Have you ever been part of a company where organizational structures seem to go in cycles? Sometimes centralization of resources is the trend; other times decentralization into individual business units is desired. Corporate organizational structures are often employed without intention. People use what’s worked for them in the past. I’m sure many of us relate this to a change in leadership and change in leadership preferences and style. Shouldn’t it be based on more than that? How does the centralization or decentralization of marketing and creative resources directly relate to enterprise and modern marketing goals?
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First, let’s define what we mean by each type of organizational structure:
A centralized structure refers to one department that is responsible for all marketing and creative services activities. This includes management of a unified brand image for the enterprise. A central organization is responsible for partnerships with external resources. All work within scope flows through this central unit.
On the other end of the spectrum is a decentralized structure in which marketing and creative resources are distributed throughout the organization in separate business units. Under this structure, each business unit is responsible for their own marketing efforts. Teams operate in disconnected silos. This is often seen in large companies with a diverse range of businesses and brands.
Yet another structure is a partnership network (hub-and-spoke model) that is becoming more popular with today’s marketing organizations. The hub is the Center of Excellence that encompasses marketing operations, enterprise-level marketing and brand, and a centralized creative organization itself organized into roles and teams best suited for the work and goals of the organization. The spokes may be marketing teams embedded in the business unit with a matrixed reporting structure to the CMO in the hub and overseeing the business unit’s marketing strategy and execution. The spokes may also be global teams reporting into the central hub.
Next, let’s take a look at some of the benefits and challenges of each model:
Benefits of Centralized Structure Include:
Consistency – Whether you are talking about the brand, a campaign, or particular message, it is far easier to get consistency across channels and audiences when working in a centralized structure. Centralization encourages a consistent customer experience.
Efficiency – Efficiency is realized through economies of scale and standardization of technology, processes and metrics. This is particularly important when considering costly technology, reliance on data, and the use of high-impact creative assets. Centralization minimizes redundancy and duplication of effort.
Talent maximization – A centralized structure better enables utilization of talent and allows for specialized skill sets. It supports an internal creative community and culture while providing a clear line of authority.
Customer centricity – A centralized marketing and creative structure is positioned to develop cross-product customer experiences, and to identify opportunities where work and the customer journey overlaps to better deliver customer-focused campaigns.
Accountability – Accountability comes from sharing a common mission, vision, and goals tied to the enterprise goals, and then holding employees responsible for accomplishing these objectives, completing assignments and making decisions that deliver on these expectations.
Collaboration – A centralized structure reporting to a common executive leader will naturally enhance the ability to collaborate across business lines for both strategic and operational purposes.
Challenges of Centralization Include:
Business line expertise – A centralized group is a step removed from their business partners. Appropriate resources should be aligned (not dedicated) to business units to gain deep knowledge of the business, products and services. Not all skill sets require this alignment.
Prioritization – When all business units are working with a centralized group of marketing and creative talent, prioritization of the work can quickly become an issue. It’s important to address a prioritization strategy at the executive leadership level.
Agility – To allow for the nimbleness needed in the modern marketing environment, both the type of work coming through and the business requirements need to be taken into consideration as structure and processes are developed.
Benefits of a Decentralized Structure Include:
Business line expertise – In a decentralized structure, the team is embedded in the business unit allowing for strong development of business knowledge.
Singular focus – The focus on a particular business line makes project prioritization and resource utilization easier.
Customization – In decentralized structures, there is more opportunity to customize for customer and market needs without considering a need for consistency across the organization.
Challenges of a Decentralized Structure Include:
Inefficiencies – Duplication of efforts can result in inefficiencies. Often user research is marginalized. Overall, there is a lack of building on the work of others around the enterprise.
Deviation of goals – Goals may become as siloed as the organization itself.
Lack of consistency – In a decentralized organization, the business line may fail to see the bigger picture of the market situation and competition for the organization as a whole. You may also find that the brand implementation is up to interpretation.
Small teams – Decentralized teams are generally lacking in specialized skills due to the limited number of positions available for each business unit.
An Organizational Structure Based on Partnerships
A partnership network may combine the benefits and challenges of both structures. This is a complex model and can prove to be successful only if partnership is truly embraced to provide an environment where business units have some autonomy as they partner with a Center of Excellence, which centralizes creative expertise and control.
Benefits of a Partnership Network Include:
Balance – You gain greater efficiency and effectiveness while also maintaining a customer focus.
Consistency – Working with a centralized core with good communication can enable consistency and vision across the organization.
Global localization – As with consistency, working with a centralized core may help establish parameters for a global network.
Challenges of a Partnership Network Include:
Operational challenges – Forming an operational core is one of the biggest challenges of this model. Besides the infrastructure of technology and data management, there is the need for process optimization; planning and forecasting; and customer, competitor and market intelligence. While the teams in the business units are largely focused on the parochial demands of their business unit, the Center of Excellence, through the marketing operation team, ensures coordination, alignment and collaboration across all of marketing.
Authority – As the operational team ensures collaboration, the establishment of where specific authority lies with leadership is critical to outline in this model.
Partnership/collaboration concerns – All these challenges come down to how the partnership network will collaborate with one another regardless of where they sit in the organization.
When determining whether or not to consolidate and centralize your organization, decentralize, or use a partnership network model, take into consideration your enterprise mission, vision and goals and align your structure and services accordingly. Each model has challenges that will need to be overcome and can be as long as the overall approach aligns with your strategic goals.
Once you determine the overall organizational approach, there is work to do to structure your department and put processes and procedures in place to be able to realize your vision and goals. This work can seem daunting but is manageable as you break it into smaller pieces to accomplish over time. You don’t need to go it alone. An experienced Cella consultant can offer an independent point of view and help you define the organization and implementation plan that is practical, and best suits your needs and goals.