IN THE SPOTLIGHT
How CMOs Can Build an In-House Agency for Optimal Efficiency and Effectiveness
The external agency model typically follows a hierarchical structure with functional silos. Work moves from one silo to the next–from account services to planning to creative to production, for example.
Each silo becomes hyper-focused on its internal process for maximum efficiency and quality. While this may sound beneficial, there's little consideration for how decisions in one silo may impact another down the line, limiting effectiveness. Increasing the risk of re-work slows the delivery of high-quality creative that drives business results.
CMOs should care because even as they've brought more work inside the organization–many modeled their in-house agency after the structure found among traditional external agencies. Consequently, they've merely relocated the very inefficiencies they sought to eliminate.
Volume of Creative Work Grows
Research shows most in-house teams handle more than 75% of their business' creative needs, yet challenges facing in-house creatives haven't changed in the last few years. Velocity, volume and variety of creative work continue to increase yearly.
In-house agencies must organize for optimal efficiency and effectiveness. As a CMO, your solution is to rethink how your organization should operate based on the results you need to deliver. That includes moving away from traditional siloed models to employ small cross-functional teams focused on a unified goal. The small-team model promotes better and speedier collaboration and a shared understanding of the work, accelerating the delivery of creative services.
Roots of the Traditional Model
To understand the current tendency for organizing in-house teams, we must understand the origin and purpose of the traditional agency structure.
Most businesses today—traditional agencies included—use a hierarchical model born from the industrial revolution. The philosophy at the time called for breaking down long manufacturing processes into subprocesses to mass-produce products more efficiently.
Since industrial work is mechanical and repeatable, collaboration was unnecessary because every handoff in the workflow was standardized: nothing changed over long periods.
This model is fitting for producing things in a predictable environment, but it's ill-suited for today's “knowledge work” and ever-evolving market. Knowledge work requires the sharing of ideas, insights and opinions from a variety of viewpoints. Our unpredictable market requires adaptability and speed to market. For this reason, creative and marketing disciplines necessitate quick cooperation to develop, iterate and improve innovative, integrated and responsive marketing campaigns.
6 Considerations for Remodeling the In-House Agency
Creatives and marketers need an organizational structure that supports the agility to adapt to new conditions efficiently. Cross-functional teams bring together the requisite structure for this to happen.
The precise composition of a cross-functional team varies based on the organization. However, there are some common steps that you can take to determine what will work best for your marketing team.
1. Assess the most common categories of creative work.
Start by assessing the volume of different creative work you deliver to establish a baseline for what the business demands. Many in-house creative departments already do this to some degree with tiered categories. The lower tiers of work tend to represent strategic work where creative concepts still need to be devised. Higher-level tiers usually include adapting deliverables, such as modifying the format of an existing banner advertisement.
2. Analyze outcomes from each category of work.
Analyze the outcomes you want each category of work to produce for stakeholders and customers. The goal should be internal alignment for how creative work should generate value for the business. It fosters the creation of teams that are focused on delivering value through the outcomes they can produce, not the outputs they create.
3. Identify the inputs and assess skills.
Map out the skills and experience needed to produce the outcomes from each category of creative work. This step is critical because when you form your teams, the goal should be to include all of the skills the team needs to complete a deliverable from start to finish natively. If they have to go outside of their group, it creates a dependency on other individuals, which slows workflow. Skill mapping limits these types of dependencies.
[Related: Download our report, "Reshaping Global Engagement Operations" here]
4. Design your teams based on the findings.
At this point, you should have what you need to begin designing your teams. For example, if as a marketing organization you need to produce a high volume of leads (outcomes) through landing pages (outputs), you'll need a copywriter, a designer, a developer and an analytics person on the cross-functional team.
Cross-functional teams can be as small as two people, or as many as 20. Keep in mind the larger the team, the harder it becomes to manage communication. Why? The lines of communication increase exponentially with every additional team member.
5. Prepare for cultural change.
In contrast to a hierarchical model, the business should trust cross-functional teams to analyze and react to real-time information based on their expertise. The collaborative nature of the model allows them to quickly rally around problems and opportunities as a team so they can quickly arrive at a sound decision for what to do next. And they have pre-defined decision-making rights for moving forward without approval so the organization can reap the full benefit of their skills and abilities.
For this approach to work, organizations need to redefine their managers' roles to be less authoritative and more about supporting the team to do their best work. Specifically, mid-level managers can be the largest source of resistance–or the most prominent champions of this shift. Mid-level managers can uncover and remove bottlenecks, identify other opportunities to improve and enhance the sense of team and esprit de corps.
6. Start with small wins and build momentum.
It's best to introduce this new model with a pilot team and selecting the right people to join that team is pivotal. You should assemble a group of individuals who will be most receptive to, and interested in, experimenting with new ways of working; they will be more likely to work at making the model a success. In turn, their case study will breed internal support and momentum toward broader change. As others see it working, they'll become more likely to opt-in.
Optimal Structure; Optimal Efficiency; Optimal Effectiveness.
Absorbing new roles and integrating talent into an existing organization is one of the most challenging of leadership roles. Indeed, CMOs have invested a tremendous amount of resources and political capital into in-housing initiatives. It's in everyone's interest: the business, the team, and the CMO, to identify the optimal organizational structure that enables teams to function with optimal efficiency and effectiveness.
Brian Kessman has 20+ years of experience working within award-winning full-service, interactive, and brand strategy agencies and with in-house teams. As the Head of Business Strategy for inMotionNow, and the founder of Lodestar Agency Consulting, he helps marketing and creative leaders thoughtfully redesign their organization and culture to thrive in our rapidly evolving industry.