Crisis in Marketing Brings Unprecedented Opportunity

Now's the Time to Change Organizational Design, Processes and Approach to Data

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Gordon Wade
Gordon Wade
Marketing is in crisis. Brand equity is steadily declining. Customer loyalty is evaporating. Marketing ROI is plummeting. Margins are shrinking. The marketing ecosystem has changed forever. Why? Because of the radical change in the way in which consumers receive and process information today. Due to the rapid reticulation of digital networks that both empower and influence consumers in new ways, every business faces an ominous threat -- but also an unprecedented opportunity.

To succeed in this new era, companies -- especially the marketing and advertising functions -- must change three fundamental, interdependent aspects of their marketing model: their organizational design metaphor, their processes and their data dexterity.

What CMOs can do to survive change in the marketing ecosystem
  1. Audit your customer's information-gathering habits

  2. Investigate all the new analytic services

  3. Redesign your marketing organization around the customer

  4. Take the ANA's process-benchmarking survey

  5. Make the customer "the boss" of your marketing activities

My goal here is to summarize how we arrived at this point and what we need to do to reinvent marketing as an effective, respected capability. In subsequent columns I'll address the need to embrace a network organizational structure and abandon functional silos, the need for greater data dexterity and, finally, the need for vastly improved processes to drive the network and leverage the new data, sharing for the first time the results of the marketing process benchmarking survey offered on an ongoing basis by the Association of National Advertisers to its members. Those results point the way to practical improvements marketers need to make today in their internal processes.

Advertisers and marketers must change because everything in their ecosystem has changed. As a result, their old model is broken and pitifully inadequate. Today's consumer stands at the epicenter of an ever-expanding digital network that he can use to capture information but that can at the same time bombard him with individualized, "addressable" influences appealing to uniquely understood functional and emotional needs.

The threat to every business and every brand is that the customer will be enfolded and snatched away within this new web of influences. The opportunity for every business is to create and capture new customers by leveraging the extraordinary power of this new network. All marketers are trying to thrive or at least survive in the new ecosystem. But most are failing. For them, the crisis of customer centricity or addressability is a mortal threat.

Why are they failing and how can they succeed?
Most businesses are designed to compete in the environment they see and feel around them. They organize themselves to gather data, to create products and services and to persuade customers in this environment. But when the environment changes rapidly, the old capabilities may actually become a detriment to survival.

Solving this problem is made more challenging by the fact that most of today's top executives came of age in what we call the era of the informational and organizational silo. Even those who intuitively feel the network surrounding them lack the instinct to respond appropriately.

Gordon Wade is founding partner of EMM Group, an enterprise marketing management consultancy. A thought leader in marketing, he has pioneered ground-breaking disciplines such as category management, shopper marketing, enterprise marketing management, marketing accountability and now organizational design for marketing in the digital age. His long relationship with the Association of National Advertisers as a consultant and advisor has given him a unique, holistic view of the challenges facing marketers today.
And when they finally respond, they tend to restrict the response to the organizational component of their problem. They move the organizational boxes around or add and subtract people. What they need to do is change the data they capture, the way they analyze it and then act upon it.

The only way for a company to survive and thrive in the new, networked customer environment is by abandoning the silo approach and operating as a network. It requires much better processes and infinitely more data dexterity.

Just as today's customer has a different expectation about the companies from which he seeks goods and services, so must the networked organization have different expectations from its internal members and a different relationship with its external customer. In hindsight, I think that is what Procter & Gamble CEO A.G. Lafley was trying to communicate to his organization with his simple mantra, "The customer is boss."

At its most basic emotional level, this mantra is a direct order to his own organization to stop looking upward for direction from internal faux bosses and start looking outward for direction from the real boss, the customer. It is a subtle request for an organizational attitude adjustment about whom and what is really important in this new era of customer centricity.

In practical terms, this means that to compete more effectively in the new environment, the consumer and his needs must drive the organizational design.

But this new network will be paralyzed unless it has much better processes, including a process czar who can facilitate smooth handoffs from an ever-changing set of internal and external members of the network. In fact, process will be more important tomorrow in the networked organization than in today's siloed organization. That's because the customer at the center doesn't care about how you are organized internally. He cares about getting solutions for his needs. This inevitably means companies must rally different combinations of skills both internal and external to meet the customer's changing needs.

In my next column I'll discuss the need for and how to establish a totally different organizational structure to replace the stagnant functional silos. The new structure, the network, holds the promise of reducing fixed costs and producing a much more effective result.

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