Technology is often the core focus of digital transformation efforts at large enterprises. And while the right technology stack is certainly important, other areas of the business also need to be transformed—all the way down to how teams are structured.
Organisation structures come in many shapes and forms, but through my work I have largely found three types most commonly being used at enterprises in India today.
Structure 1: The Siloed Approach
Modern marketing teams are trying out new technology and platforms all the time. However, the structure above places the CIO’s team in charge of marketing technology evaluations. But technology teams don’t always understand the marketing/business metrics that need to be considered for an effective marketing technology solution.
Let’s consider cross-channel marketing. When the technology team is leading the evaluation of a marketing automation solution, the primary parameters they might consider are data size, database schemas, real-time capabilities, channel throughput and security—all important considerations to make.
However, the IT team is less likely to consider parameters such as the degree of personalization—including use of clickstream variables, ease of campaign sequencing across channels, creating dynamic templates, and the ability to use campaign response in subsequent campaign design. All of these are vital to the marketing team.
The second challenge with the above structure is the lack of analytics expertise and adoption. Organizations need to have a strong capability in analytics across the business, marketing functions, and clickstreams. In today’s world, a digital marketer constantly needs to utilize clickstream data to decide channel and message optimization for micro-audience segments.
When business intelligence and analytics report to the CIO, clickstream analytics often becomes an afterthought, if one at all. Most of the focus is on data storage and publishing APIs for data access. This leads to one of two suboptimal outcomes. The first is the digital marketing team tries to use alternative and isolated clickstream analytics solutions, or it doesn’t use any clickstream data at all.
Finally, there is no clear focus on simplifying user interactions. While the back-end technology might be great, it could be extremely difficult for a customer to navigate through a website. No one is owning this process while the business and technology teams make tactical changes based on their specific needs.
The key for this particular organizational structure to work is the creation of a horizontal function that stitches the company’s overall objectives together, while a senior leadership member—the CEO, CIO, or CBO, for example—ensures coordination across all business functions.
Structure 2: Expertise-Based Team Structures
This structure is typical at e-commerce companies. Digital is their core strength, and they have gone through multiple iterations to arrive at this.
Take a look at where analytics resides in this org structure. This structure enables marketers to use data to optimize channel and messaging for micro-segments. There’s also a lot of focus on developing expertise on clickstream analytics and using this for marketing decision making. For example, consider a visitor to a digital e-commerce platform that has over 1,000 products. The analytics team uses clickstream data of this visitor’s past behaviour, combines it with the behaviour of other similar visitors, and identifies that this visitor belongs to a non-price sensitive segment. Further, the team concludes that this visitor is likely to purchase brand A SKU 1, brand B SKU 2, or brand C SKU 3 through propensity models that use clickstream and past customer data.
Powered with this information, the marketing team is not only able to recommend the right product to this visitor on own and paid channels, but also take a call not to run a discounting campaign. Without data democratization, this wouldn’t have been possible.
Also, the fact that this structure has a dedicated product team responsible for designing digital conversion journeys is quite beneficial. This team obsesses over features and designs that help improve the overall digital conversion. In addition, product managers form a bridge between the marketing and technology teams.
Finally, the marketers evaluate and run marketing technology solutions for new customer acquisitions and their subsequent retention (along with help from product and technology teams). This means a more holistic evaluation, robust implementation, and organizationwide adoption.
But there are a few things to be wary of in this structure. Conflicts could arise between individual team objectives and overall organization objectives, which might lead to long project cycles. To avoid this, it is important to create common business goals, in additional to functional goals, for all teams. For example, performance marketing KPIs should not only have traffic by paid channel, but also the conversion from these channels to foster better collaboration.
One thing that gets missed in this organizational structure is a marketing technology role. The line between digital marketing and technology is thinning every year. While digital marketers become more tech-savvy (or tech teams become more marketing-savvy), a marketing technology person is needed to drive this.
Structure 3:The Digital Champion
A lot of new-age financial services companies are pivoting to the structure above. I am cautiously optimistic. In this structure, the chief digital officer is responsible for digital marketing and the product and technology teams; hence, the coordination is significantly better when compared with structure 2.
But it is important to note that challenges do exist with this structure. It is extremely difficult to hire a good CDO. You are looking to hire the jack-of-all-trades who holds expertise in, preferably, product and business. Organizations can end up going through multiple iterations before they find the right candidate. The CDO needs to effectively delegate decision making to team leads to avoid being a bottleneck. On a day-to-day basis, a CDO can drive only one or two projects directly. For the rest, the CDO is really an adviser.
Another problem can be top-funnel digital marketing and brand building. As search and other bottom-funnel channels get increasingly saturated and expensive, it is inevitable for digital to move more toward digital branding, bringing the CMO and CDO working closely together.
There is no one-size-fits-all answer to structuring your digital teams. Wins exist in all structures, despite their challenges. In my opinion, three critical things are needed to make your digital teams successful:
To start with, focus on building expertise centers so that you can utilize newest technology offerings to understand more agile ways to achieve business outcomes and to disrupt the status quo.
Second, define a few key digital metrics that everyone in the organization works toward. This helps make the digital agenda the organization agenda.
Third, for organizational change to be sustained and withstand our turbulent business environment, it is up to the leadership team, particularly the CXOs, to personally help to resolve conflicts across teams and drive digital success.