Breaking Down Silos

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In planning a promotion campaign, a retailer needs to determine what products would be offered, their price points, campaign duration, special sales terms and conditions, and store locations. These are customer-facing tasks. There are many other tasks. The buyer needs to source products, negotiate price with suppliers, determine purchase quantities, estimate delivery timeline, and detail stock allocation. The marketing person designs the advertising materials and the store managers prepare the staff for the campaign. All these tasks require coordination among the various departments. Some tasks could be done concurrently while others have to follow a particular sequence.

If the people involved were to work in silos, the following would happen:

  • products are missed in the advertising materials;
  • incorrect store locations are communicated;
  • the promotion prices are not entered into the point-of-sales system;
  • the buyer contacts the supplier too late to secure adequate stock; and
  • inventory is misallocated resulting in stock-outs.

Both the customers and the employees could be confused, causing much frustration. Running a business equates to coordinating many mini promotion campaigns, it takes tremendous coordination as every group could not do its work in isolation. The work upstream and downstream are interdependent.

To avoid silo thinking, individuals need to be cognizant of the big picture. The awareness of who does what, how one’s work is impacted by others, and how others are affected by that person’s work helps to build a mental trigger for action. For example, when marketing begins to plan a promotion campaign, it would involve the buyer early so that the buyer could secure adequate inventory. On the other hand, the buyer could request the supplier to alert him on potential deals so that the retailer could leverage the opportunity. Everyone involved benefits.

In addition, constant reinforcement is necessary to break the habit of getting one’s work done without giving sufficient consideration to others’ involvement. A team mindset helps to minimize the silo effect. Fostering a team mindset involves creating incentives for the people to work together as a tight unit. This could be achieved via a compensation structure that rewards team effort. As most work processes involve more than one area, it makes sense to incentivize people to collaborate and strive toward a common target.

Working in silos is costly and unproductive. It is a bad habit that every business needs to break.

© Connie Siu 2013. All rights reserved.

 

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