How to Fight the Silo Effect with Omnichannel Approach?
Head of Content
⏱ Reading Time: 10 minutes
Whenever the word ‘silo’ is mentioned, the first thing that might come to your mind is the silos used for storing grains in farms after harvest. So you ask yourself, how could silo be a bad thing?
Farm silos are designed to keep large amounts of grains stored and separated. But, when we talk about silos in business, we refer to departments, service units, business units, operating units with discrete or disconnected processes, data and technologies in the same organization. Each of these departments or silos are kept separate from each other and are focused on their own departmental goals ignoring that of the others or the organization collectively.
Silos are not necessarily bad as they can be used to create expertise in different business areas. Silos can promote individuality or independence, accountability, and absolute responsibility. They are best used for delivering specific businesses in a larger enterprise. However, with the emergence of omnichannel customers, silos are no longer helping businesses rather they are hurting them.
What’s a Silo Effect?
A silo effect happens when departments or teams within a company work without exchanging information with one another.
So for example, if a silos effect happens within a company, 2 departments can work on the same project or initiative, without knowing what the other one is doing and that they’re working on the same thing.
This can happen for various reasons. Geographical distance, lack of quality leadership, security issues, etc. can be some of the reasons why a department silo develops. In a way this is good because it’s necessary that a company has different deparmtents dealing with different speheres of business, but the lack of communication can also be fatal. It decreases productivity, productability and the interpersonal relationships among emoployees.
So, how to find the right balance?
How Silos Affect Company?
The effect of siloed structures in modern businesses has disadvantages that far outweigh the advantages. Before the rise of multi-channel, digitally-driven customers, businesses could run silos even though there were still problems with it. But with the current breed of customers coming in from different channels of the same organization with the expectancy to enjoy a continued line of communication or service with the same customer experience, highlights the need to tear down the silo walls.
According to the result of a survey conducted by the American Management Association, 83% of company executives still have silos in existence in their companies while 97% say it has a negative effect on the company.
Since every member of a particular department thinks only of the best ways to build their department, silo inhibits the clarity of vision across an enterprise. It breeds scenarios where employees of the same organization are less likely to collaborate, work together or share information as one team to deliver company goals.
Looking into a company’s business processes, you’ll discover that silos increase the number of inefficiencies in a company. With Silo departments, you risk duplicating works, absolute lack of communication and time waste. Due to lack of communication, the company doesn’t work as one and that will cost more money and delays in operations.
For example, if there’s no synergy between the accounts department and the operations department, there’s bound to be bad data and wrong financial statements with each party pointing fingers at the other.
Silos do not have its effect only on large enterprises or companies. Small businesses are not left out. A siloed approach in your small business can also make a negative effect, especially in marketing.
For example, you give a speech about a particular topic or branch of business but you fail to mention your own services, you participate in a networking meeting without following up, you post an advertisement in a local newspaper with your local address without mentioning your website. It fosters a lack of integration and coordination of all your marketing techniques in a way that they can support each other.
How Silos Affect Customers?
Bringing customers into the equation, the silo structure in businesses often works against the customers’ interests while projecting the wrong behaviors. A manager in a particular silo will become frustrated trying to solve a customer complaint that is connected to another silo because his priorities do not align with that of someone else in another silo.
Picture 1. The silo structure
Another example will be that of customers coming in from another channel being asked to repeat processes or re-enter information because they switched channels. This could’ve been a smoother customer experience if the company had a unified view of customer interactions. So you’ll discover that departments or channels are not aligned due to their siloed nature which is company-centric or channel-centric causing the organization not to be customer-centric.
With the silo effect, companies mistakenly present mixed messages rather than becoming a seamless entity speaking to their customers with one voice due to the fact that each silo has its own perspective of the customer.
Breaking down the Silo Walls Using an Omnichannel Approach
As the world advances in technology, so will business processes and each and every business segment – from logistics to marketing. But, the silo effect is most visible (to customers) in marketing and sales efforts in brands.
Customers interact with brands every day through different channels and devices including smartphones, computers, and tablets. Some do so over the company’s website, email, and phone calls while some still use face-to-face interactions. Sometimes customers might initiate interaction through one channel and complete it via another. How do you reconcile this without the customers feeling like they’re interacting with two different organizations when you have a siloed structure given that your online staff is different from the offline staff at the physical office or store?
Read our Guide: Omnichannel Strategy; What, Why and How.
From this example, you can see how important it is for organizations to build a unified process for customers to interact with the company enjoying the same or a continued customer experience regardless of the entry point or channel they choose to come from at any time. This cannot be achieved if you maintain a siloed structure in your organization hence, the need for an omnichannel approach.
The Meaning of Omnichannel
Before we try to understand how you can use the omnichannel approach to fight the silo effect in an organization, you need to understand the term omnichannel.
An omnichannel approach is a cross-channel strategy that can be used to improve a company’s customer experience. Instead of having departments work in a parallel manner with different communication channels and resources that never meet, they are designed to cooperate. Omnichannel means integration and orchestration of different channels in a way that the customer experience across all channels is more interesting and efficient than using only one isolated channel.
The goal of using an omnichannel structure is to create a better customer experience given that customers now value engaging with an organization through multiple channels or avenues at the same time.
How to Break down the Silos – 6 Steps
The larger an organization its, the harder it is to break down its silos. Therefore it is important to do this early before they start forming. As for smaller enterprises or startups, it’s much easier to break down the silos.
However, whether big or small, here are strategies we’ve outlined that will definitely help you break down the silo walls and foster a collaborative and cross-functional environment in your company.
Picture 2. Breaking down the silo structure
1. Make Everyone Understand the Common Vision and Goals
One of the first things you must do is to reprioritize your company goals, making sure that every individual from different departments is on board with them and understands how each of their departments supports these goals. This means that every employee in your company should understand how they contribute to the bigger picture as well as how each of their departments or teams contribute as well. With this mentality, members of each team will start to think of their departments as chains of the same organization instead of some separated silos with different goals.
One of the important ways to make this possible is to establish transparent communication. This is the solid foundation you need if you want a healthy company. When everyone is up-to-date with what is happening in the company, it’s easier for them not to hoard resources or information whether the act is intentional or not.
Just like in some places I’ve worked earlier, some managers feel that the best way to keep your company goals and vision on top of everyone’s mind is to conduct daily meetings where those goals are reiterated. Well, that’s not true. You don’t need to verbally engrave your company goals in their minds. Simply employ the use of a business reporting dashboard with everyone connected to it. Put your metrics and company goals on it for everyone to see. With business dashboards, you can display graphs, charts and other visuals that will aid quick glance from your employees at the company performances with respect to her goals.
You can also make use of human resource software to show your company structure narrating how everyone and every team fits into the puzzle or company goals highlighting the functional and cross-functional departments. This will make everyone feel the need to collaborate and share information.
Picture 3. Happy employees
2. Prioritize Customer Experience
One of the company goals that needs to become the silver lining of every department and employee is customer experience. As much as every company claims to be customer-centric in theory, executing this especially in a large company is not an easy task due to lack of effective collaboration among departments.
With the omnichannel approach, it is required that these walls built around each department is broken for effective collaboration to deliver excellent customer experience across all departments or channels.
To do this, start by talking to everyone in your company at all levels; from the most senior to the most junior level. Let them understand the reason behind every action they take and how it can hurt or make the company from the way they affect customers. When they understand the needs of each other with respect to that of the customer, the company will be repositioned on the internal path to success delivering excellent customer experience.
Discuss every new strategy with everyone, listen to their suggestions regardless of the department, and remind them that you’re all on the same page making them see where they fit in and how they can collaborate to deliver excellent customer goals.
3. Assign People to Act as Liaisons Across Departments
Another strategy you can use to break down the silo walls is working with liaisons. You can give them any name as a team, however, their work will be to encourage cooperation among departments. They will act as neutral mediators and facilitators without a personal stake or opinion on a project. Their only goal is to make sure that departments share information and communicate effectively. For smaller companies, a consultant might be hired to do this job although it can be costly. They could also facilitate monthly meetings where work progress with a focus on interdepartmental dependency is discussed.
The outcome of meetings like these will definitely build a closer working relationship encouraging effective collaboration and resource sharing among departments.
4. Make Accurate Inventory a Priority
If you sell products via online and offline channels, it will be a bad experience for your customers to take time to put in credit card details and order for goods that appear available only to receive an email 30 minutes later that the goods are not in stock.
If you’re taking the omnichannel approach, you must reconcile these two departments (offline and online) to become one entity using the same, accurate inventory. Customers should be able to have the same experience if they choose to order online and pick up the product at the physical store or have it delivered to them.
Update your inventory at every point in time and let there be a seamless transition between online and offline transaction activities.
5. Make Use of Customer Data
Building a successful business with an omnichannel approach is founded on the right understanding of your customers. This can only be achieved through the use of accurate data.
Employing the use of Customer Relationship Software (CRM) is another way to help your company determine who your customers really are and what they want. It is a database software designed to help you update and maintain accurate information about your customers and their prospects.
Compile every first-party data you have, use it to anticipate your customer’s needs. Do not make any assumptions, use your data and you might be surprised at what you have. Use it to properly understand your customers and how they interact with your brand.
6. Conduct Cross-Functional Training for Employees Across all Levels
Although having everyone specialized in some skill is a good way to bring out the best in your employees, sometimes you must have the master-of-all team members. To create excellent customer experiences, team members ought to know how their mates fit into the big picture lest they become individual silos.
Train your employees on other skills apart from theirs. Let them understand the whole process and see what their colleagues do, what resources or information they could need from them and also be aware of each program that runs in the processes. This will encourage easy collaboration and excellent customer experience.
The importance of breaking down silos and destroying the effects to build a better customer experience can never be overemphasized. Any company that has its channels siloed can be detected through inconsistencies in their customer service without having to look deep. You need to know that your audience does not evaluate your business based on your verticals, rather their experience with your company.
With lots of other competitors present, we’re sure you wouldn’t want to lose your customer to a competitor over a complicated process when they’re trying to buy from you.
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