Creating a Market-driven Structure
A core of smart engineers had founded a company based on solving a market need with a ingenious, simple and affordable product. Over 10 years the company grew rapidly. Engineering and customer service became hallmarks. Vigorously selling products and responding to every customer request were paramount.
However, when I arrived as the new organizational and communication executive, I realized that the company had lost sight of what had made – and was needed to make – its business successful. I set out to coax management to rethink and restructure the company to be truly market-driven and not customer-reactive.
- Raising awareness that two legs of a successful business — doing the business (production and selling) and managing the business — may be strong, but the third leg — getting business (marketing) – was weak.
- Convincing management to separate marketing from sales.
- Demonstrating that what the company thought was customer service was actually customer-reactive.
- Recommending restructuring of disciplines unfamiliar to me.
I facilitated several strategic planning sessions with senior management over a month, from which they committed to devoting considerably more attention to anticipating market expectations than exclusively selling current products.
Given that commitment, I then recommended hiring a senior-level marketing professional reporting to the CEO rather to the head of sales. I wrote the job description based on my long experience with (but not in) marketing. The CEO agreed with the recommendation, lightly edited the job description, and hired a savvy marketer from the industry.
Next, I knew that the approach to product development had to change. Rather than, for example, catering to individual customer wishes for non-essential features (customer-reactive and unprofitable), the company needed a process that would identify and translate emerging market trends into well-engineered products, which would then make customers’ products more marketable and profitable.
The process I recommended for moving from market trend to product delivery would work as follows:
- Marketing would research and channel market trends into product ideas.
- The Technology group would then evaluate Marketing’s ideas against the latest and emerging technologies as well as internal human resources, and recommend the technology path.
- Engineering would assess the scope of the development project, define features from a build perspective, and refine the process.
In short, Marketing would identify, Technology qualify, and Engineering specify.
More than passing a baton from one group to the next, the effort would be collaborative and would prevail throughout the development and production stages to ensure that each group’s requirements were being met or periodically revised, as needed.
Something was missing in the chain between engineering and marketing, I thought. Again, although having worked for years with engineers and yet not being an engineer, I had to educate myself quickly on engineering processes.
But it was company engineers who identified the problem. There was a gap between business needs and engineering requirements. We agreed that someone had to translate marketing objectives into engineering terms and, conversely, engineering realities into marketing priorities.
A Systems Engineering function was needed to fill the gap.
Senior management, once again, agreed. However, while the company had engineers with some Systems knowledge, no one in the organization was equipped to build a solid Systems Engineering function.
Fortunately, the company had retained a semi-retired, highly respected engineer as a general advisor. I suggested tapping his expertise to shape the function and, most importantly, identify and recommend someone to run it. For some period of time after hiring the person, a solid line would run to the EVP Engineering with a dotted line to the consultant. Once a leader was found, the dotted line would go away.
The CEO and management team showed impressive flexibility and openness. My recommendations succeeded because of that attitude and because I was able to stay objective and put all recommendations in the context of growth.