Power of Ideas
How to Span Marketing Silos
Haas branding expert David Aaker tackles the silo problem in a new book
By Pamela Tom
Organizational “silos” — defined by products, countries, or functions — have evolved over the last century to become barriers to effective and efficient marketing and the development of strong brands, Haas branding guru David Aaker argues in his latest book, Spanning Silos: The CMO Imperative (Harvard Business Press, October 2008). “Today’s silos are much more likely to be isolated and competitive than to have a culture of communication and cooperation,” Aaker explained in an annual marketing lecture to the Haas Community in the fall.
The financial crisis makes Spanning Silos more relevant than ever because the downside of allowing silo barriers to exist is unacceptable waste, inefficiency, and barriers to the development of strong marketing and brands, notes Aaker, the E.T. Grether Professor Emeritus of Marketing and Public Policy. “In the next year or two, companies will have to do more with less, and a big part of that is addressing the silos issue,” Aaker says.
Silos lead to confused branding, Aaker says. They inhibit the creation of customer offerings and relationships that span products and countries when customers want to buy systems rather than components and deal with global rather than country-based suppliers.
“There is enormous pressure by customers to break down silos,” says Aaker, also vice chairman of Prophet Brand Strategies, a San Francisco consulting firm founded by two Berkeley MBA graduates.
To write Spanning Silos, Aaker interviewed 40 chief marketing officers (CMOs) about their silo problem. Four takeaways from the interviews are:
First, the goal should not be to blow up silos or even to centralize and standardize. Rather the goal should be to address the silo problems in order to foster communication and cooperation so that great marketing and brands can result.
Second, nonthreatening CMO roles can be influential and avoid the risk of an early flame-out, which is all too common, as evidenced by the fact that CMOs average only 23 months in their position. The CMO can assume the role of facilitator, consultant, or service provider. As facilitator, the CMO team can establish a common planning framework, foster communication, enable cooperation, create knowledge banks, and upgrade the level of marketing talent throughout the organization.
The common planning framework can include a brand strategy component, such as one used to develop the Haas School’s Leading Through Innovation strategy, which Aaker discusses in his book.
“The brand essence, ‘Leading Through Innovation,’ was inspirational, and stimulated and positioned a host of programs throughout the silo units that operate under the Haas umbrella,” Aaker writes. “The whole school, including its silo units, became more focused, coordinated, and energized.”
Third, the CMO team needs credibility and buy-in. One tactic is to use hard numbers to demonstrate the relationship between marketing and financial performance.
Fourth, the CMO should employ some of the available organizational devices, such as teams and networks, to advance cross-silo cooperation and communication. Teams — such as Hewlett-Packard’s Customer Experience Council and Dow Corning’s Global Marketing Excellence Council — are powerful vehicles to create consistency and/or synergy.
Success at spanning silos will lead to stronger product offerings and brands as well as effective synergistic marketing strategies and programs, Aaker writes. The result: an organization that retains much of the decentralized structure that has served it well, but with silo units that work as team members rather than competitors.