Aside from making the inside/outside decision, CMOs 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.
- Matt Egol is a partner with Booz & Company and the chief strategy and marketing officer for Booz Digital. He leads the firm’s work in shopper marketing, and specializes in strategy and capability development for consumer brand markets, marketing services firms, and media companies.
- Michael Peterson is a Booz & Company partner based in Düsseldorf. He specializes in corporate strategy and business model transformation for communications companies, and in convergence and customer-facing processes in the broader media and telecommunications environment.
- Stefan Stroh is a partner with Booz & Company and Booz Digital based in Frankfurt. He focuses on digital strategy and transformation programs, working with companies in the travel and transport, high-tech, and consumer products sectors.
- Also contributing to this article were Booz & Company principal Sebastian Blum and senior associate Paolo Castano.