3 Strategies to Avert a Marketing Restructuring

3 Strategies to Avert a Marketing Restructuring

Just utter the words “marketing restructuring” and marketers start to quiver. No doubt about it, marketing reinventions are hugely disruptive. Instead of inspiring visions of increased efficiency, effectiveness and positive change, restructurings generate distrust, anxiety and often work paralysis. Worse, they shift our focus away from serving customers toward “fixing” our internal affairs. While a restructuring of your marketing organization may be warranted, there are less disruptive ways to ensure you’re getting the greatest bang from your marketing investment.

Why Restructure?

A marketing reinvention can be prompted by a number of factors. The reasons generally fall into four categories: model, market, management or metrics (or a combination of the four).

  • Change in Model:  Some marketing reinventions occur following an acquisition, divestiture, spin-off or IPO. In this scenario, the organizational model has radically changed, and marketing needs to adjust (up or down) as well.
  • Change in Market:  Others reinventions are sparked by a fluctuation in business or market conditions. A sharp decline in revenue, a competitive advance, entry of a new market player, a technology disruption – each can necessitate a marketing organizational change.
  • Change in Management:  A management change can also prompt a marketing reinvention, especially if the new chief is brought in from the outside. A new leader brings a fresh set of eyes, perhaps a new vision for the company’s brand, a view on the value and role of marketing, a trusted cadre of strategic agencies and, likely, a change mandate from their boss. (After all, they were brought in for a reason.)
  • Change in Metrics:  The fourth trigger for marketing reinventions is misaligned metrics. The reigning marketing leader may be focused on brand awareness, marketing effectiveness and customer experience and has built their team and allocated budgets accordingly. Senior management, on the other hand, may now expect marketing to drive incremental revenue, share of wallet and customer advocacy. This usually requires a reset of marketing’s priorities and a redistribution of people and budgets.

Regardless of the impetus, the reality is this:

There will always be a change in model, market, management and metrics.

The question should be:

How can marketing leaders prepare for and, better yet, avert the next crisis du jour?

Increasing the Odds of Reinvention Success

I’ve personally experienced a large number of marketing reinventions over my career (12 by last count). I was at the forefront leading the charge of some… and on the receiving end bearing the brunt of others. The successful reinventions resulted in more focused marketing messages, better integrated programs and organizations that became more effective, aligned and inspired. The unsuccessful reinventions resulted in a disengaged and disempowered marketing community. From these experiences, I learned three valuable lessons.

Lesson 1: Transform or be transformed

I’m actually a huge proponent of change. It’s just that I prefer the continuous improvement variety over the episodic bring-in-the-consultants change initiatives that seem so prevalent. Continuous improvement requires discipline as well as an enlightened leader pushing the boundaries of marketing excellence. The enlightened leader takes to heart what the sage Jack Welch said: “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.”

The enlightened marketing leader knows that the best reinventions are self-imposed, not other-imposed. They change the rules before someone else does. They know that they really only have two choices: to transform or to be transformed. And they act accordingly.

They bring in outside talent in areas where the organization has gaps or needs to expand to stay relevant. It could be new marketing vehicles, new customer sets or new marketing technologies. The enlightened marketing leader also has a handful of continuous improvement initiatives underway at all times, putting them in the driver’s seat.

Lesson 2: Build a flexible marketing foundation

Despite Peter Drucker’s assertion that “marketing and innovation produce results; all the rest are costs,” the more commonly-held view is that marketing is a cost center versus a revenue center. When marketing is viewed as a support organization, it becomes difficult to push back and say “no” to internal customers. What happens? The marketing organization becomes stretched to the point of breaking. Response times begin to decline, quality starts to slip, ROI becomes fuzzy, costs escalate, deadlines come and go. The answer is not adding more marketing resources – though that’s often the first reaction. The better solution is building a more “flex-able” marketing organization.

A flexible marketing organization is agile (moves quickly and easily), lean (no superfluous fat), effective (gets the right things done), accountable (responsive and responsible), and adaptive (embraces change). I talk more about the key principles, levers, rules and tools of a flexible marketing organization in my workshops, presentations and writings.

Lesson 3: Keep a vigilant eye on four key levers (people, programs, budgets, agencies)

Let me share with you one of my marketing reinvention experiences. This is one where I was asked to lead the transformation and deliver cost reductions from across our businesses and geographies ($172 million within 6 months to be exact). At the time, our company was experiencing a significant drop in sales caused by the arrival of new technologies and competitors (see “change in market” above). All marketing groups were asked to reduce their budgets by 30% to align with the declining sales forecast without affecting the current sales pipeline.

Many of the marketing leaders reported they would have to cut their demand generation programs to comply with the budget reduction. Needless to say, that was not the budget tradeoff decision management was looking for. What we uncovered was that the majority of our program budgets were “contractually obligated” under multi-year sponsorships, agency retainers, long-term contracts, ongoing consulting engagements, legacy marketing infrastructure, internal charge-backs, and contract labor. The only variable portion of our marketing budgets was the quarterly revenue-generating demand generation programs – ouch. We knew things had to change moving forward. And they did.

Keeping tight rein on four levers – people, programs, budgets and agencies – allows marketing leaders to more easily adjust to changing business dynamics and stay ahead of the reinvention curve. In each of these areas, the goal should be to minimize fixed costs (procurement should be your best friend), and to maximize variable or flexible spend. Don’t wait until the levers are out-of-sync to take action.

Adopting a continuous improvement mindset, building a flexible marketing capability and keeping a keen eye on people-programs-budgets-agencies can help preempt the need for a major reinvention initiative. When your company does experience a leadership change, an acquisition or spin off, a competitive advance or market fluctuation, you’ll be able to make the needed changes quickly while staying focused on producing brilliant marketing that engages customers.

How do you stay ahead of the marketing reinvention curve? I’d love to hear your reinvention success stories – as well as lessons learned – in the comments.

 

Image credit: Retrostar — Fotolia.com

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Engelina

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