One of the most frequently debated topics in management circles is organizational structure. In many firms, org structure is a constantly swinging pendulum, shifting back and forth between varying degrees of centralization and decentralization. Is one approach better than another?
A report I recently published at Aite Group, based on a study of marketers conducted by Epsilon, identified high-performing integrated marketers — firms that have achieved a 10% or greater lift in their marketing performance as a result of their integrated marketing efforts. Of the four characteristics that distinguished the high-performers, not one of them involved org structure.
My take: Organizational structure doesn’t matter. Every approach to structure has its strengths and drawbacks. What matters is whether or not a firm recognizes — and compensates for — those weaknesses.
Among survey respondents, 70% of marketing departments are centralized — that is, one person controls both the online and offline marketing budgets. And among these centralized organizations, 68% believe that they’re properly structured to execute integrated marketing campaigns. On the other side of the coin, however, 64% of firms with a decentralized approach to channel budgets also believe that they are properly structured.
There isn’t, however, any correlation between high-performance and organizational structure. Among centralized firms, 40% are high-performers — the same percentage of decentralized firms that have achieved a 10%+ lift from integrated marketing.
Comparing centralized and decentralized marketing organizations yields very little differences in terms of their abilities to make use of customer data. But firms that believe that they’ve properly organized to execute cross-channel marketing — regardless of whether or not they’re centralized or decentralized — are far more likely than other firms to make effective use of customer data.
Of those that say they’re properly structured to deliver integrated marketing, nearly all have processes in place to ensure good data hygiene. And the overwhelming majority say that customer data is easily accessible for marketing efforts within and across lines of business, and that their firm’s employees have a good understanding of what customer data they have.
The analysis helps confirm my belief that any approach to organizational structure can succeed as long as there are processes and mechanisms for overcoming its shortcomings. High-performing integrated marketers have re-allocated budgets from acquisition to retention, and from offline to online channels, in the past few years.
Bottom line: Successful firms find ways to do what’s right for the bottom line — regardless of their organizational structure.
UPDATE: For a PDF version of this that includes graphics with survey results, click here.
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