Will your silo based approach turn you into the next Kodak?

A silo is a standalone structure that is used to store grain. It has no other purpose other than to store the grain it has inside it and if another type of grain needs to be stored then a separate silo is employed for the task. These silos do not work together – ever, even if one silo is overflowing and the other silo is only half full.

Similarly, business silos, be they at an organisational or departmental level, are teams that work within their own boundaries, focused on delivering to their own strategies and objectives and behaving as though all the other silos are a direct threat to their very being.

Unfortunately, the silo structure is a regular feature across the marketing function and when in play will be identified by product or channel. If you are really unlucky, your marketing function will be defined by both simultaneously (yes, government departments, I am looking at you).

These marketing departments that structure, intentionally or otherwise, around silos inevitably end up working as a group of independent teams with singular focus on delivering for the benefit of their own team/product/channel and it is a recipe for disaster.

The sad story of Kodak

Most of us are familiar with the story of Kodak. Once the brand juggernaut of the photographic industry, commanding 90% of the film market and 75% of the camera market during the 1970s, Kodak was, in its day, one of the most innovative and marketing savvy companies around; kind of like the early Apple of its era.

So when the company filed for bankruptcy in 2012, after declining sales and an inability to find its rightful place in the changing landscape of the digital photography world (ironic considering they invented the digital camera in 1975), there was a mix of shock and sadness across the market, particularly amongst those of us who grew up capturing ‘Kodak moments’.

Representing a moment in time that was idyllic, worthy of cataloguing and keeping forever, the Kodak moment is now something to avoid, particularly if you work in marketing.

What went wrong?

So, where did it all go wrong, and was there anything they could’ve done to avoid their sad and sorry decline?

Well for a start, Kodak operated in a product based silo. Film cameras to the left, digital cameras to the right, film straight ahead and printers were on the second floor, you get the drift.

Believing they were in the business of film as opposed to storytelling or creating memories which was probably closer to the truth, Kodak monumentally misread their customers. As a result, management made a product based decision to shelve digital cameras to save their film business and as a result drove a big rusty nail into their own brand coffin.

It would be safe to guess that had they broken down their silos and come together to understand the customers’ needs and wants there is every chance Kodak could have adapted their product offering, distribution strategy and advertising to meet the needs and wants of this evolving market.

If you are working within a silo structure, it’s time to look at how this could be impacting on the growth of your brand right now, and how it could impact the growth of your brand in 1, 2 or 5 years’ time.

The 10 biggest impacts a silo structure can have on a brand

1. Causes a brand to lose track of what the customer wants by focusing solely on the individual products or channels.
2. Creates an environment that encourages inter-departmental turf wars. This not only leads to inefficiencies in time and resources it also impacts negatively on morale and productivity.
3. Create barriers to change and impacts on a brands understanding as to where their weaknesses may lie. This means any weaknesses can’t be addressed and can ultimately cripple them.
4. Influences product or channel based decisions as opposed to brand based decisions as was the case with Kodak, who shelved their innovative digital camera technology for fear of eating into their lucrative film business.
5. Can prolong the life of products or use of channels that no longer deliver on the overall brand strategy.
6. Can break down or dilute brand stories creating conflicting communications.
7. Creates competition for share of voice amongst products and across channels which can lead to inefficient or ineffective spend.
8. Can make you less nimble or entrepreneurial, meaning it’s harder to adapt quickly to market or industry change. It’s much more challenging trying to bring a disparate business across to a new approach or way of thinking if they are not already unified.
9. Discourages key learnings being deposited into a central knowledge bank, leading to product or channel teams making similar errors or identifying opportunities.
10. Can negatively impact on agency roster leading to a breakdown in relationships, output and effectiveness.

Ultimately, marketing is all about aligning a brand and its product with the right customers. To do this it is vital to know intimately what the customers want and need.

And, as brands no longer wear the pants in the customer/brand relationship, it is more imperative now than it has ever been that knowledge and resources come together to categorically understand how to identify and tap into these needs in order to drive a business forward.

10 things you can do to break down the silos

1. Start treating marketing as a key contributor to the bottom line of the business and not ‘just a cost centre’.
2. Align the function of marketing to the bigger picture business strategy and create a unified approach.
3. Develop a unified marketing strategy that cuts across all products and channels and empowers the team to deliver on it.
4. Understand the business you are in and what the consumers want, then adapt your offering to suit, allowing your customers to interact with the brand the way they want to.
5. Appreciate that customers are not one dimensional and can have multiple relationships within a brand across many products – understand what these are and how you can capitalise on them.
6. Furnish the marketing department with relevantly skilled team members who understand integration.
7. Keep your eye on what is coming up across the industry and market, then work out what role your brand can play in it.
8. Share learnings across product and channel groups in order to better understand the consumer and what works and what doesn’t.
9. Avoid thinking of other products that sit under your brand as competitors, not only will it send you mad, it will mean you are not focused on the overall strategic goals of the brand.
10. Avoid thinking of channels as separate, go back to the basics of integrated marketing communications.

TrinityP3’s Marketing Structure Review service offers a comprehensive assessment of your internal structure. We deliver recommendations designed to optimise performance via the alignment of your marketing structure with the strategic focus and commercial purpose of your organisation. 

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