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Why Organizational Silos Fail Our Customers—and How to Fix It

May 20, 2017

My most recent email and blog post (AMA Executive Circle) on “knocking down” organizational silos drew an immediate response which has pushed me to expand on how they begin, why they are harmful in today’s digital world, and how leaders can tear them down.

To begin, I was wrong when I implied silos only develop inadvertently from a lack of leadership attention (wishful thinking?).  Such can certainly be the case, but a lack of confidence or a pile of leadership insecurities can also unfavorably impact organizational silos.  If a business sector leader is defensive in the face of criticism, his or her area of responsibility can become unresponsive, even stubborn, to company and customer needs regardless of the strategy.  Or if segment leaders believe in themselves and their team to the exclusion of others, then potential for goal sharing and achieving organizational success will be significantly diminished if not destroyed.

Why Organizational Silos Are Wrong for Today

Today’s technologically aware customers have more and faster access to information for their decision making, leading to a need for horizontal and non-siloed organizations.  As outlined in a previous post, the number of potential customer “touchpoints” through the decision-making customer journey has exploded, thanks to our digital devices.

Organizational Silos Disconnect the Customer from the CompanyA recent presentation by Forrester’s James McQuivey dove into the importance of emotion in today’s experiential world.   He explained how our brain’s “risk central”―which has helped us to quickly avoid sometimes life threatening mistakes for our survival over the millennia―is now helping us to make faster decisions in today’s “hyperadoption” world.  Digital technology allows us to quickly gather decision related information from multiple sources, reducing the risks we are programmed to avoid.

In this new normal, organizational silos create more confusing and sometimes contrasting bits of information for the customer to digest.

This is important to progressive, non-siloed, transparent, and accountable-to-the-customer (customer-centric) organizations because the role of emotion to this decision-making process is enormous.  Our risk central allows for rapid decision making by leveraging our emotions to carry the message and response and cut through the data.  Emotions have become more critical to help us quickly decide what to focus on, engage with, and remember while managing the onslaught of available information from today’s tech world.

Our emotions play an essential role and are key to what we remember from each and every experience.  All of this makes the individual server, the attendant at the airline gate, and the representative on the other end of the phone important to delivering a consistent brand or cultural message that the customer can emotionally relate to (think Apple, LL Bean, Zappos … ).  And the technician committed to fixing your problems―the creator of your website or the HR leader responsible for hiring the motivated staff critical to a high level of engagement―are all equally critical to delivering an experience with each and every customer touchpoint are equally important.

Perhaps this has always been clear to me because my B2C marketing has been focused on restaurants.  We all know that our potential revisit to a restaurant depends on how we “feel” about our last experience.   In any business, it is the return visit or repurchase that delivers long-term profits.

Insights toward Tearing Down Organizational Silos

So, the smart, visionary Founder or CEO (and change has to start at the top) must understand why silos exist, why they are risky to maintain in today’s business world, and how to overcome existing organizational silos.Understanding Five Dysfunctions of a Team Can Overcome Organizations Silos

One of my favorite business books that has proven to be consistently and “across the board” useful is Patrick Lencioni’s The Five Dysfunctions of a Team.  While all five of the dysfunctions relate to the damage done by organizational silos, three in particular are worth focusing on when examining the presence of silos in your own organization, big or small:

  • Absence of trust―driven by a fear of being vulnerable with other leaders and the most fundamental dysfunction of them all.
  • Fear of conflict―created by a desire to preserve “harmony” at all costs, even when productive and conflicting discussion is what’s needed for progress.
  • Avoidance of accountability—desire to avoid interpersonal discomfort leads to not confronting and improving on core issues or holding each other accountable.

In each of these three dysfunctions, it is clear that fears can lead to protecting “territory,” retreating to sheltering silo, and not advancing the core needs of the company or organization at large.  After all, sometimes organizational silos are not inadvertent but are intentional.

Looking at a company’s organizational silos from a “five dysfunctions” point of view helps us see into why silos exist.  It also provides a pathway toward understanding why they are getting in the way of growth and a more productive team and insights into how to fix them.

In today’s technological world, customers want “straight line” and transparent relationships and experiences, and a company’s organizational silos only get in the way.

[An earlier version of this blog post first appeared in the AMA Executive Circle’s Blog on April 20, 2017]

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