So Long To Silos

Nick Mitchell | March 07, 2016

It has long been recognised that customer service, like many other business functions, can benefit from ’joined up thinking’ – tackling a problem in an intelligent way with all the important information across all relevant functions available.

As the volume of customer data stored has grown and grown, the legacy of complex, poorly integrated information has become a drag on efficiency and satisfaction. Customers, when they enquire about a product or service, want a fast answer that isn’t hampered by siloed computer systems that don’t give them full picture.


Award winning FT journalist, Gillian Tett, has recently written a very interesting book, ’The Silo Effect The Peril of Expertise and the Promise of Breaking Down Barriers’, which examines how our tendency to create functional departments—information silos— has a seriously negative effect on our work and how breaking down those silos can unleash innovation and creativity.

She offers as an example the failure of Sony to capitalise on its pre-eminent position in the world of electronics in the late 1970s when it invented the portable cassette player, the Walkman.

Sony had long been a leader in portable music, from the Walkman to portable CD players to the mini-disc. Decades earlier it had been a trendsetting, entrepreneurial company that consumers loved, the very definition of a ’cool’ customer brand, but as it grew more successful and expanded into more and more diverse areas, a silo mentality set in. Each Sony department became a small fiefdom, anxious to protect its own turf and reluctant to share its ideas and best practice with others in the same company.

Customer Experience

There was no transparency and employees across the organisation were unable to see ’inside and across’ other silos, making it impossible to understand how each groups’ actions affected the overall customer experience. So, in effect, Sony ended up competing with itself and left the field open for Apple to move in and fill the gap.

Sony lost out when the world moved to digital music, despite launching three different digital music players two years before Apple invented the iPod in 2001. Sony knew that it needed to innovate, and it did - but its divisions didn’t work together and ended up producing their own – incompatible – products.


In 2005, when Howard Stringer replaced Nobuyuki Idei as CEO (the first time a foreigner had run a major Japanese electronics firm), he worked to increase co-operation between Sony’s business units, and created a unified brand for its global operations, with a slogan ’make.believe’, but the decline had already set in and Apple didn’t need any encouragement to step up and take control.

There are many reasons why Sony didn’t invent the iPod, but one of them was surely the fact that silos paralysed Sony at exactly the wrong time when it needed everyone to work together for the common good.

A lot of functional departments would have needed to have worked together - hardware engineers, software engineers, designers and Sony Music. Every division would have had to have put aside their natural competitiveness and work together to improve their products and it just didn’t happen.

And it’s not just about coming up with new products or services of course, it’s also about not creating barriers that hinder, for example, customer service.


Retailers often have silos based around individual shopping channels (website, call centre, catalogue, smartphone, retail outlets), and they forget to organise things around their customers. Instead of creating silos around ’centres of excellence’ or ’centres of knowledge’, so that customers can benefit from a smooth, seamless experience across every channel, customers become trapped in data silos where they have to explain their query every time they contact the company and, when they do get through to someone, Customer Service Representatives are unable to help them because they don’t have access to the right information. As a result customers get bounced around, transferred, and dropped.

Not only that, but a customer’s browsing and purchasing history, feedback, web and mobile analytics, customer service interactions, social media and so on are all recorded in separate places with no ability to shed light on the total customer experience.

Customer data is not self-explanatory, and legacy systems weren’t designed with this kind of omnichannel interconnectivity in mind, leaving those insights trapped in silos.


So, getting back to MsTett’s book, the message, if there is one, seems to be that people should regard their jobs, practices, tribes and attitudes, as wholly temporary and contingent on others. Having a distinct sense of your own team’s identity and purpose is one thing, but it can be downright embarrassing when you find out you’ve been working on a project for the last six months which is exactly the same as another team’s without knowing it.

At first glance, it’s easy to see why this happens. We live in a complex world and it helps to create structures that organise everything and label everything into categories.

But this type of mentality will end up reducing efficiency in the overall operation and ultimately contribute to the demise of a healthy company culture.