I’m not wary of betting that there are silos in your company. You know, those departments that work only internally without communicating with other departments. Echo chambers. I’m not afraid of betting because there are silos in almost every business. And they are detrimental to innovation and achieving your growth objectives. Let’s look at one simple example that leads to the solution and then I’ll outline the four key advantages of implementing the solution to silos.
For the example, let’s take an online store that sells bikes for kids. To simplify things, let’s consider only three departments involved in the transaction.
- The Marketing Team
- The Finance Department
- The Manufacturing Shop
The marketing team brings the potential customers to the site, creates the site and the user experience on the site to incite a purchase. This team needs data such as ideal customer profile which includes demographics as well as the product specifications that will meet the customer’s needs. In this case, they will be focusing on parents and grandparents who want to purchase a child’s bike.
Once the customer places an order, the finance department needs more specific data: the customer’s name, address, and credit card information, as well as the product identification. It uses this data to calculate taxes, shipping costs, and profit margins, among other financial interests.
The manufacturing department only needs to know the product identification and specifications in order to produce the correct bike. It then updates its inventory based on the parts used to build the bicycle. Later, the shipping department will need the name and address to make sure the bike is sent to the customer in a timely manner.
In many businesses, these three departments do not communicate with each other throughout the process. Of utmost concern is that silos can negatively impact the customer experience. When these departments work independently, it becomes challenging to provide a seamless experience for customers.
The solution? A cross-functional team.
What is a cross-functional team? It is a group of individuals from different departments who come together to achieve a common goal. The team members typically have diverse backgrounds, skills, and expertise, representing roles such as marketing, sales, finance, operations, IT, and more. In the above example, it would be a representative from the marketing team, financial department and manufacturing shop collaborating to make the process cohesive from first inciting interest to finally shipping the bike.
As a CIO consultant, I’ve identified four key advantages to creating a cross-functional team.
Increased Collaboration
By bringing together a diverse group of people with varying backgrounds, a cross-functional team benefits from a broad range of ideas, approaches, and solutions to problems. By leveraging this collective knowledge, the team taps into a wealth of insights and expertise that may not be available within a single department. This, of course, often leads to innovative solutions and streamlined processes.
Improved Communication
Cross-functional teams facilitate open and frequent communication between its team members. This information exchange breaks down silos, which as we have seen are detrimental to the functioning of a company, and ensures that everyone is on the same page. Furthermore, improved communication leads to better coordination, reduces misunderstandings, and enhances overall efficiency.
Greater Efficiency
When team members collaborate closely within a cross-functional team, they catch errors or issues early on and address them at the beginning, before they worsen. By double-checking each other’s work, they can identify potential mistakes or oversights, reducing the likelihood of errors and the need for extensive rework. This helps save time, resources, and ensures that the final outcomes meet high-quality standards.
Increased Job Satisfaction
Collaborative teamwork fosters a sense of shared ownership and accountability. As individuals from different departments work together towards a common goal, they develop a stronger commitment to the team’s success, and by extension, the company’s success. This shared responsibility promotes a higher level of engagement, dedication, and motivation to deliver quality results.
In conclusion, creating cross-functional team greatly reduces the risks associated with silos. By leveraging diverse expertise and perspectives, cross-functional teams generate innovative solutions, streamline processes, and catch errors early on. The enhanced coordination and shared ownership within these teams lead to higher-quality outcomes and a more engaged workforce. As a CIO consultant, I highly recommend organizations to embrace cross-functional teams as a means to unlock their full potential and drive success in today’s dynamic business landscape.
