From Silos to Synergy—Harnessing the Organization Chapter Fifteen From Silos to Synergy—Harnessing the Organization Copyright © 2010 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express written permission of the copyright owner is unlawful. Requests for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages, caused by the use of these programs or from the use of the information contained herein. Chapter 15 - Organizational Issues

Strategic Market Management 7th Edition – David Aaker The Silo World Product Silos Country Silos Functional Silos HDTV Copiers US France Sales Advertising Projectors Medical Imaging Far East Africa Sponsorship Digital Chapter 15 - Organizational Issues

Strategic Market Management 7th Edition – David Aaker Silo-Driven Problems Misallocation of marketing resources Silo-spanning brands lack clarity & linkage Silo-spanning offerings & programs are missed or mishandled Marketing management competence is diffused Success is not leveraged across silos Communication and cooperation weak Chapter 15 - Organizational Issues

A Framework for Analyzing Organizations People Structure Systems Culture External Analysis Strategy Internal Analysis Performance Chapter 15 - Organizational Issues Figure 15.2

Obtaining Information about Organizational Components Structure What is the organization’s structure? How decentralized is it? What are the lines of authority and communication? What are the roles of task forces, committees, organizations, or similar mechanisms? Chapter 15 - Organizational Issues Figure 15.3

Obtaining Information about Organizational Components Systems How are budgets set? What is the nature of the planning system? What are the key measures used to evaluate performance? How does the accounting system work? How do product and information flow? Chapter 15 - Organizational Issues Figure 15.3

Obtaining Information about Organizational Components People What are the skills, knowledge, and experience of the firm’s employees? What is their depth and quality? What are the employees’ expectations? What are their attitudes toward the firm and their jobs? Chapter 15 - Organizational Issues Figure 15.3

Organizational Culture Shared Values Norms of Behavior Organizational Culture Symbols and Symbolic Action Chapter 15 - Organizational Issues Figure 15.3

Obtaining Information about Organizational Components Culture Are there shared values that are visible and accepted? What are these shared values and how are they communicated? What are the norms of behavior? What are the significant symbols and symbolic activities? What is the dominant management style? How is conflict resolved? Chapter 15 - Organizational Issues Figure 15.3

Silo Spanning Objectives Strategic Market Management 7th Edition – David Aaker Silo Spanning Objectives Dysfunctional objectives Centralize Standardize Reduce the number of divisions or agencies Appropriate objectives — to improve Silo-spanning programs & offerings Brand consistency & linkage Resource allocation Marketing competence Communication & cooperation Chapter 15 - Organizational Issues

The CMO—On Getting Traction Get the CEO on Board Get the right people Cross-silo teams Get easy wins Be facilitator/consultant Engage the business units Deliver excellence Balance central opportunities with local needs Chapter 15 - Organizational Issues

Overview of Strategic Market Management Chapter 15 - Organizational Issues

Strategic Market Management 7th Edition – David Aaker A Business Strategy Where to Compete The product-market investment decision A Business Strategy How to Compete Value Assets & Function area proposition competencies strategies and programs Chapter 15 - Organizational Issues

Overview of Strategic Market Management External Analysis Customer Analysis Competitor Analysis Market/submarket Analysis Environmental Analysis Internal Analysis Performance Analysis Determinants of strategic options Strategic Analysis Outputs Strategy Identification, Selection, and Implementation Chapter 15 - Organizational Issues

Strategy Development: A Discussion Agenda Customer Analysis Who are the major segments? What are their motivations and unmet needs? Chapter 15 - Organizational Issues Figure 15.5

Strategy Development: A Discussion Agenda Competitor Analysis Who are the existing and potential competitors? What strategic groups can be identified? What are their sales, share, and profits? What are the growth trends? What are their strengths, weaknesses, and strategies? Chapter 15 - Organizational Issues Figure 15.5

Strategy Development: A Discussion Agenda Market Analysis How attractive is the market or industry and its submarkets? What are the forces reducing profitability in the market, entry and exist barriers, growth projections, cost structures, and profitability prospects? What are the alternative distribution channels and their relative strengths? What industry trends are significant to strategy? What are the current and future key success factors? Chapter 15 - Organizational Issues Figure 15.5

Strategy Development: A Discussion Agenda Environmental Analysis What environmental threats, opportunities, and trends exist? What are the major strategic uncertainties and information need areas? What scenarios can be conceived? Chapter 15 - Organizational Issues Figure 15.5

Strategy Development: A Discussion Agenda Internal Analysis What are our costs, strategy, performance, points of differentiation, strengths, weaknesses, strategic problems and culture? What is our existing business portfolio? What has been our level of investment in our various product markets? Chapter 15 - Organizational Issues Figure 15.5

Strategy Development: A Discussion Agenda Product market investment—exit, milk, maintain, grow/enter What assets and competencies will provide the basis for an SCA? How can they be developed and maintained? How can they be leveraged? Chapter 15 - Organizational Issues Figure 15.5

Strategy Development: A Discussion Agenda Product market investment—exit, milk, maintain, grow/enter What assets and competencies? How can they be developed, maintained, leveraged? What value proposition? What functional strategies? Chapter 15 - Organizational Issues Figure 15.5

Strategy Development: A Discussion Agenda Customer Analysis Who are the major segments? What are their motivations and unmet needs? Chapter 15 - Organizational Issues Figure 16.5

Strategy Development: A Discussion Agenda Customer Analysis Who are the major segments? What are their motivations and unmet needs? Chapter 15 - Organizational Issues Figure 16.5

Strategy Development: A Discussion Agenda Competitor Analysis Who are the existing and potential competitors? What strategic groups can be identified? What are their sales, share, and profits? What are the growth trends? What are their strengths, weaknesses, and strategies? Chapter 15 - Organizational Issues Figure 16.5

Strategy Development: A Discussion Agenda Market Analysis How attractive is the market or industry and its submarkets? What are the forces reducing profitability in the market, entry and exist barriers, growth projections, cost structures, and profitability prospects? What are the alternative distribution channels and their relative strengths? What industry trends are significant to strategy? What are the current and future key success factors? Chapter 15 - Organizational Issues Figure 16.5

Strategy Development: A Discussion Agenda Environmental Analysis What environmental threats, opportunities, and trends exist? What are the major strategic uncertainties and information need areas? What scenarios can be conceived? Chapter 15 - Organizational Issues Figure 16.5

Strategy Development: A Discussion Agenda Internal Analysis What are our costs, strategy, performance, points of differentiation, strengths, weaknesses, strategic problems and culture? What is our existing business portfolio? What has been our level of investment in our various product markets? Chapter 15 - Organizational Issues Figure 16.5

Strategy Development: A Discussion Agenda Product market investment—exit, milk, maintain, grow/enter What assets and competencies will provide the basis for an SCA? How can they be developed and maintained? How can they be leveraged? Chapter 15 - Organizational Issues

Strategy Development: A Discussion Agenda Product market investment—exit, milk, maintain, grow/enter What assets and competencies? How can they be developed, maintained, leveraged? What value proposition? What functional strategies? Chapter 15 - Organizational Issues

Growth Strategies Energize the business Leverage the business Enter new business product/markets Go Global

Why Strategic Market Management? Strategic Market Management 7th Edition – David Aaker Why Strategic Market Management? Precipitate the consideration of strategic choices. Help a business cope with change. Force a long-range view. Make visible the resource allocation decision. Aid strategic analysis and decision making. Provide a strategic management and control system. Provide both horizontal and vertical communication and coordination systems. Chapter 15 - Organizational Issues

Key Learnings The organizational levers are structure, systems, people, and culture. Each must be congruent and support the business strategy. Decentralization with powerful silo groups can inhibit synergy and efficiency. For marketing, it leads to misallocation of resources, confused brands, inhibited cross-silo offerings and programs, weak marketing staffs, the failure to leverage success, and inadequate cooperation and communication. In dealing with the problem CMOs should consider nonthreatening roles such as facilitator or consultant and should do not have as an objective to centralize and standardize. The organizational structure lever provides the option to centralize selectivity, use teams and networks, use matrix reporting structures, and to employ a virtual organization. Chapter 15 - Organizational Issues

Key Learnings Management systems involves the information, measurement and reward, and planning systems that can all promote cooperation and communication. People on the CMO team, who can be sources internally or externally, need to be knowledgeable and marketing, brands, markets, products, and the organization in addition to being strategic and serving as change agents. Culture involves shared values, norms of behavior and symbols and symbolic action. The CEO is a key drive of strategy and it is important to get him or her on board. The fit between components is illustrated by the hit-industry topology, which contrasts the functions of drillers (who develop products), pumpers (who focus on production), and distributors (who specialize in marketing and distribution). Chapter 15 - Organizational Issues

Ancillary Slides Chapter 15 - Organizational Issues

“All progress is initiated by challenging current conceptions and executed by supplanting existing institutions.” - George Bernard Shaw Chapter 15 - Organizational Issues

“Structure follows strategy.” - Alfred Chandler, Jr. Chapter 15 - Organizational Issues

“Those that implement the plans must make the plans.” - Patrick Hagerty, Texas Instruments Chapter 15 - Organizational Issues

“There is nothing more requisite in business than dispatch.” - John Addison Chapter 15 - Organizational Issues

“This report, by its very length, defends itself against the risk of being read.” - Winston Churchill Chapter 15 - Organizational Issues

“If I had to sum up in one word what makes a good manager, I’d say decisiveness. You can use the fanciest computers to gather the numbers, but in the end you have to set a timetable and act.” - Lee Iacocca Chapter 15 - Organizational Issues