Analysts caution that centralization should not be seen as an organizational panacea.

Sixty per cent of marketing organizations have centralized some or all their functions, according to a survey by Gartner, Inc. Chief marketing officers (CMOs) cited operational excellence issues — such as prioritization, workflows, and collaboration — as the primary reasons for making changes to their organizational structures.

Gartner surveyed more than 380 marketing and communications leaders in the U.S., Canada, France, Germany, and the U.K. from November through December 2021, to explore both the marketing and communications team’s function design, and its relation to other functions in the organization and to external partners. The findings show that the pace of centralization has quickened in comparison to previous years, with CMOs significantly shifting their organizations in the last year to centralized structures, with 37 per cent fully centralized and 23 per cent mostly centralized.

“CMOs may be lured by the promise of greater control and economies of scale that centralization offers, but each structure brings with it a set of benefits and drawbacks,” said Sally Witzky, senior director analyst in the Gartner Marketing practice. “CMOs must place organizational decisions in the strategic context, making trade-offs based on restructuring objectives, capability gaps and cultural realities.”

The survey findings also show a slight distinction between B2B and B2C marketing organizations. While B2B marketing organizations favour and utilize a balanced or hybrid structure approach, B2C organizations are primarily centralized. In fact, CMOs in B2C organizations doubled down on a “fully” centralized structure over “mostly” centralized.

“This is because B2C organizations are primarily consumer-driven,” said Witzky. “They tend to work with and depend upon a roster of external agencies for the brand or individual brands, and as a result tend to have a more centralized marketing. However, B2B organizations are embracing a new emphasis on buyer centricity and are changing their marketing organization structures to gain some centralized control and process.”

Gartner experts said CMOs should consider whether it’s easier to centralize some of the marketing work that is decentralized or mine those decentralized areas for waste, inefficiencies, duplication and individuals or small teams who work in silos — then make changes accordingly. To successfully facilitate this, Gartner recommends the following steps:

• Gauge stakeholder understanding of problems and openness to change – Understand how stakeholders feel about the problems that are necessitating a marketing restructure and get buy-in.
• Diagnose the need to restructure and identify priorities – Clarify the vision and goal(s) of the restructure, along with the structure priorities they’ll follow to reach them.
• Design the best-fit marketing organization – Conduct a design workshop to map out the new marketing organization structure that best fulfills the reorg vision and goals, while remaining grounded in how work happens.
• Announce the plan and prepare for the change – Prepare to deliver a presentation highlighting change drivers, restructure objectives and the proposed marketing structure, and discuss rollout objectives with all affected parties.
• Monitor rollout and collect feedback – Build in feedback loops to identify unexpected areas of friction in the new structure and make team-level interventions to address them.

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