Centralization (For Marketers)
Oh, btw: I've been focusing for the last couple years on Organization Design for Marketing Orgs. There will be more of that in my posts to come, so, be warned? Or get stoked. Either way, just signaling. What follows below is a primer that I wrote for internal consumption at work, and figured it'd be good for here, too. It's a bit of a ramble, but hey. We're back to blogging, folks.
When we talk about things that are centralized or decentralized in an organization, we’re usually talking about capabilities.
Capabilities can and should be viewed at various different altitudes in an organization – at the senior-most level, there is a “Marketing” capability represented and led by the CMO. This level tends to be mostly synonymous with the term “Functions.” Below the CMO there are usually other capabilities, like Brand Marketing, Category Marketing, Media, Insights, Strategy, and the like. (Pace Layer: L.) This is what I'm referring to in this article, but capabilities could extend all the way down to the very granular, hour-by-hour level, with things like Ticketing or Prepping Mechanicals. (Pace Layer: A.)
A structural trend that we’re seeing in marketing teams is toward centralization of the various capabilities underneath the CMO. This means larger and more "powerful" marketing teams, with larger Marketing Leadership Teams (MLTs), more direct reports for the CMO to manage, and more coordination inside of the marketing team. In some cases, those teams get so powerful that the CMO ends up leading a Line of Business (LOB), and has responsibility for managing profit and loss. Whether it’s “Intelligent Cloud Services” or “Ice Creams,” issues relating to three out of the Four Ps of Marketing – Product, Price and Promotion – can be decided by people reporting into the CMO, leaving Place to partners in Commercial, Retail, or similar.