Here’s another interesting finding from the social media survey—there is zero correlation between social media resourcing and business results.

That may or may not surprise you when it comes to financial resources.  But the result held true for people resources, as well.  That came as a surprise to us, since social media efforts are often so labor intensive.

How could this be?

Having talked directly with 90% of the 500 organizations that have taken the diagnostic, we have a theory.  It boils down to a lot of organizations spending time and money on social media without a clear connection to, or at least hypothesis about, how those efforts could plausibly drive business results.

So, here’s what underneath the zero correlation in the regression analysis we did:

• Some of the organizations winning with social media spend little by way of resource, but focus those efforts very well on the few social activities that have potential to drive results.  Call these guys the Guerrillas.  They are winning through small but disciplined spend in social media.

• Meanwhile, on the losing end, some organizations put a lot of resource into social efforts, but don’t see much payoff because they are focused on areas that are unlikely ever to produce business results.  Think of B2B manufacturing organizations setting up Facebook pages.  Very unlikely to yield meaningful business results.  Call these guys the Shadow Jumpers.

• You’ve got another set of companies that spend a lot on social media, but spread their social efforts too thinly across many opportunities—call them the Peanut Butter Spreaders.  Altimer just reported the average global enterprise manages over 175 business-related social media accounts.  Yikes.  Time for “Operation Cull the Herd”.

Because you’ve got these high spend, low results organizations intermingled with high and low spend but high results organizations, you end up with zero correlation between spend and results.  Bottom line, it’s not how much time and energy you put toward social media, but how well focused those resources are on areas that have potential to create real business value. In other words, be a guerrilla.

If you’re an MLC member, and you’d like to take the social media opportunity diagnostic, let your account manager know or send me an email: pspenner@executiveboard.com.  We’ll put a report in your hands with all kinds of useful benchmarks, and offer some advice based on your results.

By Ana Lapter

A deepening debt crisis in Europe is making “austerity” the word du jour. To avoid budget cuts, many executives are under increasing pressure to demonstrate the ROI on marketing expenditure.  Historically, this was never an easy thing to demonstrate; many marketing activities are designed to build brand awareness or engage customers, things that are hard to quantify in a strict ROI framework.  But continued economic softness heightens the need to increase marketing productivity – the amount of value we get for the work we do.

How can a marketing organization become more productive while avoiding unnecessary costs?

The easiest approach is to cut staff and expect the remaining employees to do more with less. This, however, is not a good solution from the perspective of staff engagement and retention.  As one MLC member put it: “We’ve freed up a lot of money by streamlining staffing expenses already; there’s nothing left to gain from further cutting.” In addition, hiring has become a difficult proposition. In fact, many organizations design hard-to-fill-jobs that require an individual to master multiple skill sets that were traditionally split among multiple employees or were built in- house via extensive training programs.

Redefining marketing productivity in this recessionary climate calls for different actions. Here are three ways to boost productivity – without cutting staff:

Select better metrics. As one member noted: “We need to stop reporting how a recent ad campaign increased our brand’s reach X%, and, therefore, enhanced our brand’s visibility – and rather,take a P&L approach to metrics design.” In cases where ROI measurements are not available, I recommend the use of attitudinal or behavioral “bridge” metrics, rather than “volume”-centered, generic indicators, such as number of brand followers, Facebook fans, web visitors, page clicks through etc. Marketing should start using more intermediate metrics to measure the impact of specific activities that drive or connect the dots with a commercial outcome, such as NPS, loyalty or purchase outcome. The benefit of using a bridge metric approach is double-fold: it builds business buy-in and helps de-emphasizing low-value activities.

Build skills internally. One member explained that Marketing needs more MBAs or other hard-core business staff, but I personally believe (and a good deal of evidence supports) that a better approach is to look for people with general business sense or instinct, rather than financial skills or specific terrain knowledge.  Another way is to start building business acumen inside the organization by promoting job rotations across functions, creating templates for business cases, and designing light training programs, (e.g. Finance for non-Finance).

Integrate Marketing more tightly into the rest of the firm. Integration can be done at multiple levels:

• Strategy: One classic MLC best practice illustrates how to analyze desired marketing contribution to firm strategy.
• Process: Given the multitude of customer touchpoints across an organization, Marketing should reach across the aisle and improve end-to-end, firm-wide processes like customer experience, demand management, customer communication and customer insight generation. Some members enable these processes by creating new roles (e.g. Chief Information Officer and Chief Customer Officer) or by designing cross-functional governance bodies.
• Incentives and roles:  For instance, one member drove better alignment between Sales and Marketing by bringing both teams to agree on a simple definition of “lead” and measuring each function’s role in lead generation activities.  Another example is to recalibrate Marketing’s long-term focus on segmentation and brand affinity goals with Sales’ short-term revenue focus by creating a common denominator centered around customer engagement and functional contribution to brand revenue.

Increasing productivity in touch economic times shouldn’t start with painful staff cost cutting measures, but rather with intelligent selection of and over-investment in value-added activities and cross functional partnerships.

The problem is a “bottom-up” approach.  Marketers spend a lot of time collecting data to show progress against marketing-specific targets.  And  they typically start with data that is easy to track.   But the volume of likes and re-tweets isn’t likely to convince a CFO that money is being well-budgeted.

Instead, marketers should work their way backwards.

When I was little, I loved solving those maze puzzles in my local newspaper.  Only I always did them backwards, starting at the center and tracing my way out.  I had trouble defending my method, but to this day, I’m still a firm believer in starting from the end goal when developing a problem-solving strategy.

The marketing function at Vista – a high-tech firm that has asked us to use a pseudonym on this case – seems to agree.  Facing scrutiny from senior management, they set out to link themselves to overarching corporate goals, rather than focus on internal (marketing-specific) measurements.  The key to their dashboard: a bold, 4-step reverse-engineering process that ensures alignment between marketing and other senior management.  In other words, work your way out from the center of the maze!

1. Begin with stated corporate goals.
2. Determine the supporting marketing goals and the metrics that best capture their progress.
3. Select the activities best-suited to impact the chosen metrics.
4. Capture this information with a broadly accessible web-based dashboard.  (MLC Members, see an example of the dashboard here.)

See how Vista worked out which activities did/didn’t align with corporate goals here.

The explicit alignment of company goals and marketing progress boosts non-marketers’ understanding of the function’s impact on firm performance.

MLC members, read more about how to effectively re-engineer your marketing plan to align with your company’s goals.

Have you heard any other good ones? Let us know in comments!

Marketing’s good for creative stuff, but nothing that requires left-brained thinking. We hear pretty regularly that there’s an assumption within companies that marketing staff are mostly right-brained creative dreamers – folks who spend all day making paper airplanes or doodling, only to come up with random strokes of genius at exactly the right time.

Obviously, this couldn’t be further from the truth. In the era before pervasive data, this assumption might have been more relevant, but the gradual arrival of more and more data (anything from sales numbers to direct mail metrics to consumer sentiment tracking and beyond) has transformed our function into one that’s as data-driven as any other.

Across the next few months, we’ll be studying how marketers should best use data to inform their decision-making. Interested in helping out? Start by taking this survey (or, if you’re B2B, this one) and let us know what you think!

Marketing and advertising are more or less synonymous. Similar to the misconception above, there’s a notion inside companies that marketing is mostly about creative development and adjacent fields like media planning, buying, and analytics.

In fact, marketing does have a lot to do with those things; for consumer brands, especially, mass media is one of the few avenues to scale demand. But stated more broadly, marketing is about the intersection of brands and markets, and advertising is only one way that brands interface with buyers, and marketing folks also participate in enterprise-wide decisions around R&D, public relations, sales, new product development, and more.

For tips on playing nicely with other functions, check out our Cross-Functional Alignment topic center.

For B2B’s, Marketing’s role should be limited to sales support. Perhaps some of the toughest turf battles in modern business occur between Marketing and Sales in B2B companies, and its easy to understand why. Professional salespeople want greater leeway to customize their approach and craft deals that fit the customer, while marketers seek to standardize go-to-market practices and messages. Sales folks – and many corporate leaders – settle this turf battle by giving marketing a role subordinate to that of sales.

Truth be told, Marketing does have a legitimate role in supporting sales folks; for B2B’s, Sales remains one of the major channels to market. But declining budgets, increasing independent research, and proliferation of channels means Marketing should take on a greater operational role to keep deal sizes constant or rising and capture the attention of customers pre-Sales contact.

Slow internal processes shouldn’t affect Marketing’s ability to do its job. Marketers in most consumer brands have come to a scary realization: that, unless messaging, pricing, placement and product attributes are evaluated on a continuous basis – and by “continuous”, I literally mean every few minutes – brands run the risk of losing ground to competitors.

But other functions haven’t caught up yet to marketing’s need to continually engage the market, and there’s a misconception that our efforts to get new initiatives up and running fast is naive, reckless, or both. In reality, speeding up internal processes around things like social media is an effort to stay relevant in a market that is constantly shifting.

For tips on getting buy-in from, ahem, slower-moving peers, check out our library of best-in-class social media policies, and keep an eye out in the next few weeks for some tips on working with IT teams to implement more market-responsive systems.

Coaches and planners go into intensely competitive situations (football stadiums and market economies, respectively), lead teams with certain strengths, certain weaknesses, and a limited ability to change those things, adapt a “game plan” without knowing much about how the other side will react, and end up being judged on things that may or may not be their responsibility. They have to be meticulous enough to draw up most of the game in advance, but flexible and agile enough to call new plays should conditions warrant them. Most of all, they have to have the ability to get everyone on the same page, and motivate and marshal their teams to execute on the plan.

Football teaches, I think, 3 big things to marketing planners and managers:

Make a game plan, but keep it flexible. Football is an enormously complicated game; so complicated that, without a mental heuristic like a game plan, coaches would spend most of their time flipping through three-inch playbooks and inevitably make a lot of mistakes. But game plans are rough outlines of what the game should look like from one team’s side, and if a coach sees an opportunity on the field, it would be nuts not to depart from the game plan and call a play designed to exploit whatever opening the defense is giving him.

So too, with marketing planning: the number of touchpoints and channels our teams manage are orders of magnitude more complicated than they once were. So we plan to take some of the complexity out of our jobs. But if a market opportunity arises that the plan doesn’t account for, marketers must be willing to change things up.

If its possible, outsource. In the NFL, there’s a whole continuum of coach control. Some coaches call every play, offense and defense, themselves; others outsource play-calling to their assistants or coordinators; still others allow their quarterbacks to call plays at the line of scrimmage. But coaches who call their own plays have a notoriously poor record in the modern NFL – the complexity of the game has gotten to the point that those who try to do it all themselves usually fail. Teams that are consistently good in the NFL very often have play-calling authority vested in a number of places across the staff and the team.

For marketing leaders lucky enough to have well-developed teams, outsourcing decision-making processes is a powerful way of simplifying the world and freeing up your energy to focusing on strategic concerns and emerging trends. And for globally-focused organizations, relying on on-the-ground knowledge can be a way of getting better returns, too.

Don’t let risk-aversion affect the score. Here’s one where football coaches don’t do too well: they consistently allow risk aversion and poor risk assessment skills get in the way of what could be an extra victory or so per year. How? They don’t go for it enough on 4th down. David Romer, an economist at the University of California, studied every NFL 4th down across nearly 700 games. What he found was that coaches should typically attempt a 4th down conversion much more than they actually do; if 4th down conversions were maximized, an individual coach could potentially win about one extra game per year – and in a 16-game season, that can mean the difference between hanging up the cleats in December and going onto the postseason.

Why don’t coaches do more with their 4th downs? It can be chalked up to one of two reasons: either coaches aren’t accurately assessing the risk – they think going for it is riskier than the points they give up by kicking a field goal or punting – or, they accurately assess the risks, but are concerned about taking the blame if the call goes wrong.

The lesson for marketers? Take a hard look at areas in your “game” where you’re making risk-based decisions, and try to get an empirical basis for those decisions going forward.

MLC members, have anything to add? Let us know in comments.

In our conversations with CMOs and marketing leaders around the world, the consistent theme we’re hearing is one of agility – marketers and their teams need to be able to tackle a wider variety of tasks and responsibilities in order to take advantage of fast shifts in the market.

Want to develop a more agile team? Read on for some tips gleaned from our conversations:

Develop a T-shaped workforce. These are employees with one deep area of expertise, but also a wider breadth of skills/knowledge.  This is important in a world in which roles are more ambiguous/complex & staff need to collaborate with other roles/functions (and therefore need to understand them).  Having a T-shaped workforce also helps shift people about, an important organizational capability in times of turbulence.

Use multi-directional career pathing. Instead of simply assessing an individual’s potential against one linear career path, assess potential (in terms of both strengths & proclivity/willingness) to fulfill a range of future roles.  Knowing all the different roles an individual could step into puts an organization in good stead for turbulent times.  If staff members have to leave, their positions can be more easily filled, and if new roles emerge, it’s clear who’s best for them.

Employ “reverse shadowing”. Get senior marketers to shadow new hires or even interns to learn how to communicate in a world of social and mobile connectedness.  This can take the form of weekly learning sessions or just an effort to get executives to attend interns’ final presentations.

Focus on judgment, not data crunching. Now that “big data” is so freely available, some marketing functions are making it part of everyone’s jobs, blindly giving everyone access to data and encouraging them to use it to inform their decisions.  The problem is, this eats into execution time, runs the risk of data misinterpretation, and leads to conflicting analyses and a lack of accountability . Instead of trying to boost data analysis skill and making this part of everyone’s jobs, focus on good judgment instead. This includes qualities like (appropriate) cynicism, knowing which questions to ask, and a certain degree of intuition.

Instead of hiring supermen/women, pair up employees with complementary skill-sets. It can be very hard to find job candidates with a combination of analytical/technical and creative/judgment skills. Instead of searching for these elusive few, consider pairing up employees with a marked strength in one areas and weakness in the other.

Increase rotations & role changes. Stop people from getting stuck in their ways by continually adjusting their roles.  This also helps staff learn new skills, form new connections within the organization, and ultimately increases agility and the t-shaped workforce.

Hire learning-agile staff. Hire people who seek out new opportunities and learning experiences, rather than those who find it hard to adapt. Personality is the biggest factor in determining an employee’s ability to adapt & perform well under change.

Don’t stifle natural agility. Our sister program, the Communications Executive Council, found that people are far more agile in their personal lives than at work. How can employers take advantage of that natural agility? Make work more like real life: tie outcome metrics to day-to-day duties, and put work in the context of organizational growth and long-term priorities.

MLC members, what else can marketing organizations do to keep their teams agile? Let us know in comments, and check out our Organizational Management topic center for more on running an effective organization.

Whether or not we are in fact at a watershed moment in global marketing leadership is up for debate, but most of us as marketers can agree that the decades-long trend of expanding into new markets is increasingly set against the backdrop of trying to create a more tightly knit global marketing organization. More and more marketer roles with a pan-geographic focus are surfacing in our conversations with members. Marketing processes are incorporating a more diverse range of inputs from across organizations’ geographic footprint. Resource allocation post-credit crisis tends to be more reflective of countries’ future opportunity versus simply our historical habit of investment.

But amid all of this progress, marketers tell us that they still struggle to see substantial gains in global marketing integration. One member recently commented, “the discussion internally has clearly shifted toward capitalizing on the scale of our international marketing operations but, if anything, it seems that we’re moving further and further apart.”

So, what’s getting in the way?

Earlier this year, MLC concluded a thorough analysis aimed squarely at this global marketing integration challenge. It turns out that despite all of the structural improvements (new roles, processes, resourcing methods), we still face significant and growing difficulty fostering communication across global marketing teams. The figure below highlights four communication areas that surfaced as having become more important in the past three years, but which we see marketing organizations struggling to address.

The challenges are not insignificant: sharing information and best practices across regions, sourcing local insights, communicating and enacting a global marketing strategy, and getting regional buy-in to central marketing decisions.

Fortunately, some marketing organizations are beginning to chip away at these performance gaps so that the rest of us can learn from their experience. In recent conversations we’ve seen progressive marketing organizations pursuing tactics such as internal social media tools that drive familiarity across geographically isolated teams, or training that teaches pan-geography collaboration methods.

MLC members: we’ve documented a number of these “best practices” and published them here for you to examine in further detail. Feel free to email me with any of your ideas or questions at: mccancem@executiveboard.com.

Talent management, though, is not a matter of skill (most executives have the business skills necessary) or time (effective executives and ineffective executives spend roughly the same amount of time on talent management): the issue is focus.  Executives should approach talent management strategically—managing key talent like a corporate asset that is developed and deployed in support of business objectives. 

Becoming a Talent Champion outlines five key activities executives should focus on in place of day-to-day staff management, including building the high potential bench, holding the senior team accountable for talent outcomes, and owning the organization’s talent strategy.  To learn more, download a complimentary copy of this new publication or order the eBook.

MLC Members, check out our best talent management tools and insights in our Talent Management Topic Center

Why is getting talent right so important in structuring a global marketing department?  Org structure is all about trade-offs and sacrifices are often necessary.  For example, global consistency comes at the cost of local customization, while in-market agility comes at the expense of a cohesive, long-term vision.  Fostering top talent can act as a trade-off dampener in org structure decisions.  Get it right and the tough choices marketers have to make can be smoothed out and made easier.  Get it wrong and all the weak spots in your org structure are magnified and the sacrifices more obvious.

People problems exist both at the top and in the field.  Central Marketing struggles to get people to think globally and holistically to address big-picture challenges.  At the same time, employees in developing markets sometimes lack the experience to consistently execute directives from HQ.  In our member pulse poll, global marketers admitted that talent issues were gaining in importance but that performance gains were still needed:

• Sixty-eight percent said “Getting staff at Central Marketing to think and act more strategically” was more important than three years ago, yet only 25% rated their organizations as highly effective at actually doing this;
• Similarly, 70% noted that “Finding and retaining top talent in global markets” was more important, but just 20% said they were highly effective at doing so.

So what can marketers do?  Never fear, we have a few suggestions.

For those struggling to boost global capability at the top, direct exposure to the unique business and cultural issues inherent in certain markets can both reframe the way marketers think and develop new skills.  GE has a best-in-class rotational program that, while not specifically global in nature, could definitely be adapted for this purpose.  Less formal, but still effective is CPG giant Reckitt Benckiser’s frequent international shuffling of executives.  Read about both here.

For those who are working to develop talent in international markets but find that some employees don’t yet have the experience to effectively execute important campaigns.  SAP observed that regional groups spent time and resources planning their own campaign strategies which led to mixed results and inefficiency.  So, the company developed Standardized Architectures in conjunction with regional groups to serve as guardrails to help regional marketing staff execute campaigns successfully.  Read more here.

With all due respect to Mr. Welch, simply having the best players isn’t enough to ensure victory on the global stage given the myriad of challenges marketers are facing, but it can certainly help.

MLC members – check out the full study on the web including a clickable decision tree and other members’ org charts.

Well, probably not quite.  Even with things looking up slightly from last year, your buyers and consumers are still pulling your cost-value ratio through a fine-toothed comb.

So how do you stand out from competitors in your industry in a way that maintains your profits?

MLC research confirms that brands that successfully implement a talent strategy focusing on foundational marketing capabilities benefit from nearly 10% higher growth rates than competitors.*

To be competitive within your industry for foundational marketing capabilities, it’d be good to first know where your industry falls.

Take a look at this white paper showing findings when we reviewed the 43,000 first-time respondents of the Marketing Excellence Survey database.

Some highlights:

• Overall:
  • Foundational Marketing Knowledge: Retail and automobile industries scored lowest with below average scores; energy, transportation and utilities scored the highest.
  • Foundational Marketing Attitudes (e.g. customer orientation): Automobile again scored lowest with a below average score; transportation and metals/mining scored the highest.

• Competitor Orientation: Banking scored the lowest for competitor orientation – particularly concerning considering that a current uniformity in technology makes it critical to use competitive intelligence to differentiate.

• Market Analysis: Construction/engineering was lowest for market analysis which would affect their ability to analyze customer needs and measure their satisfaction, activities important for winning with a sophisticated buyer.

Conclusion:

If you’re in one of the lowest scoring industries, take the opportunity to gain a strategic advantage by adopting a marketing talent strategy focused on foundational competencies.

If you’re in one of the highest scoring industries, the bar has been set high …it’d be a good idea to assess the marketing competencies of your organization to ensure you are competing with the best of them.

MLC members, for a deeper dive into latest industry findings for foundational marketing capabilities, join us for a webinar on 2/24 at 2pm ET.  We’ll share key learnings from the MES database of 65,000 for specific industries, functions and geographies to provide you with a benchmark for gaining a competitive advantage.

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In CEB View’s last Talent Matters post we discussed how difficult it is to work for a bad boss. But what if, instead of working for one, you are one?

Of course it’s not easy being the boss. Research from CEB’s CLC Human Resources program shows that the three areas that most managers – even great ones – struggle with are evaluating employee performance, providing effective feedback, and turning around underperformance. These are hard things to do and because the way you do them directly affects your team, any missteps are likely to create friction.

Fortunately, the recession seems to have improved many employee-manager relationships but boss-bashing is still a favorite pastime (as proved by last week’s traffic on the first “bad boss” piece). So, how do you know if your employees are just letting off steam or if you are truly difficult to work with? Unfortunately, many bad bosses are the last to know how awful they are to work under. This may be because you aren’t getting the feedback you need, you’re disconnected from your employees or you just aren’t watching out for the signs.

Here are five indications that you may be a worse boss than you thought:

1. Meetings happen without you: If you notice that your employees are getting together to talk about work and not including you, there may be a problem. When employees don’t believe a manager is competent or cares about their work, they are likely to find ways to work around him.
2. Problems blow up before you hear about them: Employees feel comfortable going to good bosses when there is a conflict or an issue because they don’t fear retribution. If you haven’t signaled that you are a partner in solving problems, or worse that you will punish people who bring them to you, you are going to be the last to hear when something negative happens. This greatly hinders your ability to handle problems early on before they become disasters.
3. You don’t know what your employees care about or enjoy doing: What motivates employees is not the same across the board. To inspire your people to go above and beyond, you have to get to know them through open and honest conversations. Struggling managers are often too consumed with themselves to learn more about their people.
4. Your people don’t know where they stand: If you are one of those bosses that complain that your employees are insecure and always asking for your input or approval, ask yourself why they might be behaving that way. All people need effective feedback to do their jobs well. Good bosses don’t hesitate or neglect to tell employees whether they are performing well. Leaving your people in the dark will only lead to disengagement and confusion about what you want them to do.
5. No one disagrees with you: Sometimes the worst bosses just assume everything is going well. They don’t hear about any problems and everyone seems to agree with every brilliant idea they have. It may be less that you are a genius and more that they are terrified of you. Open disagreement is a sign of a healthy and innovative work environment. If everyone is standing around nodding, it’s time to take a hard look at your leadership.

What To Do If It’s You

If you recognize any of these signs in yourself or have come up with a few of your own, don’t despair. Even the worst boss is capable of change. Here are some things you can do to begin the process:

• Ask for feedback: Good bosses are open to and regularly ask for feedback. Your first step should be to ask people for input on how you manage. If you’ve signaled in the past that you are not open to hearing people’s honest opinions, you will need to make clear that you are trying to change your ways and that you intend to use their input not to punish them but to inform your own development. It may be possible even with a mea culpa, that your people won’t tell you what you need to hear. In these cases, it might be helpful to hire an executive coach who can gather feedback to share anonymously with you. Be prepared — you may hear some nasty things about yourself. Listen to what people have to say before you respond. While it may sting, negative feedback is just as useful as compliments.
• Make a visible commitment to change. Research shows that those who go public with their goals are much more likely to succeed. Don’t keep your resolution to yourself. Explain to your team that you are working on becoming a better boss and exactly what that means. Are you going to start giving regular feedback to employees so they know where you stand? Are you going to hold “office hours” so employees feel comfortable talking to you about work problems as they arise? Tell them what success will look like for you and ask them to keep you accountable.
• Request help. This can often be the hardest part for bosses. It’s one thing to admit you’re underperforming, it’s another to ask for support from others. Think about what you need to change your behavior — training on how to assess employee performance, coaching on how to have difficult conversations, regular check-ins with your boss — and figure how who can best provide that —your peers, your boss or an internal or external coach. Sustaining change can be especially difficult so enlist a few people to tell you when you’ve gotten off track. Be sure to pick those who are willing to tell you the truth.

MLC Members, check out our Talent Management Topic Center for our best tools and insights on increasing marketer performance and engagement.

Movement Towards the Center: Nearly half of members (48%) report control over marketing strategy has become more centralized in the last three years versus just 30% who say it has become more decentralized.  Furthermore, more than twice as many members house control over marketing strategy at the central level than at the regional level (32% vs. 14%), though a 52% majority says strategic power rests in both places.

Optimizing Global Marketing Spend: A clear majority of members (68%) allocate global marketing budget based on strategic opportunities such as growth – more than twice the 28% who parse it out based on revenue or profit generated by each region.

Challenging Times: We asked members to rate the changing importance of several issues related to global marketing such as global best practice sharing, talent development, and consistent global strategy.  Overwhelmingly, survey takers indicated these issues were more important than ever.  At the same time, when asked to rate their organization’s effectiveness at each challenge, most indicated low to medium skill.

Other interesting findings included:

• Branding was the marketing responsibility most apt to be placed exclusively under Central Marketing’s control, while pricing was most likely to be left to the regions.
• Public Relations and Digital/Social were the marketing services most likely to be housed at Central Marketing and shared/scaled across multiple business units or regions.
• When working with agencies, the trend is towards fewer, bigger partners with global reach vs. a larger number of local agencies with local market expertise.

MLC members, to check out the full survey results, click here.  And read more about our work on global marketing organizational structure on our Work in Progress page.  More resources and tools will be up early next year!

Given this, it is not surprising that communication is one of the most frequently cited challenges in our member conversations about structuring and operating a global marketing organization.  The problem exists both between Central Marketing and regional divisions and amongst the divisions themselves.

As Erin mentioned last week, global org structure is all about tradeoffs – many of them focused on how centralized or decentralized control over marketing strategy should be.  With each org structure decision comes a unique communications challenge:

• In a Centralized structure, the CMO directs all global units in top-down fashion, optimizing for global consistency in strategy, brand, and messaging.  A big communications challenge here is the lack of a strong bottom-up flow to share local insight and adapt to local complexities.  Additionally, even when regions do have a robust pipeline up to corporate, they rarely talk amongst themselves and best practices are lost.
• In a Decentralized structure, divisional/regional autonomy allows for great flexibility and customization of both strategy and messaging.  While local insight is more easily accommodated, there can be weak communication and coordination at the higher global level, leading to off-brand messaging and inconsistent execution across regions.  Additionally, a lack of sharing between regions results in duplicative efforts.

Many companies try to fix communications problems by drawing dotted lines between every division head and regional head in their org structure.   The result a convoluted systems of dots and dashes and it generally has the nasty side-effect of complicating decision-making and bogging down speed-to-market.  Most of the literature on modern organizational structure argues that simpler is better and advocates organizing for faster decision-making or to reduce ambiguity.  In both cases, organizational complexity (which dotted lines invariably add) gets a big thumbs down.

The better communications fixes come in the form of process and system improvements.  Despite the time zone, language, and cultural barriers, frequent tele- and video-conferences are noted by members as critical tools in global marketing.  Technology can also lend an assist in this arena.  There are several online collaboration tools for everything from sharing documents to project management to facilitating radical innovation.  If designed correctly, intra-company social networks can also work.  Ultimately, communication and collaboration must be embedded in corporate culture.

MLC Members – More on the communications challenges faced by global marketing organizations and some ideas to address them are coming soon, but for now, check out MLC’s Internal Communications Toolkit.

Tell us more about how your global marketing organization is structured by taking this short 5 minute survey.

By Erin Lynch-Klarup

Opportunities in developing economies are attracting a lot of interest across our membership these days.  Thanks to growth in emerging markets and slowdowns in the US, Europe and Japan, a number of folks we’ve spoken with are expanding their international growth goals.

This focus on markets that were previously on the back burner has triggered questions about how to best organize marketing internationally.  Our conversations with members have revealed a few key tensions every company’s global marketing structure needs to balance:

1. Local Customization vs. Global Consistency: Vesting decision-making power with regional marketing teams through a decentralized org structure allows for greater customization and responsiveness to local conditions.  However this structure can lead to inconsistent branding and variable Marketing quality across regions, as well as unnecessary rework.
2. Budgeting: Global Prioritization vs. Local Accountability: Central budgeting has the benefit of enabling big bets on the best new opportunities.  Alternatively, allocating budget regionally allows for profit and loss accountability at the regional level.  Many companies have opted for accountability in the past, but with greater interest in emerging markets, global investment optimization is becoming a higher priority.
3. Flexibility vs. Continuity & Expertise: Most organizations need some amount of flexibility to respond to new priorities and changing strategies.  At the extreme, a project-based organization is structured around teams that form and dissolve according to shifting priorities.  However, more staid structures with continuity of roles and responsibilities allow for in-depth organization knowledge and expertise.
4. Collaborative Decision Making vs. Organizational Simplicity: A matrix structure with dual or dotted line reporting keeps multiple stakeholders involved in decisions – for better or for worse.  Organizations need to be sure that the benefits of each additional reporting line aren’t outweighed by the loss of agility and costs of coordination.

MLC members, for more on organization structure, check out our archetype org structures and other resources.

As we talk to heads of Sales, Marketing and Communications about 2011, I see a swing back to handling a common enemy – this time, ongoing uncertainty.  Uncertainty isn’t terribly attractive to most, but executives seem to be accepting it as part of the new normal and are trying to figure out ways to live alongside it.  That presents a little differently depending on your role in the organization.

• In Sales for example, the problem is that deals are getting “stuck” with customers whose response to uncertainty is indecision. But it looks like most sales teams aren’t doing enough to make deals easy for customers, abandoning them prematurely in the sales cycle.

• For marketers, the challenge lies in figuring out – and then using to their advantage – changes in the way customers think about purchasing (triggered by the uncertainty customers face).  Coping mechanisms like in-the-moment comparison and peer feedback are driving psychology few companies fully understand, but must.

• Communicators are trying to help their organizations deal with uncertainty.  Specifically, as companies try to become more agile and responsive, the premium on moving information and aligning the organization increases.  But those are new-ish areas to most Communications teams.

How is uncertainty affecting you and your organization?  What are you planning to do about it?  Our research makes it clear that early movers in moments like this stand to gain disproportionately. I hope you’re one of them.

By Erin Lynch-Klarup

MLC recently kicked off a project on structuring global marketing organizations.  Over the next few months, our research aims to benchmark members’ current organization structures, and also to provide guidance on ways to overcome common structural challenges and trade-offs.

Getting up to speed on the literature around this topic, I’ve run into a range of takes on organizational structure.  These seem to generally fall into three categories:

1. Organizing around an element of strategy.

In one camp, there’s literature on optimizing organization structure to elements of a company’s strategy.  For instance, organizing Marketing to reflect a long term customer relationship focus, or organizing to quickly surface and act on emerging opportunities.

1. Organizing with consideration to environmental factors.

Alternatively some authors focus on optimizing organization structure with respect to environmental factors (which naturally should play into strategy – but it’s a different starting point).  One recent article speculates that organizational structure will be most effective when it is optimized to local employees’ cultural values.  For example, a culture that values wealth accumulation might do better with a layered structure that allows for frequent promotion.

1. Organizing for efficient processes.

Finally, some intriguing recent articles advocate organizing around process-oriented objectives.  For instance, organizing for faster, better decisions by identifying key decisions and aligning structure, responsibility and authority with these.  Or similarly, organizing to reduce day-to-day ambiguity employees face, by simplifying structure, clarifying responsibility, and relying on skilled employees to coordinate outside of reporting lines.

All of these perspectives seem to have merit, and certainly no one excludes another.  However, I find myself wondering how far structure will take us in a global marketing organization.  It’s not hard to imagine that fixing a structure which actively contradicts elements of the company’s strategy, environment or process would improve outcomes.  But perhaps structural fixes are more likely to get a company from poor to decent outcomes, not decent to good – in which case efforts to optimize global organizations should be focused beyond the structure.

MLC members, are you interested in participating in our research on structuring global marketing organizations?  If so, I’d love to schedule a 30 minute phone call to learn about your experience and challenges.  Email me at elynchklarup@executiveboard.com to schedule a call.

As anyone who keeps track of these things knows, a strongly disproportionate number of these memes emanate from the bowels of an online community called 4chan (NSFW). 4chan distinguishes itself from other web forums and social platforms by allowing its users total anonymity – no real names, screen names, or other identifying details necessary. The result is about what you’d expect – a whole lot of nonsense, offensiveness, and even illegality; but sometimes, the chaos of 4chan results in cultural phenomena like rickrolling or lolcats.

After years of anonymity, 4chan’s founder and administrator Christopher Poole has emerged to give his take on why his community has been as dynamic and innovative as it has. He credits the site’s insistence on an option for total anonymity in giving space for his users to make mistakes. In this case, “making mistakes” usually means “failing to be funny” – but the point stands. From the Technology Review piece:

Consider, Poole explains, how the fixed identities in other online communities can stifle creativity: where usernames are required (whether real or pseudonymous), a new user who posts a few failed attempts at humor will soon find other users associating that name with failure. “Even if you’re posting gold by day eight,” says Poole, “they’ll be like, ‘Oh, this guy sucks.’ ” Names, in other words, make failure costly, thus discouraging even the attempt to succeed.

It’s a key insight: freedom to fail is an essential element of innovation. The best way to bring new value to your customers is experimentation and acceptance of failure.

4chan’s innovation model – to the extent they can be said to have one – is simple. Allow open – fully open, not corporate “open” – dialogue, remove or mitigate the fear of failure, and add in enough critical mass to keep the ideas flowing.

This is one half of a big dilemma for marketers. To promote innovation, do you embrace an open, sometimes chaotic process? Or do you pick a great team, focus it on narrow goals, and guide the process step-by-step until you have an innovative output?

For a lot of reasons, most importantly because online communication has allowed chaotic discussions to scale to the point where they can produce concrete results, I tend to side with the open model. But opinions – and experiences – abound. For those that have led innovation efforts within your organization – what approach worked best for you?

MLC members, for more on how to keep the fresh ideas flowing at your organization, please consider attending one of our upcoming innovation breakfasts. On September 22, we’ll be in St. Paul, MN, touring 3M’s innovation center; on December 2, we’ll be visiting Microsoft’s innovation center in Seattle, WA.

The question is- can you afford not to invest in training your marketers?

These are the people that are developing your strategic marketing plans, writing messaging that meets your target market needs, choosing the initiatives that will have the best ROI while meeting your brand goals, and so much more.  It is more than a little unnerving to know that while they handle such critical tasks, 2/3rds of them actually don’t have a marketing background, as shown in a survey of 65,000 marketers by the Marketing Excellence Survey.

The survey results showed that most marketers, despite having low levels of marketing knowledge, rated their knowledge and use of marketing concepts as high.  This means that they are running forward fast with your brand’s future in their hands without a compass or a map.

We did a study to see if marketing training drives a measurable increase in productivity.  Our research showed that a focus on training positively influenced the effort that the marketers put into their jobs above and beyond what was expected or required of them.  In addition, in assessing the marketing knowledge of hundreds of companies over the last 12 years, we’ve seen a positive impact between a company’s level of marketing knowledge and their sales performance.

Basically, your investment in this area is one of the smartest moves you can make as a marketing executive to leverage your marketers and be the most competitive in market.

So now you have a challenge.  Training is critical, but you don’t have loads of money in your budget to be guessing at the most effective approach.

Here is my advice – make the most of your investment by first using an assessment to diagnose the knowledge gaps in your marketing organization.  An assessment will have you save time and money by allowing you to determine what knowledge gaps exist and the depth of content needed, establish baseline metrics, and rule out those areas that you don’t need to focus on.  It will also provide managers with a roadmap for developing their teams.

MLC’s assessment, the Marketing Excellence Survey, allows marketing leaders to benchmark their teams across key areas such as marketing mix strategies, marketing analysis and profitability, both internally based on key demographics and externally against a database of 65,000 other marketing professionals. The Marketing Excellence Survey also provides targeted on-line training modules that address the knowledge gaps identified for your organization during the survey assessment.

Investing in your marketers could be your fastest path to a competitive brand.  Current economic conditions require your marketers to play a key role in driving your business, and it’s up to you to make sure they are prepared for the task.

MLC members, for more on training, please visit our Talent Management topic center, and learn how Unilever, Microsoft, and 3M leveraged training to boost business outcomes across the board.

Questions about organization structure are very popular in our recently-launched Marketing Org & Ops Forum, where one executive question asks, “What type of communications get what type of approval?”

Based on member responses, much of the approval process is typically based on budget and risk.  This comes as little surprise—the CMO probably ought to sign off on that Superbowl ad.  Legal probably ought to review that spot making comparative claims against named competitors.

Some members have rightly targeted approval queue “dead time” for streamlining.  We’ve seen cases where marketers can remove weeks of cycle time to complete a campaign by moving their approval process online and establishing escalation criteria that kick in when creative sits on an approver’s doorstep for more than 24 hours.  These sound like small ideas, but they add up.  Time is money.

Read through member verbatim on the Q&A forum here.  If you’re interested in approval streamlining, take a look at how one CPG company applied lean principles to cut its print labor costs by over 45%.

Running a commercial organization is hard – no one denies that. How do we come up with a unique value proposition that will resonate with customers? How do we coach our reps to become commercial teachers? How do we keep our employees focused on their jobs now that the fourth season of Mad Men is on?

But you would think that one of the easier parts of running a commercial organization would be knowing who owns what tasks. You put Employee #1 in charge of voice of the customer, Employee #2 in charge of sales support, Employee #3 in charge of customer portfolio management, and you take care of commercial strategy. Sounds simple enough, right?

Actually, no. The results from MLC’s Commercial Integration Diagnostic show that:

• 67% of companies don’t know who is in charge of Voice of the Customer
• 63% don’t know who is in charge of Commercial Strategy
• 64% don’t know who is in charge of Customer Portfolio Management
• 54% don’t know who is in charge of Customer Segmentation
• 50% don’t know who is in charge of Customer Experience Management.

The only attribute where everyone agrees on ownership? Sales productivity.

As you would expect, if you don’t know who is in charge of an activity, it becomes very hard to succeed at it. When we divided the survey population into two groups – those who knew who owned an attribute and those who didn’t, there was a clear correlation between clarity of ownership and effectiveness at the given activity. Indeed, even if the group agreed that an attribute was very important, the organization found it hard to succeed with that attribute unless they also knew who owned it.

That relationship makes our last finding even scarier: there is a close relationship between how important an attribute is to the success of the organization and whether there is clarity of ownership, and it isn’t what you’d hope. The more important an attribute is, the MORE likely it is that the organization is unsure who is in charge.

Let’s look at the graph above again.  The top five attributes with lack of clarity around ownership are voice of the customer, commercial strategy, customer portfolio management and customer segmentation (we exclude channel management because many participants did not deal with channel partners). The bottom five are sales productivity, customer-focused sales process, role design, brand development, and coaching. Excluding brand development, the top five were universally agreed to be more important than the bottom five. Would you rather have clarity of ownership around commercial strategy or role design?

The problem here isn’t necessarily that companies haven’t assigned ownership, it’s that they’re not communicating that ownership effectively to the organization as a whole. Many of the CMOs we spoke to could immediately identify who they had put in charge of each attribute, but they hadn’t communicated those ownership decisions to their teams.

Of course, in the hurly burly whirl of implementing a plan, things can change, and ownership of attributes may transition over time as the needs of various projects change. But making sure that you are clearly communicating ownership decisions, and making one person accountable for each attribute (so the organization at least knows who is generally in charge) can go a long way towards resolving ownership uncertainty in your organization.

MLC members, contact your account manager to take the Commercial Integration Diagnostic and find out what ownership looks like in your company.