This chapter is from the book
This chapter is from the book
This chapter is from the book
Rethinking the Organization
Applying the 5Cs within the company leads to a transformation across a wide range of aspects of organizational architecture. As summarized in Exhibit 10–4, these changes affect organizational culture and values, value-added processes, structure, customer interfaces, technology, organizational boundaries, metrics, and human resources. In each of these areas, the hybrid consumer is creating new challenges, and the 5Cs are offering new opportunities.
|
|
Offline |
Online |
Convergence |
|
Organizational Culture and Values |
Bureaucratic, stable and executional focused |
Entrepreneurial, constant change, chaotic |
Entrepreneurial and executional excellence |
|
Processes |
Rigidly engineered from scratch |
Fluid but not systematic |
Modular "plug and play" |
|
Structure |
Functional, other silos, and matrix |
Networked |
Digital fabric, customizable |
|
Customer interface |
Physical interaction |
Virtual interaction |
Combination of physical and virtual interactions |
|
Technology |
Legacy and client server |
Web browsers |
Web services |
|
Boundaries |
Isolated organization |
Boundaryless |
Firm integrated into a larger community |
|
Performance measures |
Backward looking ROI, Balanced Scorecard |
Real time Eyeballs and share |
Forward-looking Value creation |
|
People |
People are here for life |
People are fluid and "for purchase" |
Grow people while they are here |
For example, consider how the traditional marketing organization is reshaped along each of these dimensions. Marketing needs new culture and values focused on a combination of execution and entrepreneurship. By creating modular processes for marketing, the marketing discipline can be more seamlessly integrated into the work of other parts of the organization and involve the customer as co-producer. By creating a structure based on a digital fabric, marketing can more easily offer access to its insights throughout the organization and create links with customers and suppliers. Marketing also has to create structures that integrate separate silos within marketing (between product development, advertising and other areas). Marketing needs to focus on breaking other organizational boundaries such as with R&D and across global operations. Marketing needs to manage physical and virtual customer interactions to create a coherent interface across channels. Marketing can use the technologies of web services, both in offering its own services to the organization and building services using outside vendors. Most of all, marketing managers need to rethink the boundaries between marketing and the larger organization, viewing the marketing function as a resource that can be drawn into a wide range of strategic decisions. Marketing managers need to develop creative performance metrics focusing on forward-looking measures and the lifetime value of the customer. These measures need to focus on share of wallet (the percentage of total customer spending in a category across companies) rather than just market share. Finally, marketing needs to identify and develop its people and keep them engaged, while at the same time offering marketing perspectives for attracting and retaining employees across the organization.
Given the sweeping nature of this impact, implementing a convergent organizational architecture can be daunting. In Chapter 11, we examine a variety of strategies for successful implementation of organizational change and a number of pathways to convergence.