May 13, 2011

Can Organization Silos Be Beneficial?

A while back, I had written about the disadvantages of organization silos and the detrimental impact that they can have on an organization's ability to understand the customer and build a single view of their products and services. Recently, I challenged my idea about silos.

In a discussion regarding a new initiative, I got into a conversation about organization silos. When it comes to CRM and getting the 360 degree view of the customer, the common knowledge is that we should avoid organization silos. They have a very detrimental impact on the overall functioning of the organisation's ability to provide the expected customer experience. We all know this. However, is there a case for organization silos? I am all for removing silos when we are working across departments to unify the view of the customer, but at some times I find that it is important and actually beneficial to the functioning of cross functional initiatives.
In the situation I came across, we were trying to understand our customer in a different light. Really questioning whether we really do understand our customer or not. In this case, if you stay within your organization culture, you will invariably be influenced by the tried and tested ways. That is exactly what we don't want in this case.
To really do a self analysis, you have to step away from your daily work and ask the tough questions. In this environment, organization silos have clear benefits over working in collaboration with other departments of the organization.
These organization silos are somewhat different to what we are used to, where each function is working independently with their own understanding of the customer. These are cross functional silos. Since all the functions still keep the consistent understanding of the customer and keep same view of the market positioning for the product/services, they work in a way as an organization within a larger body.
This is one situation where I found silos to be beneficial. Other benefits are when you want to run pilot initiatives, to test waters. For me, this means that we cannot really have a black and white picture about organisation silos. There is a lot of grey in this picture. What are your thoughts?

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