Ashley Friedlein, CEO and co-founder of Econsultancy, recently posted an insightful take on what a completely new organisational structure for marketing and digital might look like if you were to start with a blank sheet of paper.
Specifically, Ashley’s focus was (rightly) about a structure that was ‘fit for customer centricity’ and, in light of the importance of digital transformation to so many businesses, also embraced digital as fully integrated into the business.
His proposal was a perceptive take that brought together key customer facing functions (including sales, customer service, and marketing) under a ‘Customer Director’ who reports into a Chief Customer Officer on the board.
There are specific horizontal capabilities such as customer experience, content, data and CRM, and analytics and insight, as well as specific functions such as marketing, sales and service, all under the Customer Director.
There is much to like about it. In a survey for the recently released Econsultancy/Adobe Quarterly Digital Intelligence briefing, creating a joined up customer experience was selected by respondents as the single most exciting opportunity both in the short-term (over 2015) and the longer-term (over the next five years).
Customers think in terms of a general brand experience rather than differentiating between brand touch-points and channels like companies do, so it makes sense that we attempt to represent a more joined up approach to customer experience in the way that we structure organisational resource.
But the key phrase for me here is ‘blank sheet of paper’. if we were to truly organise around the customer rather than functional silos in organisations, what might that look like?
The need for improved organisational agility
If digital was to be integrated throughout the organisation to such an extent that there was no centralisation of digital capability at all, then what are the real implications for organisational design?
If we were to genuinely start from scratch would we end up with structures that resemble those that we know now or something completely different?
The rapid pace of change that most companies find themselves facing dictates a far greater need for improved organisational agility, adaptiveness, experimentation, and baked-in innovation whilst being ruthlessly focused on customer needs, and maintaining a healthy balance between data-driven decision making and the kind of creative leaps forward that come from thinking beyond functional boundaries.
Perhaps one of the key dynamics in this is the one between vertical specialist expertise and the need for horizontal customer or product focus. Most companies prioritise the grouping of functional expertise resulting in vertical departmental silos as the defining organisational design.
In the context of that rapid pace of change, silos are not good. They slow communication and decision-making, and lead to over-burdensome hierarchies.
When progress depends on collaboration between teams with different agendas, or on decisions being passed up the line before being agreed at senior level, or on resolving complex inter-departmental politics, achieving that progress can be a struggle.
What I like about Ashley’s take is that it goes a some way toward attempting to break down functional silos and organise around the customer, aligning the priorities of different teams to something that is ultimately more important than individual department agendas – customer need.
But what would happen if we took this even further? One of the characteristics of companies that have grown up empowered by technology and who have not known a world other than one that is mediated by digital is that they are so focused on retaining agility and innovation at their core as they scale, that they will often structure their business in order to protect it.
The small team approach
We know that small, nimble, often multi-disciplinary teams are fundamental to agile ways of working.
Amazon’s ‘Two-Pizza team’ approach, which entails no team getting larger than the number of people it takes to comfortably feed with two large pizzas, is a structure that is designed for agility, but also one that enables teams to be highly focused on delivering exceptional customer experience against well-defined performance metrics.
As well as real-world examples, there is plenty of research around to show that small teams really do work.
But we still need to bring together functional expertise in a productive way, which is why I really like Spotify’s model of squads, tribes, chapters and guilds:
This structure sees small, nimble teams called ‘squads’ focused on specific elements of user interface, that are in turn grouped together into ‘tribes’ that are aligned to product areas (like Spotify Radio).
Functional expertise is more loosely grouped into ‘chapters’ and ‘guilds’. Specific processes help minimise the potential of inter-team dependencies to slow things down whilst ensuring a cohesive direction and progress. It is, as they describe it, like a matrix organisation but one that is weighted toward delivery.
So what might this look like in the context of Ashley’s proposed structure? Might we organise areas like customer experience, content, insight and data into ‘tribes’ of small, agile teams?
Or might we go further and replicate a model that puts multi-disciplinary ‘squads’ against specific areas of customer experience whilst still tying together functional expertise like analytics or marketing or content through ‘chapters’ or ‘guilds’?
I’m not suggesting that it would be an easy shift for large organisations to transition to this kind of ‘loosely coupled, tightly aligned’ organisational design, but the challenge is this – are we thinking boldly enough?
If you want to see what the extreme of this kind of approach looks like, take a look at the concept of Holacracy, the management system invented by a software engineer that is being adopted by some very forward thinking organisations including Zappos, Medium and consultancies like Undercurrent.
Whilst in SXSW in Austin this year, I saw a talk by the founder of Holacracy, Brian Robertson. He described the almost obsessive focus that the system brings toward eliminating barriers to agility and progress.
A number of the companies that have adopted Holacracy have started with a blank sheet of paper and have arrived at something that looks considerably different to the way in which we traditionally think companies should be structured.
Many of our assumptions that we have about organisational design are derived from a very different, pre-digital world. In an environment characterised by an accelerating pace of change and rapid disruption, perhaps it is time to open up a wider, more challenging debate about how we should be designing organisations for this new world.
For more, Econsultancy publishes a very popular report called “Digital Marketing: Organizational Structures and Resourcing Best Practice Guide” and also offers advice and guidance to companies around the globe on organisational restructuring and digital transformation.