Despite the emergence of new devices and software products designed to unite employees in more ways than ever before, the threat of organizational silos is still very real. While silos deter customer experiences and producing correctly functioning products – the root of the problem is that many managers fail to spot those silos as they formulate in front of their very eyes.
What are Silos? Organization silos describe the isolation that occurs when employees or entire departments within an organization do not want to or do not have adequate means to share information or knowledge with each other. Siloed teams often end up working in isolation from the rest of the company. This leads to a plethora of internal and external problems for employees, executives, partners, and customers.
In Organizational Design, it is critical to also consider the risks of unintended silos within the organization. Having organizational silos can lead to duplicate work, inefficiency, bugs and generalized employee disenfranchisement at a granular level. Work is being done without regard to how the work impacts other departments. Departments start having tunnel vision, solely focused on their own functional area. In the end, there is a breakdown in communication and transparency leading to organizational dysfunction on multiple levels. This can greatly affect the company’s ability to deliver excellent Customer Experience.
Breaking Down Organizational Silos: The 5 Key Symptoms
Understanding the 5 Key Symptoms of Organizational Silos will guide companies in breaking down silos and limiting their effect on performance, goals, and targets.
- Broken Customer Experiences. This is the most obvious sign of a siloed team. Eventually, this symptom will ultimately make the company undesirable.
- Internal Unfamiliarity. There is internal unfamiliarity when employees or colleagues are not on a first name basis. Employees are not familiar with the majority of the people outside the team and what they do.
- The Us vs. Them Mentalities. When your department sees other departments as competitors and obstacles to success, then there exists the us vs. them mentality. In the us vs. them mentality, protectionist thinking exists. When this happens, information is not shared for fear that another team’s gain will be their loss. This leads to the creation of cliques with its own distinct culture that is not aligned with the company’s overall mission and culture.
- Disenfranchised Employees. Having employees who feel that they are not part of the team is a symptom of organizational silos. Disenfranchised employees are unhappy, unproductive, and pose the risk of sharing negativity with coworkers.
- Task Duplication. Have you seen people of different teams working on similar assignments and projects? That is a symptom that there are organizational silos within your company. When there is task duplication, this can lead to inefficiencies and loss of productivity.
Companies can immediately break down barriers to communication and collaboration once the key symptoms are detected. Silos in business have two sides to the coin. The good side is variety, ownership, accountability, specialization, and efficiency. However, on the other side, the bad side means short-sightedness, inaccessibility, and inefficiency. This can harm your organization.
Organizations must be able to deal with silos inside a business. This can be done by expanding our perspectives and motivation in the work we do.
Interested in gaining more understanding of Organizational Silos, the different types, and proper ways of addressing them? You can learn more and download an editable PowerPoint of Organizational Silos here on the Flevy documents marketplace.
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Transforming a product-driven firm to a customer-driven enterprise is inevitable in order to stay ahead in today’s extremely competitive markets. The days of mass marketing, mass media communications, and little-to-none direct interface with customers are long gone. The emphasis, now, should be on maximizing customer relationships and becoming customer-driven organizations rather than merely selling products. The technological advancements of this age offer potent tools for organizations to utilize in order to engage with the customers directly; gather and mine information; and tailor their products and services appropriately.
Leading organizations are making huge investments in data analytics and transforming their strategies to focus on the customers’ evolving needs. They are striving hard to improve their customer retention and deepen their relationships utilizing rich customer insights, tailoring products according to the personalized needs of the customers, and presenting the offerings in a variety of store formats.
The Customer Department
To become customer-centric organizations, companies need to transform their traditional marketing function into a new unit called the “Customer Department.” The Customer Department should be created to deliver maximum profits to the customers and nurturing customer relationships instead of pushing products.
This necessitates transforming the organizational structure, culture, strategy, and reward programs in line with the shift in focus from managing transactions to cultivating customer relationships. Specifically, there is a need to add the position of Chief Customer Officer (CCO)—under the CEO—and various Customer Managers underneath the CCO. The roles and responsibilities of these positions should be:
Chief Customer Officer (CCO)
The most prominent shift in a customer-centric organization is replacing the traditional Chief Marketing Officer (CMO) role with the Chief Customer Officer (CCO) role. Reporting to the CEO, the CCO is primarily responsible for devising and executing the customer relationship strategy, directing all the client-facing roles, and fostering a customer-driven culture in the organization. The main tasks of the CCO position include ensuring smooth flow of customer information, increasing productivity utilizing various metrics, and regularly interacting with the customers to understand their concerns.
In a customer-centric organization, the Customer Managers (CMs) are in charge of various customer segments. They are accountable for enhancing the value of a customer relationship by ascertaining customers’ product needs. To make this role effective, there is a need to realign resources—people, budgets, authority—from product managers to the CMs.
The main tasks of the CM position include defining customer needs, extracting and interpreting customer insights utilizing various sources—e.g., mining customer forums, blogs, and online purchasing data—, and striving to improve the lives of the customers.
Additional Responsibilities of the Customer Department
Customer-centric organizations make the Customer Department accountable for some of the critical customer-facing functions which were once considered an integral part of the Marketing Department. These functions include:
- Customer Relationship Management (CRM)
- Market Research
- Research & Development (R&D)
- Customer Service
Customer Relationship Management (CRM)
Traditionally, the CRM function belongs to the Information Technology Department owing to the technicalities involved in managing the CRM systems. The function demands evaluating the customer requirements and behaviors—which is a core function of the Customer Department alongside gathering and analyzing data necessary to execute a customer-development strategy.
In customer-centric organizations, the Market Research function goes all the way from the marketing unit to other units that deal with customers—e.g., Finance for payments, Distribution for delivery. These organizations take a more granular view of customers’ behaviors, and gather and incorporate clients’ feedback to further improve customer lifetime value and equity.
Research & Development (R&D)
The R&D function should also report to the Customer Department, as, nowadays, the traditional R&D-driven new product development models are conceding to creative collaboration between the client (users) and producers. It’s not a good idea anymore to pack tons of features into a product and cause feature fatigue to customers. What’s more appropriate is to seek and incorporate customers’ input into product features by involving them into the product design process.
Customer Service (CS)
CS is another function that should be handled by the Customer Department to guarantee quality of service and to nurture long-term relationships. This important function isn’t worth outsourcing overseas as this often causes negative impact to the clients and organizations alike, due to poor customer service.
Interested in learning more about Customer Metrics, Customer Department, and Customer-centric Organizations? You can download an editable PowerPoint on Customer-centric Organizations: The Customer Department here on the Flevy documents marketplace.
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Stiff market competition, expansion into new territories, product portfolio extension, and gaining new capabilities are the prime reasons why more and more organizations are seriously looking into the prospects of—and carrying out—Mergers and Acquisitions. However, only a few M&As achieve their desired revenue objectives.
Revenue Synergies are a decisive factor in closing such deals. However, identifying precisely where these Revenue Synergies lie and then capturing them isn’t as easy as it sounds.
A McKinsey study comprising of 200 M&A executives from 10 different sectors revealed that all the respective organizations of the respondents remained short of achieving their Revenue Synergy targets (~23% short of the target on average). Securing Revenue Synergies is a long-term game. The companies that succeed in securing Revenue Synergies achieve the target in or around 5 years.
Leaders aspiring to achieve Revenue Synergies should first clarify the objectives from and the schedule of the revenue synergies, lay out the organizational priorities and go-to-market strategies, remove obstacles from realizing value, and gain across the board readiness and commitment for the initiative. Organizations that are most successful in securing revenue synergies pay close attention to these 7 guiding principles during the Post-merger Integration process:
- Source of Synergies
- Leadership Ownership
- Customer Insight-driven Opportunities
- Salesperson Driven Strategy
- Ambitious Targets and Incentives
- Sufficient Support
- Performance Management
These 7 guiding principles to capturing Revenue Synergies are critical for effective integration of two firms after a merger and unlocking potential benefits from the deal. Let’s discuss the first 3 principles in detail now.
1. Source of Synergies
The inability of the leadership of the acquiring company to spot major sources of revenue that integration brings in results in losing significant pools of opportunity and failure of M&As. Realizing Revenue Synergies demands a thorough methodology to ascertain and qualify revenue prospects along markets and channels, Go-to-Market Strategies, and developing commercial capabilities. This entails:
- Evaluating customers and markets, selling offerings of the combined firms utilizing existing and additional channels, and adequately training and rewarding the sales teams.
- Coming up with innovative new products and bundles utilizing combined R&D capabilities.
- Sharing best practices and commercial capabilities that mergers offer.
2. Leadership Ownership
Organizations that accomplish their Revenue Synergy objectives guarantee that their top management and employees commit themselves fully to the initiative from the onset. They identify potential value pockets from the integration, examine the assumptions about securing value, and get them endorsed by the senior management and front-line staff. The potential Revenue Strategies are regularly evaluated by inter-departmental experts.
3. Customer Insight-driven Opportunities
Accurate estimation of Revenue Synergies demands top-level estimates—assumptions on market share gain, revenue enhancement, or improved penetration—alongside comprehensive bottom-up customer insights, and evaluation of customer relationships. Other important elements to consider include analyzing the offerings being offered to customers, discerning other potential products and services required by the customers, and assessing the ability of the sales team and brands in terms of the potential they offer to the clients.
Interested in learning more about the other guiding principles of securing PMI revenue synergies? You can download an editable PowerPoint on Post-merger Integration (PMI): Securing Revenue Synergies here on the Flevy documents marketplace.
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LearnPPT has finally released a new business document. It’s called the Complete Consulting Frameworks Toolkit and that name is not an understatement. The document is currently only available for download on Flevy.
This is a VERY comprehensive document with over 300+ slides–covering 50 common business frameworks and methodologies (listed below in alphabetical order). A detailed summary is provided for each framework. The included frameworks span across Corporate Strategy, Sales, Marketing, Operations, Organization, Change Management, and Finance.
Here is the full list of included frameworks and methodologies:
- ABC Analysis
- Adoption Cycle
- Ansoff Market Strategies
- Balanced Scorecard
- BCG Growth-Share Matrix
- Blue Ocean Strategy
- Break-even Analysis
- Business Unit Profitability
- Economics of Scale
- Environmental Analysis
- Experience Curve
- Cluster Analysis
- Company & Competitor Analysis
- Core Competence Analysis
- Cost Structure Analysis
- Customer Experience
- Customer Satisfaction Analysis
- Customer Value Proposition
- Fiaccabrino Selection Process
- Financial Ratios Analysis
- Gap Analysis
- Industry Attractiveness & Business Strength Assessment
- Key Purchase Criteria
- Key Success Factors (KSF)
- Market Sizing & Share
- McKinsey 7-S
- Net Present Value
- PEST Analysis
- Porter Competition Strategies
- Porter’s Five Forces
- Portfolio Strategies
- Price Elasticity
- Product Life Cycle
- Product Substitution
- Relative Cost Positioning
- Rogers’ Five Factors
- Scenario Techniques
- Scoring Models
- Segment Attractiveness
- Segmentation & Targeting
- Six Thinking Hats
- Stakeholder Analysis
- Strengths & Weaknesses Analysis
- Structure-Conduct-Performance (SCP)
- SWOT Analysis
- SWOT Strategies
- Treacy / Wiersema Market Positioning
- Value Chain Analysis
- Venkat Matrix
These frameworks and templates are the same used by top tier consulting firms. With this comprehensive document in your back pocket, you can find a way to address just about any problem that can arise in your organization.
For other, more in-depth business methodology framework and methodology documents, take a look here: