The Link Between Organizational Structure and Revenue Growth

October 31, 2017

By Kerry Breen, senior manager, marketing knowledge center at ANA

ANA

 

Earlier this month, the ANA released its second research study on Marketing Organization in two years. The new Organizational Structure study reveals a link between organizational structures and revenue growth. According to the research findings, brands with networked structures that have cross-functional teams, as opposed to top-down silos, are more likely to see a 6 percent increase in revenue. These companies have some characteristics in common:

  • A clear understanding of customers or clients
  • Structures based on customer needs rather than internal functions or products
  • In-house agencies used for marketing/advertising strategy and account management
  • Investment in staffing and talent

However, there is no a one-size-fits-all structure. According to Larry Light, CEO at Arcature and former global CMO at McDonald's, "Depending on the organization, the structure will be different. But the key is, if you want enterprise-wide adherence to a customer-focused objective, then you have to have integrated marketing. Integrated marketing is bigger than just integrating marketing communications, which is how it's been defined."

According to the research report, more than one third of study respondents said their teams do not have the right structures in place to help their companies achieve growth.

 

Some brands have begun managing costs by changing the way they work with agencies. Two-thirds of study respondents began using in-house agencies during the past few years, and brands that use a combination of in-house and external agencies are more likely to see growth than their counterparts that only use external agencies. They also have the added benefit of leveraging existing skills and expertise.

From interviews conducted for the research, we found that restructuring has to go beyond updating an organizational chart. Unless there are shifts in thinking and culture, it won't work.

  • Change Your Thinking. "Thinking sits at the very foundation of everything an organization does," says Christopher Brace, founder and CEO of Syntegrate Consulting. "The organization shapes itself around that thinking. So, if things for the organization are not working, reorganizing the structure or changing your processes, saying that you need a new agency partner or a new campaign, none of that is going to fix it if the thinking isn't right."
  • Change Your Culture. The right culture for marketing is customer-focused with marketers held accountable to shared metrics, such as customer satisfaction, quality, and the customer experience.
  • Change Your Structure. Only when leadership has instilled the right kind of thinking and culture can the structure change. Jim Speros, former EVP of corporate communications at Fidelity Investments, says, "Today's marketing organization must be highly attuned to customer needs and trends and be able to react quickly. Speed, agility, creativity, and comfort with data and analytics are must-haves for any marketing organization that is valued by its management."

 

Five Ways Brands Can Begin Organizing for Growth

  1. Own and manage the touchpoints. The marketing team needs to know about, understand, and have the ability to manage all of the high-impact touchpoints that form the customer experience.
  2. Embrace data. The only way to gain a deep understanding of the customer journey is through data. Marketing needs to own customer data and constantly turn it into insights.
  3. Acquire the skills. Marketing organizations need to assess their skills and make plans to fill critical talent gaps.
  4. Balance agency resources. Using a combination of in-house and external agencies is linked to growth and protects brands from reliance on just one type of agency.
  5. Have patience. Meaningful organizational change is a journey, often a long one that involves changing the way the organization thinks, the attitudes of team members, and the culture.

 

To read key findings from the research and learn more about marketing organizational structures across the industry, visit the Marketing Organizational Structure Solutions Set.


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