Haas Newsroom
How to Span Marketing Silos
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.
In firm after firm, executives are recognizing that autonomous silo organization is no longer a viable option, he says. Silos lead to brands that are confused both internally and externally, undercutting brand building programs. 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, who is 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:
First, the goal should not be 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. Whatever advances a company toward that goal will be welcome.
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. In particular, the CMO can assume the role of facilitator, consultant, or service provider. In a facilitator role, the CMO team can establish a common planning framework, foster communication, encourage and enable cooperation, create data and 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. When a return on marketing investment can be demonstrated, the stature of the CMO team will be enhanced and their image of being soft and unanalytical will be reduced.
Fourth, the CMO should employ some of the available organizational devices, such as teams and networks, to advance cross-silo cooperation and channels of communication. Teams -- such as Hewlett-Packard's Customer Experience Council, Dow Corning’s Global Marketing Excellence Council, or IBM’s Global Marketing Board -- 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 can be 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.
