Monday, February 26, 2007

Organizational Simplicity

Today’s marketing organizations are facing even more than ever the problems of any functional discipline of large corporations: Extreme inefficiency due to an organization that is stuck in a multitude of silos. It’s still surprising that the extreme pressure of marketing in the 21st century has not changed significantly the make up of marketing organizations.

Over the last 12 months I have observed one solution that can address this malfunction in marketing organizations: Simplification. The solution lies in simplifying any organizational elements of marketing teams. Most Chief Marketing Officers build a highly complex marketing organization with a multitude of external partners instead of simplifying the organization. A couple of thoughts on simplification in marketing organizations
  • I recommend that any marketing executive thinks of three key functions that its marketing organizations need to fulfill: Information, Imagination, and Execution. Information is the discipline of synthesizing the relevant data points into meaningful insights; Imagination is the discipline of steering a brand into realm of always engaging interaction between consumers and the brand; Execution is the discipline of making things happen aligned with the defined information driven brand strategy on a daily level. All marketing groups need to fulfill one of these three purposes; any other group is probably irrelevant, maybe even destructive.
  • Most Marketing Organizations have too many external partners instead of reducing the numbers of service providers to a handful that they trust and respect. It’s not uncommon that Fortune 500 companies have over 100 external marketing service providers on a global level, or just in North America over 50. The search for always the best providers in every singly subfield underestimates the complexity and the increasing inefficiency of too many service providers. I don’t believe that any marketing organization can manage efficiently more than 10 service providers. If there is need for more very specific services, let some of the already existing service providers do the management.
  • Too many Marketing Executives don’t assess strategically the core assets that the organization needs to build and have. The decision of what should reside in-house and what can be outsourced is too often shortcut and not diligently pursued. Every executive should put on one simple piece of paper the functions that are strategic competitive advantages (and should therefore reside in-house) and the ones that will and should be commoditized (and should therefore be outsourced).

Too many CMOs try just to replace existing individuals and 3rd parties instead of changing the fundamental root of dysfunctional marketing teams: High Complexity with too many players.

2 Comments:

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