dept. organization is destiny
February 18, 2002
BY MICHAEL KRAUSS
ago I worked with a diversified food products company. Our marketing
department had a dry grocery group, a poultry group, a processed
meats group and a dairy group, and people really didn't talk with
anyone outside their own group. Salary and promotion were based
on making your product sales numbers. The only problem was that
each of our groups sold to the same retailers -- Kroger, Safeway
and Pathmark, to name a few -- and not all of our product lines
were equally profitable.
So we reorganized
the marketing department. For a while things got better, but then
old habits re-emerged.
marketing departments are reorganizing again, and more: We're
downsizing and trimming budgets. Marketers don't usually spend
a lot of time talking about the theory and practice of organizing,
beyond gossiping about who's getting promoted and who's out of
structure just isn't interesting to most marketers, but it ought
To get a better
understanding of the issue, I spoke recently with Mohanbir Sawhney,
McCormick Tribune professor of electronic commerce and technology
at Northwestern University's J. L. Kellogg Graduate School of
Management in Evanston, Ill. Sawhney agreed that technology offers
marketers leverage as they reorganize and can help integrate a
diverse marketing department.
Still, I wondered
if there are guidelines regarding how the marketing department
should be organized. Think of all the possible ways we design
our businesses and departments:
products -- Product marketing is possibly the most fundamental
form, whether it's Ivory soap or Palm personal digital assistants.
brands -- Intel's marketing is famous for branding.
categories -- Arranged by detergents or computer peripherals,
markets -- A leading telecommunications company organizes around
the small business market, for example.
geography -- By area and region, for example.
parent or subsidiary -- Some companies have corporate marketing
groups and subsidiary marketing groups.
function -- Customer care, promotions and market research, for
customers -- Sawhney reports that, "P&G has a marketing
unit just for Wal-Mart."
- So here
are some thoughts to consider when organizing, or reorganizing,
a marketing department:
first. The primary driver. Adopt an organization structure that
best serves the buyer.
Global Services is moving in the right direction," Sawhney
says. "(Its) whole organization is geared to serving customers
in specific industries. Schwab does a decent job in organizing
(itself) to serve customers without regard to what products
they may buy or the channel through which they access the company."
- Keep the
overlay units. Overlay organization structures shouldn't go
away; they're beneficial. A typical company will still organize
marketing as a matrix. The pitfall is to avoid anything that
distracts from a customer focus.
technology, for example, can be a distraction. In the dot-com
craze we focused more on Internet technology than on the customer's
true needs and set up separate Internet marketing units. Falling
in love with our products can become a problem, as can too heavy
an emphasis on functional structures, such as advertising groups
or pricing departments. You need these functions but they have
to be organized and integrated around serving customers.
- Use technology
to link decision-making. Groupware technology, knowledge management
techniques and other IT systems can provide the glue to build
a multifaceted marketing organization around customers.
- In my old
food products company, for instance, we lacked the means to
share information in real-time; that's no longer the case. While
it's expensive, organizations today can install systems that
can unify a diverse organization. A tool as basic as e-mail
can be a step in the right direction.
structure through compensation. People behave the way they are
measured, so make sure you reward performance that serves the
overall customer relationship.
may still be a product marketing organization," Sawhney
says, "But people should be rewarded based on how the customer
account does." I agree.
are the real mechanisms through which links are established.
While technology can help, success still comes down to the individual,
so hire people who are collaborators.
marketers with the most impact," Sawhney says, "are
the people who understand the points-of-view of their counterparts."
Hire people who are "better at managing connections than
managing objects," he adds.
When I think
back to those days in that old food products company, I realize
a lot has changed. Technology has given us an opportunity to redefine
our strategy to cross-sell products and optimize customer relationships.
We need to make sure our marketing organization structure doesn't
lag behind. My advice is to spend time talking about it.
is a partner with Chicago-based DiamondCluster International.
He can be reached at firstname.lastname@example.org or email@example.com.