People, Process and Organization Must Evolve Now

Nike, P&G, J&J Have Adopted to the New Digital Reality

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In the evolving digital environment, the central issue is that the skills and capabilities required to succeed as a marketer have changed significantly. While every marketing executive recognizes the pervasive pull of the internet, most allocate only 5% to 10% of their ad budgets to digital media. And unfortunately, many marketers -- by their own admission -- have not adapted to the new reality. Fewer than one in four of the participants in Marketing & Media Ecosystem 2010 -- Booz Allen Hamilton's cross-industry study completed with the Association of National Advertisers -- consider their organizations "digitally savvy." The principal impediments are lack of senior organizational support, lack of experience in new media and the dearth of digital talent.

Leading marketers such as Nike, Johnson & Johnson and Procter & Gamble are indeed recognizing that digital and interactive are no longer niche capabilities; they are a requisite skill set for all marketers. In response, there's a lot consumer marketers have to do: prioritize internal training in digital marketing; hire technologically savvy talent; cultivate a progressive culture that embraces -- and uses -- new technology and media; institutionalize flexibility in responding to customer needs; and create and formalize processes for integrating consumer insight into products.

The problem for many companies is that this is a journey without maps. Most marketers will have to stretch beyond their comfort zones to figure out the answers.

People are the first place to start. The new marketing uses data to select and integrate a wider range of tools more precisely to smaller groups of consumers. It places a premium on the ability to access, integrate, analyze and apply data. That means recruiting people with data-analysis skills.

Companies will still need generalists, of course, perhaps more than ever. Most marketing departments need fewer vertical people trained within a discipline and more flexible operators. It's better to have someone who knows how to integrate customer-relationship management with digital or retail communications.

Marketers must also cultivate and train their existing ranks. Reverse-mentoring and rotational programs can help. Companies such as J&J are using externship programs to enable selected executives to spend time directly with their advertising and media partners and thereby accelerate the development of digital-marketing capabilities.

Beyond experiments with new marketing techniques and tactics, most marketing departments remain structured around organizational legacies, chiefly the output of TV and print advertising. What they need is to integrate analysis, thinking and planning across all communications and media technologies. In practice, that means media must become strategic, rooted early in the fundamental architecture of brand planning.

To build and invest in new ways of communicating, more communication will be needed, internally across finance, IT, marketing and the sales organization and externally with communications agencies and retailers.

The second big change is in incentives. Successful companies will align key incentives around overall brand or business objectives. The incentives can also reflect the development of marketing analytics.

People, process and organization: These must change. Marketers know their world has been altered. What they need more quickly is the corresponding action around both human capital and the marketing processes and organizational structures within which they work. The companies that get those answers right will find future success.
Richard Rawlinson is a VP with Booz Allen Hamilton. He contributes extensively to the firm's strategy and organization.
Christopher Vollmer is a VP in Booz Allen Hamilton's global consumer and media practice, based in New York.
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