have seen
work well include inter-team events to develop closer alignment of process,
improved understanding of each other’s priorities and constraints and increased
levels of feedback to improve inter-working.
Regular and ongoing inter-team discussions, sometimes including the
whole team and sometimes with representatives, can help to maintain and
accelerate progress. Online forums to
share and solve issues can make the dialogue very visible to all the people
involved.
When teams are empowered to operate and
cooperate with other teams across processes and break through bureaucratic
silos, improved customer focus and pronounced performance improvements are
common. Built on the foundations of quality dialogue and mutual influence, with
senior role models leading the way, teams can produce new answers to old
problems and innovative ways to serve the customer even better by adapting
quickly to changing circumstances.
By building better
connections between teams in, for example, production, distribution, digital, merchandising
and customer service, you can see reduced cycle times, less waste, improved product
availability and, of course, more satisfied customers.
You can read more about
addressing the issue of organisational silos in my book, Connected Leadership: How to develop more agile, customer-drivenorganisations. I’d also be interested to hear about your experiences.
Please email me or tweet @CirrusConnect.