Silo thinking is the big obstacle to digital transformation and corporate success. Drivers for a world with fewer barriers can be technical solutions, reorganization and cultural change, because only with a trusting collaboration culture can the challenges of a crisis-ridden and uncertain future be overcome.
Silos are bad for business, but they also help in uncertain times
When consultants discuss transformation, they often bemoan silo thinking and its negative consequences: At one pharmaceutical giant, for example, hundreds of millions of euros are at risk of being sunk because each division is planning IT renewal independently of others. At another, branding and digital strategies are developed in parallel without coordination, both globally and in each market. This means that duplication of effort, waste of resources and a suboptimal result are inevitable. In medium-sized companies, many digital transformation projects get stuck in the marketing department or IT because the other department or sales/field service or someone else is blocking them. In small companies, silo thinking on the part of individual managers not only hinders further digital development, but also customer acquisition or business field development. It jeopardizes growth and sometimes even the very existence of a company.
A look at companies, literature or the web reveals countless other examples of departmental egoism, closed departmental boundaries and compartmentalization with negative effects. Therefore, the call is sounding ever stronger
"away with the business-damaging silos"
But it is not so easy to eliminate them. Silos exist because division of labor, specialization and expertise require structures. These structures made growth and prosperity possible in the last century, and they continue to give companies and employees security today. Self-contained organizational units are better suited to deal with volatility, ambiguity and uncertainty.
Following the probably best known term from the sociological system theory of N. Luhmann, it can be postulated:
"Silo thinking helps to reduce complexity."
Therefore, even with organizational structures that are actually open, flexible, and innovative, new silos continue to develop.
Break down silos in the right places and with appropriate means
If you want to combat silo thinking, it is therefore not a matter of tearing down the protective shells altogether, but rather of first determining where the walls are particularly thick and for what reasons, and at what points it is worth breaking open the silos, cutting in holes, windows and doors with a flex, so that collaboration and communication can take place across departments, divisions and even companies.
Appeals such as creating synergies, improving collaboration and communication culture tend to be of little help. The hyped agile teams or Scrum are often not effective either. Instead, it is important to identify the causes and then decide on different approaches with a view to the prospects of success.
Technical solutions: better networking
These can be drivers for a world with fewer barriers as well as supporters of the process. Systems talk to each other better than ever. Data silos can be minimized. Cloud communications are seen as a key technology for networking and collaboration. Teams, Salesforce, Veeva, and many other communications platforms promise to integrate seamlessly with business systems, even if they still sometimes struggle with each other.
Reorganization: more collaboration
A radical reorganization with freedom from hierarchy and constantly changing roles promises to prevent silo thinking. Some smaller companies in the creative service provider sector are trying this out, most start-ups are beginning this way and are also having success with it; often so large that after a certain size they then need not only generalists but also expert teams again, which then sometimes quickly entrench themselves behind silo walls again.
In large, traditional companies, cross-departmental teams for special projects can teach us how to become faster and more effective through collaboration. If these teams do not isolate themselves as elite teams (but unfortunately this also happens again and again) they can become role models for the further gradual opening of silos.
Culture change: more communication, less competition
Often silo thinking results from a poorly thought-out target system in the company. If departmental goals dominate that harm others or the company as a whole, if rewards are given on the basis of such individual goals, or if areas are favored at the expense of others, then opening up hardly works. The struggle for resources and budgets and for the attention of top management leads to communication and knowledge exchange among each other being cut off and customers being forgotten. Strengthening identification with the company through clear purpose and incentivizing overall company goals instead of individual or departmental goals, rewarding collaboration, networking and recognizing better cooperation and a sense of community can help here.
Successful collaboration requires trust among each other. Often, collaboration projects fail because other teams are not trusted or too little is known about them. Mutual honest communication about strengths and weaknesses and transparency helps a trusting collaboration.
Marketing as driver and pioneer
Silo thinking hinders innovation and digital product development and stands in the way of customer-centric processes as well as business development. This is where marketing can distinguish itself as a driver for overcoming departmental boundaries, breaking down silos and improving cooperation.
Marketing and Business Development
If marketing, sales and business development, as well as the strategy department, always consistently keep the overall business goals in mind and share market and business intelligence data, this can have a very significant positive impact on the company's success.
Marketing and Sales
When it comes to marketing & sales alignment, clear role definitions and absolute transparency help.
Marketing and IT
In (digital) innovation projects, intensive cooperation between IT and marketing is particularly necessary. Ideally, a fruitful network develops for this purpose with external organizations from science and service providers who share their knowledge.
Marketing and all areas
CX/ PX projects (i.e., consistent patient or customer focus) and brand identity projects require commitment from all employees and collaboration across all departments. The key is to get all employees and managers to put themselves in the shoes of physicians and patients and to ensure that people and their needs are always at the center of all decisions, from drug development to market launch, from administration to service. Marketing can/should be the driver for this, to set the necessary impulses and involve all departments with an internal campaign.
Collaboration, guarantor of success
For the positive further development of each individual company, but also of our economy, breaking out of silos and more collaboration, even across company boundaries, is extremely important, even necessary for individual organizations to survive. "Brand eins" writes: "In order to master major challenges, from the climate crisis to the transformation from industrial to knowledge work, isolation - in the sense of compartmentalization and not wanting to know - is a very bad idea. Much smarter is to exchange, to combine interests, to use experiences, as far as that is possible."
You can start with individual projects, hang it on digital transformation, or organizational transformation, but in any case, there needs to be a change in culture or values: collaboration and a sense of community need to be much more recognized by both companies and society.
We, the brandguards of Wächter & Wächter Worldwide Partners help clients break down silos in change management, culture change and digital transformation projects.
This article appeared in slightly abridged form in Healthcare Marketing 9/2020, in the section where GWA agencies write on the topic of "thinking beyond the day."