Organizing for Organic Growth

Peter Drucker advised us not to try to predict the future, but to understand and manage “the
future that has already happened”. In the matter of Demand Generation, there is no need for
prediction for we know the future that has already happened.

• Companies are cutting costs and staff, de‐levering their balance sheets and emphasizing
cash flow. A new focus on demand generation from consumers and customers can
quickly bring new resilience and a return to growth.

• For their part, the consumer has changed the way they receive and absorb messages
from brands and businesses. Much conventional advertising, especially broadcast and
print, is becoming increasingly irrelevant to them. They make individual decisions about
brands based on information they receive and feelings they develop via a new menu of
contact points, including their friends and peers (via both in‐person and digital
contacts), the internet (whether in the form of blogs, public commentary, expert
commentary, or “news” in its broadest sense), and what might be termed “brand acts”
(ranging from special packaging to social responsibility o charity and beyond). This
change is completed and it’s irreversible.

• The consumer’s rate of change in this regard is accelerating. Slow companies fall further
behind. Unresponsive companies die.

• In order to grow, companies must find the right way to generate demand from the
changing consumer.

• The demand generation activity in companies that we used to call “marketing” and that
we used to organize around brands and functions can no longer cope with the
consumer’s speed of change nor with the new world of contact points and contextual
relevance.

• The demand generation activity in companies that we used to call “sales” is equally
crippled. The needs of its customers are changing as fast as those of consumers, and
they must find a way to respond faster. Customers find that they are increasingly in
charge in the relationship with suppliers because they have more consumer
information, which is both faster and more detailed, and they are getting better at
turning it into knowledge and actionable insights.
Sub: Organizing for Organic Growth
Date: Jan, 2009
Page 2 of 9

The implication for corporate leadership is ominous… you may not be organized to manage the
future that has already happened. You must re‐think, reconfigure and re‐tool your organization
to serve the consumers’ needs in a new environment where those needs are changing faster
than ever before, and where the contact points, content and context for your offerings must
also be capable of continuous change.

But there’s a lot of good news as well. First, the requirements for successfully competing in the
new environment are reasonably clear. We will spell them out below. Second, the new
externally focused ‘organization’ is likely to have lower fixed cost internal overhead than your
current organization; it will be much more efficient. Third, the new externally focused
organization will be quicker to respond to the rapid changes in the external environment.

The change metaphor for your new demand generation organization is to transition FROM a
field of silos each populated by a lonely crew of experts with a narrow upward line of sight to
their own tiny sliver of the sky, TO a digital, inter‐connected high‐performance network in which
information moves at high speed so that each participant can communicate to all others in the
network and thereby create an accurate shared vision of the consumer’s world and quickly
collaborate to respond with customized solutions.

This white paper discusses the appropriate design approach to the required changes on the
demand generation side of the enterprise.

Collaboration around knowledge and insights

The assets of the modern enterprise are intellectual property rather than physical assets. For
organic growth through demand generation, the key assets are in the form of knowledge about
the customer and the consumer. When this knowledge has been further developed into a deep,
unique and competitively advantaged understanding of consumers’ motivations – why they
behave in the way they do – that is actionable via innovation or improved value propositions or
new ways of engagement, we can classify the knowledge as insights. Consumer insights are the
assets that are the source of organic growth.

The enterprise creates value from consumer insights via collaboration across relevant functions.
For example, let’s say the enterprise develops an insight about the increasing need for lighter
tastes in food and beverage products. The asset has no value until the brand manager points out
how a product development strategy can take advantage of the insight, and the R&D team
translates the strategy into an innovation pipeline, and the research team sets up a new product
evaluation methodology, and the consumer tries the new tastes and comments on them, and
then ultimately manufacturing produces the new product and the sales team commercializes it
with help from communications and promotion agencies. All of these functions must share the
knowledge and insight simultaneously, and collaborate to create value from it.

EMM Group © 2009 2

EMM Group Confidential
Sub: Organizing for Organic Growth
Date: Jan, 2009
Page 3 of 9

One of the new areas of insight that is emerging from many companies’ studies of consumer
behavior is that the contact points between the consumer and the brand – the ways in which
the consumer is influenced to try, buy and be loyal – are changing dramatically. The old “funnel
model” – in which marketers contacted a broad range of consumer to create awareness through
advertising, narrowed the range of contacts to create consideration through matching aware
consumers’ needs to brand benefits, and then refined the contact points to achieve trial through
promotion and pricing and loyalty through distribution and relationship marketing – no longer
applies. A new model is emerging in which consumers make the choice of contact points and
contexts where they are open to brand messages, and then they evaluate the brand offer
through the constantly rotating and interacting lenses of social acceptance, individual role,
personal values, expert knowledge and peer group approval. In essence, they network with
information, social influences and personal perspectives. Their network is always active, buzzing
with information and influences, and ever‐changing.

This is a radical change in consumer behavior, and all companies are finding great challenges in
dealing with it. A major reason for the difficulties they are experiencing is organizational. On the
demand creation side, companies are organized for the old model and this raises barriers to
adapting to the new model.

Towards a new demand‐side organization design

The demand side of the organization remains in process flow mode. Much effort has been
placed behind reproducing the success of the supply‐side efficiency model (process, technology
and metrics) on the demand side. As a result, the consumer/customer is placed at the beginning
of the process. Research teams conduct surveys to gather knowledge which can be turned into
insights. These insights are handed over to product development for further processing into
innovative features that meet consumer/customer needs. Then the communications teams
develop messages to tell consumers about the product and how it fits their need. The process is
linear.

The organizational structure associated with the process is vertical and hierarchical. There is a
research organization, reporting to the head of research and measured by the productivity of
research (number of projects, cost per project and so on). There is a product development team
reporting to a head of development and measured by products launched or improved. There is a
communications team that develops messages, reporting to a head of marketing or of marketing
communications, measured by message effectiveness. Often there is a brand management team
or product management team in a co‐ordinating role, but they are also organized hierarchically.
Organizational designers create something called “horizontal mechanisms” (such as “cross‐
functional teams”) to integrate the activities of the hierarchical groups. These are band‐aids and
can be equally as rigid as the vertical structures.

EMM Group © 2009 3

EMM Group Confidential
Sub: Organizing for Organic Growth
Date: Jan, 2009
Page 4 of 9

To organize in a way that both reflects and operates the new demand generation model
requires a shift as radical as the one the consumer is going through. It requires a change from a
hierarchical and functional model to a network model.

What exactly does that entail? 5 changes must be made in traditional organizational design.

1. The Networked Organization: Push traditional organization structure to the background

and put collaborative networks in the foreground.

2. Replace jobs with roles.

3. Replace job descriptions with expectations and deliverables.

4. Replace linear processes with collaborative technologies.

5. Replace hierarchy with collaboration.

1. The Networked Organization

The organization looks very different when viewed from the perspective of how it drives organic
growth, rather than how it is structured. Traditional vertical hierarchies and specialist functional
job pillars do not create growth; collaboration between people playing roles, sharing consumer
knowledge and utilizing processes and other intangibles is what creates growth. The
collaboration occurs in a network.

The network is centered on the consumer. The consumer provides all the energy in the Demand
Generation network. The consumer provides the first input— information about their needs.
The demand generating enterprise can get this information through research, behavior
observation, analysis of click stream data, or other data. And from this information, the

EMM Group © 2009 4

EMM Group Confidential
Sub: Organizing for Organic Growth
Date: Jan, 2009
Page 5 of 9

enterprise can design the experience the consumer wants, and then configure the business
model to deliver it.

Many functions can be the primary collectors of consumer information. Researchers get it from
surveys and behavioral observation; salespeople get it from retail purchase data and the
primary contact they make with the consumer in sales channels, promoters get it from their
contact with the consumer, product developers get it from product tests. All of these functions
must be networked together to pool the knowledge quickly, flexibly and with shared
responsibility.

Traditional organizations place their hierarchical structure in the foreground to dominate how
work gets done. Bosses instruct subordinates and reporting channels funnel information up and
down the hierarchy. Yet even these traditional organizations have informal networks – people
collaborating with people in project teams, communities of practice and social networks. The
new organizational design formalizes these networks, puts them in the foreground, and creates
work systems to ensure that information flows between the members of the network at speed,
and creating a bottom‐up dynamic to innovation and execution.

2. Replace Jobs With Roles

Roles are defined not as positions in a hierarchy but by interactions with others in a network. A
role is a collaborative concept. In a job, an individual must complete a set of tasks. In a role, a
person must figure out how to work with others effectively to achieve the value creation result.
An individual has one job and one job description, but is called upon to play several roles in
multiple networks. For example, my job may be in sales and my job description may be
appropriate to that function, but I may play several different roles in demand generation:

‐ Role 1: primary knowledge provider – collecting information from observing consumers

at retail and other consumption‐related events and providing it to others in the insights
generation network.

‐ Role 2: customer educator – building customer relationships by taking insights from the
insights generation team and providing value‐added education to customers on how to
build consumer business.

‐ Role 3: primary consumer contact – part of the network that provides information and
offers directly to consumers through various sales and promotional channels.

These roles can be formalized, tracked, managed and measured for maximum productivity.

3. Replace Job Descriptions With Expectations and Deliverables

EMM Group © 2009 5

EMM Group Confidential
Sub: Organizing for Organic Growth
Date: Jan, 2009
Page 6 of 9

In my role, I collaborate with other roles by providing an output that the collaborator requires in
order to perform their role. Research has revealed that the key to the functioning of these roles
is the expectations that others have of the role and the meeting of that expectation. In other
words, roles are interdependent. The meeting of expectations could be called a deliverable —
usually an intangible one. It might be processed information or an analysis; it might be a
strategy that the next role turns into plans and initiatives. It might be emotional support for a
difficult decision. But, most importantly, the deliverable is also interdependent (unlike a job
description, which is individual).

Managing the expectations that the network has of its interdependent roles, and ensuring the
expectations are met via interdependent deliverables, results in high performance of the
organization.

4. Replace Linear Processes With Collaborative Technologies

The application of supply‐side derived process thinking to the demand side of the enterprise has
brought with it some benefits of logic, rigor, repeatability and measurability. However, the
processes that drive the demand side are different from those that drive the demand side.
Supply side processes are transactional, and can be automated and then refined via six sigma
and other metrics. Demand side processes are collaborative, and involve qualitative, non‐linear
human interactions around consumer knowledge. There are technologies that can facilitate this
collaboration, ranging from wikis to blogs to social networking, search and new forms of global
meeting place technologies. New organizational tools like talent marketplaces can direct the
right resources to the highest priority projects. Companies must both ensure that their own
employees are fully networked using these collaborative technologies, while at the same time
ensuring that consumer feelings, behaviors and attitudes are being monitored with these
technologies and insights are being generated, evaluated and shared.

5. Replace Hierarchical Behavior With Collaboration.

The organizational implication of the collaborative nature of roles— and the exchange of
knowledge and other intangibles between roles—is that accountability is horizontal. By way of
contrast, in the conventional organizational hierarchy, accountability is vertical. You are told
what to do by your boss and your boss assesses whether you performed the defined task
satisfactorily. In the collaborative network of roles, accountability is horizontal – to other people
who require deliverables from you. Accountability changes from an assessment of your
performance by a superior to an objective measurement of whether your role delivered value or
not.

Demand Generation: a specific kind of network to drive organic growth

EMM Group © 2009 6

EMM Group Confidential
Sub: Organizing for Organic Growth
Date: Jan, 2009
Page 7 of 9

The most important organic growth network in the enterprise is Demand Generation. Without
demand there is no growth. Without increasing demand, there is no continuous improvement.
With Demand Generation we see the continuous, seamless linkage among the consumer,
Marketing, Customer Management, R&D and Product Development. Feedback from the
consumer and the market provides the R&D team with the data it needs to create and develop
new products. Similarly, feedback about the logistical needs of the customer is information that
Operations uses to improve service. These activities – the exchange of information to improve
deliverables – create growth.

To design a modern Demand Generation network, start by defining the key roles, then ensuring
they have the right knowledge to share among the roles, the right processes for sharing and the
right enabling technology.

The key roles in the Demand Generation Network are:

The consumer

Make sure that your organization is able to generate and receive consumer information from all
possible contact points. This means that multiple functions within the enterprise can share
responsibility for generating consumer knowledge, so long as they also collaborate on turning
the knowledge into insights and acting on the insights. At minimum, the Brand or Product
Management, Consumer Research and Sales functions must be organized for boundary‐less
networked collaboration around consumer information collection and processing.

Insights Generation

Consumer data is turned into knowledge, understanding and insights by the Insights Generation
role. It now has more value because it can be passed on as a deliverable from the analytics role
to the innovation role. Insights Generation is a process and a networked activity because the
360 degree perspective of multiple functions produces a better insight result and does it faster.

Insights to Innovation

Innovation is the translation of consumer insights into new solutions to meet customer needs.
Here, consumer knowledge might be combined with scientific knowledge to create new
products, or with historical information and external information to create new patterns and
solutions. The network approach ensures that all the creative, analytical and operational skills
of the enterprise are fully combined for a winning innovation capability.

Consumer Strategy

Strategy is the development of ways to get innovation to the consumer to provide a better value
proposition than the consumer can get from current offerings, whether from our company or

EMM Group © 2009 7

EMM Group Confidential
Sub: Organizing for Organic Growth
Date: Jan, 2009
Page 8 of 9

competitors. Strategy includes selecting the best consumers (via segmentation) and finding the
right ways to serve them (via personalization at the contact points they select for themselves).
Often, corporate strategy, brand strategy and sales strategy are not networked, resulting in
inefficiencies and roadblocks that a networked organization can overcome.

Consumer Engagement

Engagement is the implementation of the dialogue with the consumer which enables the
company to communicate and to listen, and to involve the consumer in interaction with the
brand – i.e. they actually make a positive decision do something – participate in a promotion, try
a new offering ‐ to confirm their interest. This is one of the fastest changing areas of enterprise
capability, and so needs the network characteristics of speed of information sharing and
collaborative design of new solutions more than any other.

Integrating the Marketing and Sales Organizations

We are often asked about the pros and cons of integrating the Marketing and Sales functions in
the new Demand Generation network organization. A feature of the roles listed above is that
none of them contain the words Marketing and Sales in their definitions. And yet every one of
the roles can be legitimately staffed with individuals with the skills and experience that they
developed in the old model functions of marketing or sales or both. We recommend that you
abolish the words “marketing” and “sales” in function descriptions and job descriptions and
replace them with roles that reflect their actual purpose, such as Brand Building, Customer
Relationships, or even Growth.

Steps you can take to implement the Network Model for Demand Generation tomorrow

A practical aspect of the Demand Generation network is that it can be implemented without
first having to blow up the existing functional hierarchy. You can use the current organization
chart as a source for staffing the Demand Generation network.

Start by identifying a growth project that needs new organizational impetus. It could be the
launch of a new brand, business or service that has special characteristics. Or it could be a
business turnaround project in an individual country. Put a growth leader in charge of the
project, and charge that leader to build the organizational network by following these simple
steps:

‐ Define the goals (numbers)

‐ Identify the required roles

‐ Staff the required roles with the right talents and skills

EMM Group © 2009 8

EMM Group Confidential
Sub: Organizing for Organic Growth
Date: Jan, 2009
Page 9 of 9

‐ Apply the collaborative processes that enable the roles and provide the tools to make
them work

‐ Define the deliverables from each role to collaborators

‐ Define the mode of collaboration (team meetings, digital collaboration, etc)

If you are unsure whether you have all the required components, have the leader conduct a
growth audit to identify gaps, bottlenecks and give the leader the authority to use the network
to fix them.

Within a short time period, you can have elements of a success model that is expandable and
repeatable.

EMM Group © 2009 9

EMM Group Confidential