Silo-ization vs. The People Side of Marketing

Steve Jobs knew the damaging effects of silo-ization very well. When Jobs rejoined Apple in 1997 he immediately eliminated company barriers and reined in egos. He even allowed product managers to cannibalize other Apple products to make new ones because he said if Apple doesn’t do it, other companies would. This is why Apple invented iTunes and Sony did not.

He knew the secret to Apple’s market leadership was to keep ahead of the curve even at the potential risk of competing with an existing Apple product.  His collaborative team approach to creating innovative products not only saved Apple, it boosted share price from $21 to over $378!

Last March Direct Marketing News published results of a survey of about 100 marketing managers who shared the benefits and challenges of marketing leadership. It revealed how they inspire their team and divulged their dream job. Let’s look again at their responses:

  • What’s the most important management skill? 36% – Communication
  • What do you enjoy most about management? 28% – Coaching/Mentoring
  • What are the essential skills and attributes of a marketer today? 76% – Problem-solving ability
  • What is the most challenging aspect of management? 23% – Building collaboration with other teams
  • What is the best motivator for marketers? 27%  – Internal recognition

What’s most important to a marketing manager’s job performance? It’s communication, coaching, mentoring, problem solving, collaboration, team-building, and internal recognition. It’s not about power or pay, it’s about alignment.

Silo-ization is caused when companies are organized into separate business units that have almost no alignment with other units. In fact, most sales and marketing units are not aligned. They don’t share the same strategies, plans, goals, or insights about customers. The result is that marketing can never know everything it needs to know for maximizing profitable customer acquisition and cross-selling.

But silo-ization isn’t just about marketing. It’s a manifestation of a bigger problem.

The true cause of silo-ization is whether you have present-minded management or future-minded management. In other words, do you operate in a mode of short-term results or long-term profitability and growth? Are your managers team-builders, or competitors?

The “People Side” is your secret sauce to end silo-ization.

In Lou Gerstner’s book Who Says Elephants Can’t Dance? he shared how IBM was saved from bankruptcy by saving them from themselves. IBM was addicted to silo-ization. He stripped the separate business units and managers of their autonomy and power. He then unified them into a common-goal system where everyone’s success or failure depended on the others who were not directly part of their department. 

Here’s how one insurance company overcame silo-ization through what I call the 7-Phase Process of Problem Solving.

  1. First, they identified the right problems: Nearly 30% of customers didn’t renew and a large percentage of customers were only single policyholders.
  2. To find out more about these customers, they created a strategy to add new intelligence to all customer data.
  3. They then established a customer intelligence (CI) team.
  4. Team members were selected from different departments, including sales, marketing, products, IT, risk management, branches, and third-party solution providers.
  5. The CI team created the final plan, timing, and budgets.
  6. The team formed consensus on selecting the technology solutions and vendors.
  7. The team was trained on using the new customer intelligence tools.

 The CI team’s collaboration resulted in:

  • Extended intelligence on every customer.
  • More targeted marketing with relevant product offerings
  • Improved risk management
  • Branches knowing which customers needed timely attention
  • More effective prospecting to non-customers

To be most effective, the CI team should be led by marketing. Taking this collaborative approach will save money, and each dollar spent becomes a measurable investment in growing the customer portfolio.  The real question is, can you afford to wait any longer to begin building your team?

As Ken Blanchard said, “None of us is as smart as all of us.”

G. Mark Alarik is president of Sales Overlays Marketing

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