How Marketers Should Organize for Digital Agility

October 29, 2019
Contributor: Laura Starita 

Why the marketing organization needs transition structure, capabilities and operations for 2020.

Ask a conference panel of CMOs about the challenges that keep them up at night, and the conversation will likely focus on technology, empowered customers, data, social channels and disruptive competition. These high-profile issues make good theater. But sit two CMOs down privately together, and the conversation will almost always head in a different direction — to the organizational issues that enable or hinder innovation.

The consensus is clear: Marketing leaders can’t fulfill the promise of customer-driven revenue growth using old organizational structures overlaid with new technology. The marketing organization itself needs to change and become more agile.

"Marketing leaders recognize the need to grow, get organized and run their marketing teams like a business," says Marc Brown, Senior Director Analyst, Gartner. 

We asked marketing leaders about the status of that transition in the Gartner Marketing Organization Survey 2019. Their priorities offer insight into the state of marketing maturity and where leaders plan to focus in 2020.

“Marketing leaders can’t fulfill the promise of customer-driven revenue growth using old organizational structures overlaid with new technology. ”

Marketing organizations seek a more digital-friendly structure

The perennial question of whether to centralize or decentralize the marketing organization is again top of mind. Digitally ambitious businesses are drawn to the idea of atomizing marketing resources, and dividing them among local and divisional leaders to deliver customized, customer-driven programs. Without a central governing body, however, each suborganization is at risk of adopting a parochial view that hinders collaboration. Viewed in black and white, it can feel like an age-old dilemma: embrace efficiency and a cohesive vision but accept some bureaucracy; or prioritize dynamism and risk incoherence.   

Dynamism wins for today’s marketers. Fifty-one percent of survey respondents say their organizations will achieve some version of decentralization by 2022, up from the 20% that are decentralized today. Digital transformation, increased brand relevance and alignment of marketing strategy with the business are among the top motivators of change.

Independent of structure, marketing leaders report that their organizations’ ability to deliver on the marketing strategy and increase both new customer acquisition and existing customer loyalty hinges on three key capabilities: marketing technology strategy, adoption and use; customer analytics; and customer experience and insight. Yet these same capabilities also rose to the top of the list of organizational gaps that affect customer acquisition and loyalty.

Seventy percent of marketing organizations fill resource gaps by contracting with external agencies. Yet marketers want to reduce dependence on agencies for core activities like strategy development and instead use them only to fill tactical needs. Agency spending, in fact, shows slight declines, and 63% of respondents say they have shifted some agency spend. The differences are small, however, and movement is slow.

A lack of consensus on the value of agencies could explain why. When asked to share their main reasons for using internal marketing talent, and likewise to share their main reasons for using external agencies, the top-performing answer was the same for both: to improve operational efficiency.

Marketing operations rises in status

Marketers agree far more readily about the value of having a discrete marketing operations function, the purpose of which is to bring more business management discipline to marketing. Gone are the days when operations focused exclusively on “run” activities like campaign and lead management. Today’s marketing operations functions oversee a growing portfolio of strategic activities such as finance and budgeting, martech strategy, performance measurement, analytics, process development and talent development.

We see further validation of the rise of operations in the fact that 53% of respondents are hiring marketing ops leaders to improve flexibility and responsiveness — the highest percentage of respondents citing any role, including those related to the capabilities marketers say they need.

Marketing still faces challenges to execution

The continued search for the optimum marketing model, investments in core capabilities and the rise of operations all point to the same strategic goal: to improve execution of activities that contribute to revenue growth. Yet challenges to execution remain. More than 30% of marketers name a lack of team communication and collaboration (35%), lack of resources (31%), and lack of processes (31%) among their top 3 weaknesses. 

Seventy-five percent of respondents have embraced some version of agile to address these weaknesses. The majority use a homegrown, hybrid variation, which makes sense for marketing. The enhanced communication and process discipline enabled by agile should allow marketers to quickly recalibrate goals and resources as market demands change.

Organizational issues may not generate the same degree of excitement as an innovative campaign or a breakthrough customer insight, but neither the campaign nor the insight is possible without a strong organization behind it. To ensure yours enables marketing excellence, benchmark the current structure, capabilities and maturity level to identify where resources will have the biggest impact.

Learn more about the modern marketing organization in the complimentary Marketing Organizational Survey 2019 by Marc Brown and Christopher Ross. 

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