The Strategic Management Maturity Model

 

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Four-Stage Model of Operation and Competitiveness

 

Service firms that have reinvented themselves to sustain their leadership position have shared a common approach; like successful manufacturing firms they have structured their operations according to a four-stage model of competitiveness, where they have applied manufacturing strategy concepts, focus and integration as they moved from lower to higher stages.

After Four Stages of the Hayes and Wheelwright Model

Stage 1: Internal Neutrality - Fix the Worst Problems

This is the stage at which the operations function is attempting to reach a certain minimum standard and is generally considered to be at the very poorest level of contribution by the operations function. The other business functions view it as a hindrance when it comes to the delivery of competitive advantage. Its goal at this stage is to be largely ignored, focusing on avoiding mistakes, it tends to be reactive and somewhat in-ward looking.

Stage 2: External Neutrality - Adopt Best Practice

Here as a first step of breaking out of stage 1 the operations function must compare its performance with competitor organisations. Bench-marking its performance against its competitors will enable the business to identify and adopt best industry practice. The operations function can then attempt to be externally neutral by trying to match the benchmarks it has identified. 

Bench-marking promotes superior performance by providing an organised framework through which organisations learn how the "best in class" do things, understand how these best practices differ from their own, and implement change to close the gap, the essence of bench-marking is the process of borrowing ideas and adapting them to gain competitive advantage (Besterfield et al., 2003).

Stage 3: Internally Supportive - Link Strategy with Operations

In reaching stage 3 the business operations will be broadly up there with the best having reached the ‘first division’ in their market and by linking strategy with operations, they will have aspirations to continue to improve in order to become clearly and unambiguously the very best in the market. 

Stage 4: Externally Supportive - Give an Operations Advantage

At stage 4 the company will be looking to the future, the vision for the operations function at this stage will be to provide the foundation for future competitive success by taking a lead role in strategy formulation. Over time it will develop operations-based capabilities by organising resources in innovative ways and deliver strategic flexibility which will allow the business to adapt as markets change.

Starting at Stage 1 a review of the internal processes will allow managers to set minimum performance standards for the operations function of their business. Moving to a higher stage to regain competitive advantage in their local market, bench-marking with immediate competitors will allow them to identify and adopt best practise. It will also enable them as process managers to implement strategies to increase service, operations and process capacity within their business. With these industry and competitive analysis in mind they can set out to carve a distinctive strategic position where they can outperform their rivals by building competitive advantage.

Author: Nigel Chetty | MBA https://cutt.ly/N9SrPFb

Capability and Maturity

Hayes and Wheelwright describe four stages of manufacturing competitiveness:

Stage I

Stage I companies consider their manufacturing organisation to be internally neutral, in that its role is simply to "make the stuff", without any surprises. Such companies believe that their product designs are so unusual or their marketing organisation so powerful that if the product can simply be delivered to customers, as advertised, the company will be successful.

 

Stage II

Stage II companies look outward and ask their manufacturing organisation to be externally neutral, that is, able to meet the standards imposed by their major competitors. Such companies tend to adhere to industry practice and industry standards. They buy their parts, materials and production equipment from the same suppliers that their competitors use, follow similar approaches to quality and inventory control, establish similar relationships with their workforce, and regard technicians and managers as interchangeable parts - hiring both, as needed, from other companies in the industry.

 

Stage III

Stage III companies have a manufacturing organisation that is internally supportive of other parts of the company, with a co-ordinated set of manufacturing structural and infrastructural decisions tailored to their specific competitive strategy.

 

Stage IV

Stage IV companies regard their manufacturing organisation as externally supportive, that is, playing a key role in helping the whole company achieve an edge over its competitors. Such companies are not content simply to copy their competitors, or even to be the "toughest kid on the block" in their own neighbourhood. They seek to be as good as anybody in the world at the things they have chosen to be good at - that is, world-class.

 

References

• Hayes, Robert H., and Wheelwright, Steven C., "Restoring Our Competitive Edge: Competing Through Manufacturing". New York: John Wiley, 1984.

Making collaboration across functions a reality

By Ruben Schaubroeck, Felicita Holsztejn Tarczewski, and Rob Theunissen

Fast-changing global markets put a premium on simplifying processes radically and breaking through silos.

Companies have long struggled to break down silos and boost cross-functional collaboration—but the challenge is getting more acute. The speed of market change requires a more rapid adaptation of products and services, while customers increasingly expect an organization to present them with a single face. Even well-established multinationals routinely fail to manage operations end to end.1 The result: interactions with customers are sluggish; complex, customized products are hard to create on time and on budget; and blocked lines of communication make new sales and distribution channels difficult to navigate.

The basic principles for improving performance—imposing stretch targets from the center, empowering cross-functional teams, standardizing processes, tightening up execution—are mostly familiar. But making these things happen is a different matter. In many companies, ownership of processes and information is fragmented and zealously guarded, roles are designed around parochial requirements, and the resulting internal complexity hinders sorely needed cross-business collaboration. What’s more, in our experience, companies that apply traditional solutions (such as lean and business-process reengineering) either exhaust their managers with efforts to rework every process across business units or, by contrast, focus too narrowly within functions.

Our observations of 25 companies in a wide range of industries in Europe, Asia, and North America have led us to conclude that perspiration is as important as inspiration in addressing these challenges. Here’s the story of how two companies launched new approaches successfully. One needed to focus narrowly to fix a critical process that compromised its core business. The other, swamped by the complexity of its processes, required a broad-based transformation.

Resetting targets

Executives at a communications-services company were initially puzzled by feedback showing that only 65 percent of its customers got a working connection when they first attempted to use a new premium fiber-optic product. After all, the functions responsible for the various parts of the process—the sales, back-office, operations, and logistics teams—had received scores of more than 90 percent in an earlier survey to assess their ability to “get things right first time.”

On closer inspection, executives discovered that field engineers, under pressure to meet new orders, had cut down on the time they spent with customers during installation, prompting a flood of requests for help to call centers. Back-office staff, meanwhile, were struggling to cope with incomplete and often incorrect orders submitted by the sales team. More fundamentally, collaboration was weak and incentives were misaligned. Sales and marketing, for example, rarely discussed how they could work with field engineers (or vice versa) to address problems. Meeting the needs of customers wasn’t included in individual or functional performance targets.

The company responded by setting several breakthrough targets aimed at uniting different teams and pushing them beyond their usual work practices and patterns. One target, for the sales and field-engineering teams, was to halve the number of requests for help to the call center following new installations.

At the same time, the company established new cross-functional teams charged with controlling the installation process from initial order to after-sales service. As a result, teams that traditionally had separate workflows and little shared responsibility were forced out of their comfort zones. The cross-functional representatives convened every week to review how well they did on a set of cross-functional key performance indicators and to generate further ideas for improvement. These meetings provided an opportunity to choose the high-payoff areas for execution—it was clear, for instance, that engineers should spend additional time in the field educating customers (at their premises) about successful connection procedures. Senior leaders reinforced accountability by assigning a strong manager to coordinate the process end to end.

The impact of this cross-functional collaboration has been tangible: first-time-right delivery has increased to over 80 percent (from 65 percent), customer satisfaction is up, and the number of requests for help to the call center during the first six weeks after installation dropped by one-third, with a commensurate reduction in costs. The leadership concluded that focusing on the way a single process broke down across functions, rather than following the initial impulse to have each of them address a range of process issues, generated a better solution, with far less stress on management resources.

Rethinking processes and roles

After steady performance declines in key business areas, the reconstituted board and new CEO of a global industrial company realized that internal complexity was hampering its reputation for innovation. Sixty businesses, each with its own P&L, often devised or maintained their own fairly similar processes, sometimes even lauded internally as marks of innovation. “We were like the UN without translators,” one executive noted, “with different language and terminology describing nearly every process.” In one division, half of the job titles in a commercial function were unique to a single person, making it hard to share information and thwarting potential economies of scale and the transfer of skills across businesses units. Different ones often swarmed clients with different and uncoordinated approaches; for example, each sales team pursued customers with separate promotional materials and financing arrangements. Atomized processes led to fragmented IT architectures, which allowed only a limited sharing of production or customer data.

The company’s leaders concluded that squeezing marginal improvements out of thousands of processes wouldn’t achieve their goals. Their response was to launch a multiyear business transformation built on two levels of a tightly specified architecture. One was bottom-up, grounded in an end-to-end view of markets and customers, the other a top-down redesign of the company’s operating model (exhibit).

Rewiring expectations

The company started by identifying a few hundred combinations of global businesses and local markets: matrix-like operational units known as business-market combinations. The executives in charge of each of them co-owned P&Ls and had free rein to overturn conventional ways of working and forge cross-functional and cross-business combinations. They also set stretch goals that no individual function or business could meet on its own. These included achieving a number-one market position, reaching new segments in emerging markets, embracing new business models, and opening new sales channels.

A group of transformation leaders was created to fight cultural resistance and help connect teams end to end. Monthly reviews by top executives tagged lagging business-market combinations requiring extra attention. One of the business units in need of change manufactured lower-tech products. It had long operated in an oligopoly market with high margins and sluggish multiyear technology cycles but now faced threats both from chip-based offerings with six-month technology churns and from more efficient competitors, some in China, offering better-priced products.

A business-market combination took the lead in redesigning its value chain end to end. Early on, it agreed to move new products from sourcing to retail shelves in 50 days rather than the usual lead time of up to 300 days. This radical shift in tempo forced the company to plan more collaboratively with retailers, to introduce platform-based product designs that encouraged input across business units, and to redesign regional supply chains to keep pace with the changing components.

Within 18 months, this business-market combination turned around its performance—from heavy losses to a number-one market position, with healthy margins. Company leaders noted that few of the changes were fundamentally new in concept; it was the mind-set and behavioral shifts that had enabled broader collaboration and made the real difference. They also concluded that they could accelerate cultural change by investing in leadership capabilities rooted in transparency and regular feedback. This overcame the impulse of many managers to sidestep any changes that might lead to conflict.

Revolutionizing processes

Without more standardized processes, however, the innumerable variations in operating models across the company’s many businesses and geographical markets would hamper collaboration between the new cross-functional and cross-business teams. This would continue to stymie innovation, constrain cross-business sales, frustrate efforts to achieve scale economies in IT, and inhibit the sharing of information and skills. Team leaders, including some of those initially most skeptical about change, had a year to simplify processes. They began by defining seven value chains that created and delivered value to customers in truly distinctive ways. These value chains served as the operational platforms for manufactured products, large projects, two distinct software business models, and three broadly different service businesses. By identifying what really mattered to customers, the company consolidated more than 80 value-chain designations.

For each designation, the team leaders identified cross-business processes across the company that were truly distinctive, typically about 10 percent of the total. They allowed variations only in processes that were needed to serve specific customer segments or to satisfy regulatory requirements. The hundreds of others were slotted into standardized process templates that could be supported by readily available IT. A new and relatively concise process lexicon2 replaced a massively complex compendium that hindered cooperation—for example, by including dozens of business-planning definitions that prevented units from sharing forecasts. Standardization also led to vastly simplified roles (reducing them to just a handful of roles for each function), as well as to shared performance metrics and capability frameworks.

The changes have had a striking impact on the company’s morale, ways of working, and performance. Multiple sales teams in a region, for instance, with a transparent view into each others’ order books, can now negotiate deals collaboratively with customers across a range of products. The greater transparency has enabled health-services businesses in one part of the group to learn from the large-project capabilities of manufacturing-oriented units. Consumer-products businesses have been able to share speed-to-market insights with other units. In IT, a consolidation of approaches to enterprise resource planning has expanded opportunities to share data and develop more robust analytics. Meanwhile, to remain agile, functional teams from different units coalesce and disband as demand and business conditions shift.

As in most transformations, pockets of resistance took time to unblock. In one business, sales managers pushed back when asked to open their book of potential clients to colleagues in other units, arguing that critical intelligence would leak to competitors. In reality, core competitive information was well protected, and when the list was opened, several business lines came together to win a big contract to serve a major new customer. By making senior managers owners of simplified process repositories, the company hopes to keep complexity from creeping back at the grass roots.

Overall, however, the leaders have been struck by how cultural change takes hold once proof of the gains from transparency and collaboration become tangible. They point particularly to the way functional “ambassadors” outlined the benefits of standardization, so that a multitude of variations on a commercial process for forecasting sales and managing leads could be replaced by just one. These ambassadors, with their strong knowledge of how to standardize processes, have taken on a second mandate: collaborating with peers from other functions to link processes end to end. New measures of accountability, and end-to-end performance targets (for functional leaders) tied to them, have served to bring teams together.

While markets remain fluid and organizational change is hard, executives across a wide range of companies and industries must expect silos to continue obstructing joint action among functions. But they can head off the problem before it overwhelms them if they establish the kind of targets, end-to-end accountability, process standardization, and execution-oriented, collaborative culture the two companies described here did.

https://mck.co/3xT9cNn

How to Choose the Right Digital Marketing Model

Four clear paths for winning and retaining customers today.

by Matt Egol, Michael Peterson, and Stefan Stroh

Look at virtually any consumer industry and you’ll see how changes in digital technology are fundamentally altering the way that consumers engage with brands before, during, and after a purchase. Consumers today expect to browse, research, solicit feedback, evaluate, and push the “buy” button at their own pace, and at the time and place—and via the platform—of their choosing. Consumers also continue to engage with brands online after a purchase and to share experiences with one another. Much of this consumer journey is beyond the direct control of companies, and marketing organizations are sprinting merely to keep pace.

The good news for chief marketing officers (CMOs) is that digital marketing can offer detailed data on and analysis of consumer behavior, as well as precise results about a marketing program’s effectiveness, with a degree of detail and precision that previous generations of CMOs could hardly fathom. The challenge is that these new technologies and consumer behaviors are raising the requirements for what will succeed in the market.

Building powerful consumer experiences requires brands to operate outside their comfort zone; for example, they must work with much shorter cycle times, with more rapid and frequent iterations, and through a broader vendor ecosystem than the traditional advertising agency process.

In addition, consumers increasingly demand marketing messages and offers that are highly personalized, relevant, and targeted. Miss the mark, and you risk losing them forever. In that regard, digital marketing offers both greater rewards (in terms of higher engagement and ROI) and greater risk (due to the execution complexity and the need for behavioral changes across the organization).

In this environment, CMOs know they need new capabilities to succeed. In a recent survey of more than 300 CMOs in the United States that Strategy& conducted with the Association of National Advertisers and Korn/Ferry, 72 percent said that building capabilities in the area of digital marketing is vital. The difficulty is that there’s no one set of capabilities that applies universally. Companies must identify what kind of marketing organization they need to make their strategy a success, choose a digital marketing model based on their strategic objectives, and then focus on developing a handful of marketing capabilities that will allow them to bring that model to life and consistently excel.

Four Digital Marketing Models

Strategy& has identified four equally successful digital marketing models: Digital Branders, Customer Experience Designers, Demand Generators, and Product Innovators. A company’s focus for marketing investment might have elements of each, but odds are that one of these models represents the right marketing organization for your company.

• Digital Branders are most often consumer products companies or other marketers that focus on building and renewing brand equity and deeper consumer engagement. These companies are shifting their investment from traditional linear advertising toward more immersive digital multimedia experiences that can connect consumers to the brand in new ways. They are reimagining how they engage consumers, with the primary goal of recruiting new consumers to the brand and driving loyalty through multiple experiences with the brand.

• Customer Experience Designers use customer data and insights to create a superior end-to-end brand experience for their customers. Typically, these companies (such as financial-services companies, airlines, hotels, and retailers) build their business models around customer service. By reinventing how they interact with customers, and wowing them at multiple touch points, these companies hope to create an ongoing dialogue and build a loyal customer base.

• Demand Generators (typically retailers) focus on driving online traffic and converting as many sales as possible across channels to maximize marketing efficiency and grow their share of wallet. All elements of the digital marketing strategy—website design, search engine optimization, mobile connected apps, and engagement in social communities—are tailored to boost sales and increase loyalty. Although Demand Generators also need to leverage content to drive engagement, they’re more focused on driving volume and efficiency than on curating the deep, emotional branded experiences that Digital Branders pursue.

• Product Innovators use digital marketing to identify, develop, and roll out new digital products and services. These companies employ digital interactions with consumers primarily to rapidly gather insights that can shape the innovation pipeline. By helping nurture new sources of revenue, the marketing group increases the value of the company.

The Menu of Capabilities

These digital marketing models are not industry-specific. In fact, companies in the same industry can choose different digital marketing strategies with which to go to market. For example, in the telecommunications industry, Vodafone aligns most closely with the Digital Brander model, Verizon functions as a Customer Experience Designer, KPN/E-Plus is a Demand Generator, and Orange is a Product Innovator. Each of these companies has focused on a different set of capabilities to bring its digital marketing strategies to life, and each capability entails building the right combination of processes, tools, knowledge, skills, and organization.

There are eight basic marketing capabilities, which are more or less relevant depending on which of the four digital marketing models a company applies. (Of these eight, the first four focus on building insights and the last four focus on activation based on those insights.)

1. Segmentation and needs assessment, or the use of digital research tools to analyze transactions, identify customer pain points, and interpret non-transaction data (e.g., social media). By better understanding how specific subsets of customers assess, purchase, and use products, the company can more directly target advertising, promotions, and content along the path to purchase.

2. Measurement, or the development of consistent metrics across the full path to purchase (i.e., at home, on the go, and in stores). This capability also includes metrics for consumer engagement across paid media (e.g., advertising), owned media (such as the company website), earned media (coverage in other publications), or shared media (e.g., Facebook or YouTube). Implemented correctly, these metrics can help quantify ROI across the digital marketing program.

3. Real-time decision making, fostered by regular monitoring of social sentiment and brand health that enables adjustments during marketing campaigns—including branded media and in-store merchandising—to make them more effective.

4. Personalization and targeting, or the creation of a singular view of the consumer across sales channels and digital touch points through the integration of multiple data sources—including household data, shopping behavior, mobile data, and Web analytics. Companies can also augment customer profiles with social media data to improve target marketing and specific offers.

5. Optimized content, or the dissemination of branded content through multiple direct-to-consumer platforms (such as websites, mobile devices, and social media channels) that are easy to search and navigate. Optimized content helps the company engage consumers and drive registration and sales across a variety of formats, so that it can better provide relevant products and services to those consumers for specific occasions or phases of life.

6. Innovation, spurred by the leveraging of social media for richer consumer insights that fuel product development. Besides improving the product itself, these insights can enhance the customer’s experience with the product.

7. Social influence and advocacy, or the provoking of consumer engagement to create and share content, while also mining this social sentiment to further improve consumer engagement. Companies with strong social influence and advocacy can encourage consumers to create and share content about the brand within their social networks, and then use the resulting insights to optimize their marketing communications.

8. Omnichannel experience, or the implementation of marketing programs across channels. This capability also entails investing in technology, analytics, and talent to support seamless mobile, social, and e-commerce experiences, allowing consumers to engage with the company wherever and whenever they want. Omnichannel experiences also include integrated marketing programs with third parties, along with broader media and trade-promotion strategies.

Building the Right Capabilities

It’s virtually impossible to be great at all of the digital marketing capabilities we’ve identified. That’s why each company must focus only on the capabilities that align best with its digital marketing model. There is a link that connects the company’s strategy, the digital marketing model it needs, and the marketing organization and marketing capabilities required to succeed with that model. The capabilities necessary to succeed as a Digital Brander will be different from those required by a Demand Generator. This is not an ironclad relationship—there are multiple paths to success, and even companies pursuing the same Demand Generator model, for instance, may choose to emphasize different capabilities. But in general, certain models require that the company have a specific set of supporting capabilities (see Exhibit).

Digital Models in Practice

Coca-Cola is a perfect example of a Digital Brander. Teens and young adults are its biggest consumer segments, and to keep its brand strong with these consumers, Coca-Cola is hyper-focused on finding ways to embed itself in popular culture. With this in mind, the company has invested in differentiated capabilities including “optimized content” and “social influence and advocacy.”

This means that Coca-Cola identifies experiences that are consistent with its brand, creates content around those experiences, and then encourages its community of users to share additional content that they create through social engagement. Although not all of this material goes viral in the communities Coca-Cola is targeting, the company is far more successful than others, thanks to the development of these specific capabilities.

For example, in one recent promotion, Coca-Cola developed unique vending machines equipped with video displays that allowed consumers in two cities (Lahore, Pakistan, and Delhi, India) to interact. Because of political and religious differences, the two groups know very little about each other, but the video project—an update of the company’s famous “I’d like to buy the world a Coke” campaign—was aimed at connecting them through a shared experience. The campaign generated tremendous buzz for Coke, and was heavily shared on social media, in part because it was so emotionally resonant.

Another example of seeding content into popular culture was a Coke Zero contest on social media for “my favorite dance moves.” The winning dance went viral around the globe, with the Coke Zero brand integrated into the content throughout. Coca-Cola was recognized as the marketer of the year at Cannes in 2013, in large part due to its innovative approach to marketing through shared content.

Virgin’s airline operations, on the other hand, are a good example of a Customer Experience Designer. Like many other airlines, Virgin wants to avoid being seen by passengers as simply a utility. Instead, it aims to create a more customer-centric branded experience that starts before the customer buys a ticket, continues during the flight, and extends after the trip is over. With this in mind, Virgin has focused attention on building a “segmentation and needs assessment” capability and an “omnichannel experience” creation capability.

In practice, this means the airline uses purchasing and behavioral data to segment customers, identify needs and pain points, and create a personalized experience across all channels—whether customers are at home on the computer, on a mobile phone, using in-flight screens, or interacting with Virgin staff members.

For example, Virgin is investing in a more interactive and personalized in-flight experience that is tailored to different segments of travelers. A frequent traveler to London might get specialized content after takeoff, like the latest reviews of restaurants around Piccadilly. Passengers will also be able to interact with a concierge service while on the flight and with other passengers via Chatter, a social media messaging platform from Salesforce.com. The entertainment options and other aspects of the experience will also be personalized on the basis of a user profile built over time (through factors such as the videos customers opted to watch, the meals and drinks they purchased, and other personalized elements).

By curating the passenger’s journey in this manner, Virgin hopes to create a community and deliver an experience that goes beyond the flight itself to reinforce the airline’s brand image of adventure and fun. Virgin’s corporate culture is a significant asset in this endeavor—its highly engaged employees embrace the idea of cultivating positive experiences for customers. (That has helped Virgin America become the fastest-growing airline in the United States.) Critically, Virgin’s marketing investments are intended to support this culture, while also empowering employees to innovate and continue improving the customer experience.

And then there is Walmart, a prototypical Demand Generator. For example, the company is focused on converting visits to its website, social media properties, and mobile apps into actual sales. To accomplish this, it has developed capabilities in “real-time decision making” and “personalization and targeting.”

The company’s in-house media platform, Walmart Exchange, is a robust ad-serving platform that allows brands to target shoppers precisely, measure the ROI of both online and offline impact, optimize content and assortment of products, and track non-Walmart.com digital ads to see which sites are driving traffic to Walmart.com (and whether users are making purchases). For example, a shopper who visits the website after viewing a targeted display ad embedded with a health-and-beauty-aid coupon might find an assortment of other, related products to consider on the site.

Beyond these offers and assortment tools, Walmart is also developing relevant content aimed at driving conversion—and pushing its network consumer packaged goods manufacturers to do the same. For example, “how to” videos, ratings, reviews, and listings of foods’ nutritional content can all help drive engagement and conversion on the company’s site. Investments in this kind of optimized content can boost conversion by more than 70 percent.

Perhaps the least typical of the digital marketing models (but no less powerful than the others) is the Product Innovator. Henkel, a manufacturer of various household chemical products including detergents, adhesives, and cosmetics, based in Germany, is a clear Product Innovator. The company so strongly emphasizes R&D that about 40 percent of its annual cosmetics sales come from products that were launched within the previous 24 months. On the marketing side, this success is due to a finely honed innovation capability as well as a sophisticated measurement capability that continually tracks preset key performance indicators to determine whether to continue a product trial or stop it and redirect resources to more promising projects.

The company encourages employees in the marketing and R&D departments to participate in the innovation process through idea-generation contests and incentives. Marketing employees are also required to work in sales regularly to stay in touch with the market and help identify customer pain points. The payoff is an innovation process that has generated consistent results. For instance, one recent product innovation—a laundry detergent known as MAS Color “con un Toque de Suavidad” (“with a Touch of Softness”)—won the “Best New Product” award in the household care category in Mexico.

Bringing the Capabilities to Life

No matter which marketing model a company selects—and which capabilities a company chooses to emphasize—the CMO must make certain decisions and adapt certain aspects of the marketing organization to bring the digital model to life. For example, the CMO must decide whether the marketing capabilities will be developed internally or outside the company. If the CMO wants the capabilities in-house, the organization will need to ensure that the right skills, processes, technology, and governance are in place, along with metrics to measure results. This is hard work, and sometimes it’s preferable to leverage outside partners and vendors as the company stitches together the capabilities needed to support the digital marketing model. As part of this “stitching-together” process, marketers are redefining how they work with media partners to create and distribute content, as well as how they manage social media. CMOs are also learning to work more closely with technology providers to understand better how to leverage technology such as data analytics, media mix modeling, content management, and customer relationship management.

The CMO must decide how best to manage these capabilities—centrally within the organization or distributed throughout the company at the business unit level. The right approach is usually some combination of the two. The central function naturally houses the design of capabilities, selects and coordinates with outside vendors, and administers those marketing functions with particular scale advantages (e.g., search engine optimization or social listening). At the same time, certain capabilities need to reside at the business unit level if they are to be incorporated into the daily workflow of the business units—and the marketing function overall.

For example, Procter & Gamble invests in scale marketing programs through center-led teams. Some of these scale programs—such as BrandSaver, e-Store, and Tremor—have their own general manager and P&Ls. The company also embeds specialized talent in the divisions and customer teams as a way to further integrate planning and execution processes. L’Oréal, by comparison, takes a more decentralized approach, building capabilities primarily at the level of divisions and customer teams. The company is willing to sacrifice scale to push talent closer to its brands, with fewer capabilities built and governed centrally. This decentralized structure is in keeping with the culture of greater competitiveness among brand teams at the company.

To bring the digital marketing model to life, the CMO must also think carefully about which behaviors to encourage and which to discourage—and how to nudge employees to adjust their behavior accordingly. This kind of cultural evolution is not easy and requires that leaders make use of all formal and informal organizational levers at their disposal. Formal levers include organizational structure, decision rights, discrete career models, and financial incentives. Informal levers include networks of relationships across organizational boundaries, shared vision and objectives, individual goals, and common sources of pride.

Finally, the CMO must decide on a road map and sequencing of efforts. Odds are that some capabilities will take longer to build than others; it’s important to incorporate this variation into expectations and create stepping-stones by which the marketing organization can pursue capability goals over the next 12, 24, and 36 months.

The Journey Starts Now

Much of today’s “customer journey” occurs in the digital realm—a place beyond the direct control of companies, but highly sensitive to efforts to provoke and amplify social engagement. As a result, marketers need to adopt digital marketing models to better engage customers before, during, and after the purchase. They need to “pull” consumers into an ongoing conversation about the company’s products and services. There is no one right way to accomplish this engagement, and there are many possible pathways to success. But it’s critical that marketing organizations begin the digital journey as soon as possible to keep pace with shifting consumer expectations and behaviors. 

Reprint No. 00241

The meta list of frameworks and visual guides

I have been blogging about strategic and operational frameworks for close to five years now. In the course of that work, I have come across a number of sites that will be of interest to others as well. Some focus on frameworks, some focus on creative graphics, some focus on providing definitions of key business terms. Each has their own unique perspective. So here is the “meta list:”

Visual Literacy

One of my all-time favourites. Scroll down to the periodic table and roll your mouse over the various concepts and frameworks. A great idea!

Quick MBA

One or two pages on some specific topics, usually (but not always) with a relevant graphic. I find the chapters on strategy, operations and marketing the most relevant. 

12manage
A lot of frameworks, again grouped into chapters, similar to 12manage. You need to sign up to actually see the content. 

Knowledge Communication
A site from the University of St. Gallen in Switzerland, focused more on visualizing knowledge than on basic frameworks.

Mind tools
This site focused on short tools in many different categories (e.g. time management tools, stress management tools), but it also has some interesting strategy and leadership concepts.

Value Based Management

A classical site with a list of concepts and frameworks and a short explanation on each term. 

Business Balls

A quirky site, with everything from cold calling to cockney rhyming slang. Plus they bring you the “quiz of the week.” Look for the section on leadership / management. 

RFFlow

Any questions on flow charting? This is your site. 

Chart it now
This site will sell you PowerPoint and XLS templates for specific format, for something like $20 or 30. But they also provide some relevant background information on some of the concepts. 

Protovis

Protovis is a software designed to provide unique data visualization opportunities. I find the examples that they show fascinating, but I haven’t actually used the software.

Proven Models

A visually very appealing site, very nicely done. The number of relevant frameworks is quite small, but the site provide a lot of details. 

Wikipedia

And if all else fails, there is always Wikipedia.