According to a survey by Gartner, Inc. CMOs seeking operational efficiency are increasingly centralizing their function with 60% of marketing organizations already having centralized some or all of their functions. CMOs cited operational excellence issues viz. prioritization, workflows, and collaboration as the prime factors for initiating changes to their organizational structures.
In a cautionary note by a group of analysts, it’s been pointed out that centralization shouldn’t be seen as an organizational panacea.
In their recent survey, Gartner surveyed more than 380 marketing and communications leaders in the U.S, Canada, France, Germany, and the U.K. from November through December 2021. The survey revealed that the pace of organizational centralization has quickened in comparison to previous years. This trend is changing the marketing C-Suite and organization as a whole, is what the report depicts. The survey was intended to explore the functionality design for both the marketing and communications teams and their co-dependency with other cross-functional collaborations within the organization as well as with the external partners.
According to Sally Witzky, Senior Director Analyst in the Gartner Marketing practice, “CMOs may be lured by the promise of greater control and economics of scale that centralization offers, but each structure brings with it a set of benefits and drawbacks.”
The survey findings reveal the silver lining distinguishing the B2B & B2C marketing organizations. While B2B marketing organizations favor and utilize a balanced or hybrid structure approach, B2B organizations are primarily centralized. As a matter of fact, CMOs within B2C organizations doubled-down on a “fully” centralized structure over “mostly” centralized.
According to Sally, "This is because B2C organizations are primarily consumer-driven." "They tend to work with and depend upon a roster of external agencies for the brand or individual brands, and as a result tend to have more centralized marketing. However, B2B organizations are embracing a new emphasis on buyer centricity and are changing their marketing organization structures to gain some centralized control and process."
The study found that some marketing leaders are increasing their use of centralized and insourced marketing expertise. The majority of the survey respondents said they either already have a centralized model or are in the process of centralizing their function. Based on this finding, Gartner recommends that CMOs explore if centralization could yield cost savings, better talent, and improved consistency of experience for customers. Gartner experts revealed that CMOs must pore over whether it's easier to centralize some of the centralized marketing work or mine those decentralized areas for waste, inefficiencies, duplication, and individuals or small teams who work in silos – then make changes accordingly.
To successfully implement this, Gartner recommends the following steps:
Better understand how your stakeholders feel about the problems that are necessitating the marketing restructure and get buy-in for the to restructure itself. The ability to understand trends will enable you to better influence decisions around who, what, and when to purchase marketing technology.
Clarification from senior leadership on what the overall purpose of this restructuring is and what their priorities are critical to getting employee “buy-in." Publicly announce the restructure to all teams affected. Make sure the announcement clearly articulates priorities, goals, and why the changes are necessary.
To change the structure of your team and have it benefit your growing business, CMOs need to clarify the vision and goal(s) of the restructuring, along with the structure priorities they'll follow to reach them.
The average marketing team has 5 leaders and each one of them is trying to lead the function. Gartner's latest research found that most marketing leaders have no formal reporting relationships with other parts of the organization. This leads to a lack of direction, silos, and stagnant growth. Gartner recommends design workshops that can bring together all the leaders within the primary organizational functions to develop an understanding of their respective business needs.
CMOs are increasingly centralizing their functions to streamline work and drive cross-team collaboration. They need to infuse collaboration to help your marketing organization evolve.
To capitalize on the growing power of CMOs, Gartner is advising marketing leaders to take a more active role in the development of their companies' overall business strategies.
Prepare a presentation to present the rationale and the proposed marketing structure, discuss rollout objectives with all affected parties. Furthermore, conduct a meeting with the new management team to communicate your plans, goals, and objectives.
Embrace the shift and create a new structure that enables a focus on the customer. There are three major points of friction between the CMO and the CEO: functions, structure, and information. Each one can contribute to friction, so it is critical for marketing leaders to address both structures and information flows in order to increase trust. Companies should distribute initiative owners across the marketing team, and ensure that all team members have a role to play in customer-driven innovation.
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60% of CMOs Have Centralized Some or All of Their Function in the Pursuit of Operational Efficiency According to a survey by Gartner, Inc. CMOs seeking operational efficiency are increasingly centralizing their function with 60% of marketing organizations already having centralized some or all of their functions.