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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.

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