Monday, December 2, 2013

What to do About Silos?

By Virgil Carter

You know silos. According to Wikipedia:  “A silo is a structure for storing bulk materials. Silos are used in agriculture to store grain (see grain elevators) or fermented feed known as silage. Silos are more commonly used for bulk storage of grain, coal, cement, carbon black, woodchips, food products and sawdust.”
In non-profit organizations silos tend to result from “vertically” structured business functions where each major business function—membership, education, publications, meetings, etc.—is a separate, stand-alone, fully self-contained business operation.  Silos are often the way small and start-up organizations organize early in their organizational life—by individual function.  Silos can be an efficient way for the conduct of limited, similar business operations. 

As organizations grow, however, silos may grow to reflect an inward focus by an organization--to prioritize and do the things that those in the silo “like to do”.  The longer an organization functions with silos, the greater the importance of the individual silo becomes to those working within it.  Soon, the importance of the silo may outweigh the importance of the overall organization, at least to those dwelling in the silo.
When this perception of the importance of an individual silo takes hold, it frequently doesn’t matter (to those in the silo) if there is a market for their products, or if operations are profitable.  Further, it’s not uncommon for there to be strong competition among silos for organizational resources—financial and human.  The result?  The more silos that an organization has, the more that internal competition may inhibit organizational responsiveness, performance and viability.  Am I right on this?

Is there an alternative for improved organizational performance?  Here it is folks:  market focus!  That’s it:  market focus.

Market focus means identifying the markets critical to organizational success as the basis for the development and sales of all of an organization’s goods and services.  This involves “the voice of the customer”:  learning and understanding the customer’s expectations and requirements, delighting customers and building loyalty.  This is a far cry from “producing what we like to produce” and trying to get someone to buy it.

This perspective of market focus can be a cultural and functional shift for non-profits where volunteers and staff in silos “do what they like to do”.  Market focus is an “external view”, as opposed to silo’s “internal view”.  Implementing market focus, using the voice of the customer, involves an annual process to assess and guide an organization’s portfolio of goods and services.  This means encouraging and supporting innovation for new programs; it means sunsetting some existing programs, in a planned, orderly basis.

Market focus means new opportunities.  New opportunities mean new revenues and resources, which will benefit all organizational members and customers.  Want to trade your silos for new opportunities?  Become market focused!

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