“All things in nature have a shape,” wrote the Chicago architect Louis Sullivan in his 1896 landmark essay “The Tall Office Building Artistically Considered”. According to Sullivan, “it is the pervading law of all things … that form ever follows function.”
With this dictum—form follows function—Sullivan argued that the “upward character” of high-rise building design is a natural extension of the “pervading law”.
Which begs the question: If form should follow function in building architecture, shouldn’t the same hold true for business architecture? Like the physical building it occupies, shouldn’t a company’s organizational design be appropriate to its purpose?
It’s a question a lot of folks these days are pondering, including participants in last month’s board of trustees meeting for the Marketing Science Institute. Noting that “the customer equity paradigm” forces a company to structure its activities around customers rather than products, the group moderator asked: “Is a new marketing organization emerging out of this evolution?”
I have a few thoughts in the context of precision marketing—which, after all, provides a whole new set of financial metrics for the marketing organization to report and track against. Good timing, given that marketing accountability is rising to the executive suite, to the CMO, who has traditionally had no P&L responsibility whatsoever.
Given today's emphasis on ROI, the CMO might think about drawing a line down the middle of the organization, between those who set the marketing objectives and those who execute them. Bill Mirbach, VP of Direct Marketing at Intuit, once told me that a good organizational model might be to simply say, “Okay, finance guys, tell the marketers what their allowable cost per order is, and you figure it out depending on the business needs as defined by the senior manager.” Makes sense. After all, marketing managers shouldn’t be spending their time crunching numbers when they could be arm wresting with vendors for cheaper ad space.
The best way to resolve the internal conflict that exists in many companies with respect to marketing ROI may be to simply divorce the Art from the Science. Create two separate functions, in essence, and let each one do what it does best. Let Art focus on messages, ideas and creative development and let Science focus on the analytics of data management as well as the underlying economics of the overall marketing program.
To that end, how about creating a new executive position? Call it the Director of Marketing Economics. Reporting to the CMO, the DME would oversee all activities related to marketing ROI. The job description would vary, depending on the specifics of the portfolio and purview. In all cases, however, the resource allocation questions would naturally flow from a customer-centric perspective.
For example: Which customer segments should we spend money on? How much should we spend on customer acquisition versus retention? How much should we spend on mass marketing, and what are each of the different vehicles to which we'd want to allocate funds? How much should we spend on precision marketing, and what are each of the different vehicles to which we'd want to allocate funds?
Just an idea. CMOs might not go for it. But at least Louis Sullivan would've approved.
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