Organizational Silos: Impacting Both Employee and Customer Experiences


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Last week, I spoke at the Furniture Marketing Group Symposium in Las Vegas. I talked about building a winning organization and fixing the experience from the inside-out. My focus was on deliberately designing a customer-centric culture, getting leaders committed and aligned, and ensuring the employee experience is a top priority. Put people first – take care of employees so that they’ll take care of customers – and the numbers will come.

There were some great questions afterward. One of them was related to organizational silos, their impact on the experience (for both employees and customers), what you can do to break down/connect those silos, and my thoughts on the role of matrix organizations/structures in breaking down those silos.

A more-detailed version of my response to this line of questioning follows.

Organizational Silos

Organizational silos cause pain for your employees. They lead to reduced efficiencies, waste resources, kill productivity, reduce morale (with a them-and-us mentality), and are detrimental to your ability to create a customer-centric culture.

This means silos cause pain for your customers, too. And they wreak havoc on your customer experience strategy.

Silos kill innovation. They create nightmares for the customer experience. And say good-bye to the omnichannel experience! When departments and channels don’t talk and share customer data, the experience is fragmented and frustrating. You’ve experienced this: Think about having to re-enter your information when you go from website to phone or providing information when transferred from rep to rep. That frustrates customers to no end!

When a company is silo’d, these are just some of the things that happen in a vacuum:

  • Communications and messaging: no consistency or doesn’t happen
  • Actions: no consistency or don’t happen
  • People development: training, coaching, hiring, rewards and recognition, etc.: no common standards or consistency
  • Data access and usage: no data sharing
  • Information and knowledge: no sharing
  • Technology and tools: unique to each silo of the organization
  • Metrics: unique and inconsistent

There is no consistency or uniformity when there are silos; every department is using its own tools and processes to support what they are doing rather than working efficiently and consistently with the rest of the organization to be more cohesive, to be one company. And employees and customers feel it and know it.

How To Break/Connect Silos

What do companies need to do?

They need to get everyone in sync, on the same page, and working together toward a common goal.

Think about this: silo is more of a mentality than a physical thing. There are no walls in place to keep you from talking to your colleagues in another department and from sharing what you’re working on with others. Department or business unit heads choose to not share information or to collaborate. It’s a leadership issue. It’s a culture issue. It requires a shift in mentality!

How can you shift the mentality – and the behaviors? I answer that question in my post, Silos Are For Farmers, to which I’ll add a couple other options, including:

  • recognizing and rewarding collaboration and information or data sharing: always tie the reward to the desired outcome.
  • having employees shadow colleagues in other departments: provide a better understanding of what others do and how the departments work together or rely on information and data from each other.
  • hosting cross-functional brown bag lunches: create a better understanding of what others are doing and how the work in other departments connects to what you’re doing.

What About Matrix Organizations?

The question of the role of matrix organizations or structures in breaking down or connecting silos is an interesting one. According to Wikipedia, matrix organizations are defined as:

… an organizational structure in which some individuals report to more than one supervisor or leader-relationships described as solid line or dotted line reporting. More broadly, it may also describe the management of cross-functional, cross-business groups and other work models that do not maintain strict vertical business units or silos grouped by function and geography.

On the surface, it seems like a great solution. You’ve got individuals reporting into a cross-functional or cross-business structure, working together, connecting silos, encouraging communication and information sharing, advocating for teamwork and collaboration, and perhaps improving operational efficiencies.

But, it has its challenges. I’ve worked in this type of scenario, and it often creates more chaos, challenges, and inefficiencies. Of course, as with everything, planning and execution matter. According to Gallup, matrixed employees:

… spend more time in meetings and less time thinking about and doing their own work. One-third of highly matrixed workers say they spend most of their day in internal meetings. In contrast, only 2% of non-matrixed employees and 12% of slightly matrixed employees say their day is bogged down with internal meetings. Many matrixed employees feel overwhelmed by the onslaught of messages, questions, information requests and meetings with bosses, peers, subordinates and customers. A staggering 45% of highly matrixed workers say they spend most of their day responding to requests from coworkers.

In addition, employees experience role conflict, competing priorities, lack of clarity about what they need to do and who they truly report to, and lack of understanding what is expected of them. That sounds like it leads to other issues (e.g., burnout, disengagement, etc.) beyond silos.

Am I a fan of matrixed organizations? In general, no. I believe they have their purpose, but I’m not a fan. As a silo buster, no. I think the other issues that they perpetuate (if not planned and executed properly, which Gallup’s research finds is often/largely the case) are potentially worse than silos.

Are Flat Organizations The Answer?

Another option is the flat organization, which removes that middle management layer, allowing for open communication up and down the organization. While it allows for faster decision making and better communication, it typically only solves for hierarchical silos, those silos that are created when employees are discouraged from communicating with executives because that’s just not protocol, i.e., you can’t go above your manager’s head without talking to – or bringing in – your manager first.

Lots to think about there. Consider the options that are best for your organization, the ones that can be well planned for and executed in such a way that breaks down or connects the silos. The hierarchical organization is likely here to stay, so take a look at all the tools I’ve recommended to use to eliminate silos. Think about the employee experience and the customer experience – and, ultimately, the impact on the business, as well.

With silo mentality, organizations lose their collaborative advantage as they are being over managed and under led. ~ Pearl Zhu

Image courtesy of Pixabay.

Republished with author's permission from original post.

Annette Franz
Annette Franz is founder and Chief Experience Officer of CX Journey Inc. She is an internationally recognized customer experience thought leader, coach, consultant, and speaker. She has 25+ years of experience in helping companies understand their employees and customers in order to identify what makes for a great experience and what drives retention, satisfaction, and engagement. She's sharing this knowledge and experience in her first book, Customer Understanding: Three Ways to Put the "Customer" in Customer Experience (and at the Heart of Your Business).


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