XT … The Future Marketing Organisation (by Razorfish)

During the 1980s, Rosalia Mera, co-founder of the Spanish apparel retailer Zara, was instrumental in pioneering a concept known as fast fashion. Unlike its competitors, who regularly require six months to get new designs to the retail oor, Zara often does it in two weeks—a feat it has achieved through innovative supply chain practices driven by senior management’s empowerment of teams in local markets to make rapid decisions. Using its think global, act local approach, Zara now operates in 88 countries with four times the pro tability of its primary rivals.

After Mera became the world’s wealthiest self- made businesswoman, she was often asked about the secret to her success. Her response typically began with a story about the day she decided to rip up her detailed three-year plan, explaining that in her sector, predicting future challenges wasn’t practical, or even possible. Searching for an alternative technique, she was inspired by Jack Welch, who believed that business performance was better served by building an organization with the agility to respond to change faster than competitors.

New Models for Marketing

Leading marketing organizations are characterized by collaboration, solving customer problems with cross-functional, multidiscipline teams. But while the leader of such a team is responsible for a team goal, his or her team members often still pay allegiance to their home silo. For team managers, this creates the now-famous “responsibility without authority.”

Recognizing the problem, we’ve created new roles, such as that of marketing program manager. Now, team members have hard-line reporting to such a manager (with a dotted line to their functional manager) as long as they are on assignment to that PM.

This technique of adding leadership capacity by tapping into cross-functional teams drawn from the middle (versus the top rungs of the organization) has proven e ective at improving performance without adding head count (albeit as a technique, it has been limited to sectors such as professional services and technology).

Leadership Networks and Agility

The need to manage faster and with greater agility in harnessing technology for business advantage has given rise to an organizational concept
known as leadership cells, which collectively form leadership networks. This thinking stems from the argument that cross-discipline teams, closest to the problem or opportunity (with the most relevant experience) are best equipped to address it. Such cells, composed of one or two people or as many as seven or eight, form around speci c tasks, ideas or opportunities.

Marketers Adopt Learnings from the US Navy SEALs

The concept of leadership cells originated from the US military, the most dramatic example being the US Navy SEALs: highly trained, cross-functional, cross-discipline teams, empowered to make rapid decisions, even changing strategies on the y, once they’ve assessed a situation. When such teams form, two leadership types tend to emerge: the task leader, who is good at getting things done, and the social leader, who is good at using diplomacy and social connections to help crush the issues that get in the way of getting things done.

Leadership Networks from GE to Google

Effective leadership networks depend on strong leaders at the top who articulate a strong vision and a bold strategic intent. Senior leaders at General Electric, early disciples of leadership networks, still say the company will be number one or number two in each of its businesses, or it will not be in that business. This strategic intent translates into decision-making criteria for its leadership networks.

We found a similar situation at Google (another believer in leadership networks), where leaders articulate ve values: simplicity is everything, attract beginners but engage experts, design for the world, dare to innovate, and delight the eye without distracting the mind. These values translate to decision-making criteria for Google’s leadership networks.

Proponents of Holacracy. Push the Envelope Even Further

Principles from leadership networks were used to form the foundation of a new organizational movement known as holacracy. Proponents of this movement argue that companies in rapidly changing industries must respond to new opportunities faster than competitors in order to sustain business advantage. Of course, they have to see these opportunities coming in the rst place, something they say hierarchy discourages, because it prevents open thinking.

That’s why at companies like Zappos, one of the most vocal advocates of holacracy, you won’t see enclosed o ces, rather open spaces where everyone has the same size desk. Other pioneers
of holacracy have gone so far as to eliminate titles such as EVP, SVP and even VP, saying they are relics from an irrelevant corporate aristocracy.

But Holacracy Is Not a Panacea

Proponents of holacracy admit cross-functional, multidiscipline teams drawn from the middle come with their own dysfunctions (the most common being endless conversations that don’t lead to decisions). Hence, leadership training to teach people the art and science of strategic decision- making often accompanies holacracy. For example, leaders are taught how to identify strategic options, then lay out the relative trade-o s of each option in an objective, nonemotional way.

New concepts, such as leadership networks and holacracy, that empower mid-level teams are new for most business leaders. In fact, some of you may be hearing about these concepts for the rst time. But if we are to keep up with the demands of a new type of digital economy, where change waits for no one, we must consider new organizational design concepts for two big reasons: to move faster, and to contain organizational complexity.

Competing with Speed Is No Longer Optional

Mastering speed has always been an enviable competitive capability. And in today’s digital economy, speed is the new normal. But many sectors are nding that competing with speed
isn’t just used to gain a business advantage, it is required to sustain even basic competition. Hence, remodeling the organization for agility and speed has rapidly climbed to the top many CEO agendas.

As the economy expands horizontally as a result of connectivity, we risk even more horizontal expansion of our organizations. The resulting complexity slows us down, leaving us prey to more nimble competitors.

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