Marketing Center of Excellence
6 Step Implementation Guide
- A Marketing Center of Excellence leverages and scales scarce and high-demand skills across the organization. The intent is to dedicate specialized resources and share their skills across the organization to achieve a force multiplier performance effect.
- The goal is to shift from business as usual to break-out revenue results. Many times, that means advancing from operational mediocrity to Best-in-Class marketing performance achievements.
- Designing and implementing a Marketing Center of Excellence is best done with a 6-step framework, illustrated in this post.
A Marketing Center of Excellence
We know when a Marketing Center of Excellence is properly defined and designed it can achieve breakthrough revenue performance and realize double digit marketing ROI.
These specialists identify innovation opportunities, disseminate customer insights, standardize best practices for wide scale execution, and evaluate and plan marketing technology (MarTech) adoption. They apply deep expertise to manage programs that increase their revenue contribution to the company.
Even a relatively small group of specialists can provide governance, change how work gets done and deliver consultative services to internal stakeholders. They can disseminate know-how, lessons, and recommendations to the broader organization and achieve a force multiplier impact.
But how exactly do you stand up a Marketing Center of Excellence?
Our research and experience have contributed to a Marketing Center of Excellence design and implementation framework, shared here.
A Marketing Center of Excellence Implementation Framework
The right Marketing Center of Excellence (CoE) starts with the right Target Operating Model. Each of the 6 components is essential to sustained success.
Start with a Strategy and Roadmap
Many marketing organizations are not designed to leverage change, innovate or disrupt their companies or markets. That's why a strategy and roadmap are needed to define and navigate the path.
The strategy will define how the CoE will better apply scarce skills to improve revenue and ROI. It will identify how experts apply technologies to propel marketing programs and improve customer and business outcomes.
It should show what a successful CoE looks like. And how it accelerates or improves marketing's most important objectives. That may include things like increasing lead acquisitions, converting more leads into sale opportunities, driving more marketing sourced revenue for the company, expanding brand reach and impact, and growing ROI.
The strategy shifts execution from individual efforts or reactive responses to defining a sequence of activities that lie on the most direct route to the biggest uplift.
The best strategies are not made of wandering verbiage or delivered as a document that gets a cursory review and filed away.
The best strategies are execution-driven roadmaps. They show what must be done and how each effort contributes to the next. Our experience in implementing CoEs with clients has shown that a strategy blueprint is often the simplest and most effective tool for realizing the most important goals. An example is shared below.
This approach is particularly effective in focusing effort on the things that produce the outcomes that most matter and avoids wasting time with activities that don't.
Another method to craft a successful CoE strategy and roadmap in short order is a Design Thinking workshop.
Design thinking is an iterative, people-focused design method that applies deep empathy for staff and collaboration among multi-disciplinary teams. It's both fast and effective in identifying the highest impact and most important CoE success criteria.
Regardless of design method, the roadmap should link strategy to execution and calibrate the CoE investment with its forecasted payback.
Be clear that no CoE is sustainable unless it can link its performance improvements to financial results and show a positive return to the company.
As the saying goes, 'well begun is half done.' Crafting the right CoE strategy and roadmap is both the fastest task among the 6 steps and the step that most drives the CoE to sustained success.
Define the CoE Core Competencies
Marketing Center of Excellence core competencies are the unique capabilities driven by expert resources to create differentiation, competitive advantages and breakthrough performance.
CoEs focus on one or more specific competencies. These capabilities should solve for the customer and align with the customer journey. They should be led by objectives and measured by outcomes. They should optimize resources, processes and technology to achieve synergistic results. Because when they do all these things, they will go well beyond normal performance to achieve extraordinary outcomes.
There's a tradeoff to consider. Competencies are symbiotic, so more competencies will deliver a higher impact than fewer. However, adopting more competencies than you can fully resource will dilute effectiveness for each and for the CoE.
The previously discussed roadmap will define the optimal order of competencies and show how adoption of early competencies will deliver the biggest financial uplift and provide a jump start to later competencies. Done right, each competency will jump start the next and increase the ROI for the CoE.
Core competencies are typically organized into key functions or domains. Below is an example of a CoE and its core competencies we stood up with an industrial company.
Recognize it's not an org chart of marketing functions. It's a CoE showing those areas that highly skilled staff will optimize to achieve world class results.
Below are some examples of Marketing Center of Excellence core competencies.
- MarTech is the most common CoE competency and the only one for some. MarTech has evolved at internet speed. Many technologies can significantly improve lead volumes, customer acquisitions and revenue growth. But they can be complex, so a specialist approach makes sense. Technical CoE resources design a MarTech stack to improve process automation, information reporting and scale. They then disseminate software capabilities to expand the reach and benefits of advanced technologies throughout the organization. This competency aids every other.
- Data and Analytics is the second most common. Data and application architects figure out how to convert data to insights and deliver it to the person or customer interaction point where it can be applied. They figure out how to distill large volumes of data, synthesize information from multiple sources and deliver the most compelling information in easy to understand and visual presentations. They apply expert skills to use Artificial Intelligence (AI) to deliver next-best-offers, next-best-actions or other recommendations at the exact time and place they can be applied. CoE analytics often include closed loop reporting, predictive analytics and AI algorithms. However, analytics is itself a broad category, and as Gartner advises it's smart to put a tight scope around analytics and reporting.
- Demand generation is a competency focused on acquiring more sales-ready leads for the salesforce and growing marketing sourced revenue for the company. CoE skills bring benchmarks and innovation to individual campaigns and conversion optimization lessons to dynamically adjust the campaign portfolio mix.
CoE staff may apply advanced techniques and technologies to better manage complex campaign portfolios or improve sales lead conversions. They may apply new methods to pursue new customer acquisitions or grow existing customer lifetime value. And as with any competency, the key is to prioritize based on what delivers the biggest financial uplift.
- A Brand development competency will improve brand identify, expand brand reach and amplify company messaging. It will deliver a big impact on new customer conversions and customer growth, and an even bigger improvement to marketing sourced revenues. One of the reasons more CMOs are choosing to add brand development programs to the CoE is to respond to the rise of consumer technologies, more informed and empowered customers and the shift in power from vendors to customers. As McKinsey advises, "As consumers become more digitally empowered, brand messages lose their impact, and the likelihood of conversion decreases." Companies no longer yield control in determining their brands. That control is being ceded to customers and broadcast in online and social channels. So, companies must respond with new tools and innovative techniques to protect and advance their brands.
Select the Right Operating Model
Many CMOs exploring a new CoE ask, "What is the best Marketing Center of Excellence operating model?" But that's not really the right question. Because the best model is based on your maturity and therefore evolves over time.
There are many CoE operating models but the three most popular are centralized, hybrid and federated.
Your choice of an operating model will determine the extent of your performance outcomes. However, your choice is less about choosing the best model and more about pursuing a progressive sequence where each model builds on the prior and delivers higher revenue contribution and ROI.
Centralized Operating Model
This model uses a central corporate team to serve all marketing groups.
Its goal is the efficient delivery of advanced skills across the organization.
This model is common for new CoEs. It can be an effective starting point while the CoE acquires its resources and skills and develops its mission, purpose, and procedures.
Its top advantage is that it is a low cost, highly scalable model.
Its disadvantage is that when compared to the other models, it is not as effective at increasing the most important objectives, such as increasing customer lifetime value or company revenue growth.
Hybrid Operating Model
The most successful marketers operate a hybrid CoE. However, almost always as a transition to get to the ultimate goal of a federated model.
A hybrid model is a mixture of the centralized and federated models. It provides centralized governance but decentralizes some or all competencies throughout the organization.
Its top advantage is that it expands technical skills throughout the organization. Performance increases as more marketers gain the skills and assume accountability for improved results.
Its disadvantage is that is requires continuous engagement and monitoring to ensure guidelines and best practices are being correctly followed and assets and knowledge are being harvested and made available for reuse.
Federated Operating Model
The federated model is sometimes called a hub and spoke. It's a best of both worlds model that drives strategic advancements from a centralized team and functional execution from individual marketers.
A central CoE continues to provide governance and highly technical foundational services while individual marketers or groups deliver programs and operational execution.
Or they may take a divide and conquer approach. An example may be the central CoE performing corporate marketing, such as brand development and public relations, while decentralized groups take ownership for activities such as lead generation, lead conversions and getting leads through the sales pipeline.
This is a decentralized operating model so is well suited for companies with decentralized operating cultures or for less regulated industries. This model is extremely common with global companies that have many geographical locations and those with many or diverse marketing functions.
As decentralized groups assume more control, the central CoE assumes a portfolio management role whereby they track objectives and monitor performance. They are needed to assure alignment and know when to intervene with skilled resources, best practices, or recommendations.
Its top two advantages are that it grows skills and expertise throughout the organization and achieves the most impressive customer and business outcomes.
Its disadvantage is the higher cost of operation. However, when considered with the improved business outcomes the cost is absorbed in the increased financial results. Also, initial scalability occurs more slowly as multiple groups evolve in parallel but as they mature the scalability accelerates.
Marketing Center of Excellence Staffing
Marketing Center of Excellence performance results are directly commensurate with the quality of the staff and effectiveness of the team.
Finding, developing and retaining highly technical and specialized staff is a difficult task made easier by applying the talent management disciplines of recruiting, hiring, onboarding, compensation management, performance management, and learning and development.
These disciplines will require extra management time but are needed to preserve your human capital investment.
CoE talent is both scarce and expensive. And the costs become exacerbated with staff turnover. CoE staff have specialized skills that make them difficult to find and expensive to hire so churn will lead to significant slowdowns, bottlenecks and costly hiring expenses.
Active staff coaching, clear career path planning and retention factors such as task diversity, performance reviews, technical training and mentorship are essential to mitigate staff turnover.
In terms of staff needed, it's a good idea to start with a leader that has experience in managing teams that drive innovation, value creation and transformation.
The team itself will consist of solution architects, business analysts, maybe some developers, and specialists for each of your chosen competencies.
Few CoEs will have all the required skills so as-needed participation from outside consultants can be used to jump start difficult to find skills or when you need to periodically scale up or scale down.
It's also common for COEs to staff a combination of full time and rotational members. Rotating marketers into the CoE builds new skills that are then transferred back to the broader organization when those members rotate out. This rotation can also be a career path motivation for staff not in the CoE.
In working with clients, we often apply agile Scrum principals to team design. For example, creating self-directed, multi-functional teams with a limit on team size.
Selecting the right team members is another critical task. We've been designing, implementing and operating Marketing Centers of Excellence for many years and from our experience have identified several characteristics that suggest the best candidates. Here are a few.
- A strong mix of technical skills, intellectual curiosity and critical thinking. For example, good candidates often question assumptions, may redefine how work gets done and are comfortable in breaking down complex problems into smaller and more manageable tasks.
- When the path forward is unclear, they will apply some type of systemic approach, such as developing a hypothesis and applying test, learn, and iterate cycles for measurable, progressive advancement toward the goal.
- Good staff are self-starters that remain on task with minimal oversight, while at the same time embrace candid reviews, periodic guidance and constructive criticism.
- Good staff understand how individual tools and technologies impact customer and company objectives.
- They look toward the big picture, such as company priorities, market movements or changes in customer behaviors.
- They demonstrate an appetite for continuous learning and the personal development of skills and expertise.
- While highly skilled staff often operate autonomously that should not suggest they are loners. They often have online or virtual relationships with like-minded professionals and influencers.
- Good staff enjoy sharing learning and expertise with other staff. Many times, these people will broadcast their expertise at events or in social channels or publish what they find exciting in blogs or white papers.
- They do not hold on to sacred cows and are not concerned with "the way it's always been done here."
- Their communications skills are not always strong, but they can explain complex or technical matters in ways nontechnical people can understand. They are effective in linking their work to an easily understood business outcome.
Fortify the CoE with Operating Principals
Solidifying your core operating principals into your marketing plan or a CoE Charter will create a clear foundation to build upon.
Without operating principals CoEs tend to operate with less direction and less consistency. They also don't increase their evolutional pace nearly as fast. With operating principals, the CoE efforts are squarely aimed toward overarching objectives and time to value accelerates.
The 6 Marketing Center of Excellence operating principals we have found most helpful include the following.
- Customer Affinity Strategy
The CoE must start with an overarching customer-centric strategy so that efforts contribute to orchestrating the customer journey and the company's revenue growth strategy. The CoE recognizes these two goals are symbiotic and improving the first will improve the second.
The CoE will figure out how to improve programs that solve for the customer, improve the customer experience, and achieve customer satisfaction. They will link these customer goals with important company goals such as increasing customer acquisitions, growing customer lifetime value and improving customer retention.
- How Work Gets Done
The highest performing CoEs apply a combination of Agile and Design Thinking to define how work gets done. That means adopting Agile principals and rigorous execution that typically includes short sprints with mandatory demonstrations and retrospectives.
Design Thinking will define the most important and highest impact outcomes and be supported with artifacts such as Hills, Playbacks and Prototypes.
All initiatives will incur frequent reviews that demonstrate not just individual advancements, but direct correlation or support for broader objectives and the company's priorities.
The CoE understands that strategic advancements are driven through well-defined processes, not tactics, and focus on effectiveness first, and efficiency second.
- Standards and Processes
There are many CoE processes and each of them should be simplified, streamlined and automated; in that order. For example, a CoE intake process will collect requests for help, and should go through the steps to assess CoE fit, assure minimal requirements (i.e., any request should have a well-defined problem, a data set, an expected result and a sponsor), prioritize the request (by business value), estimate effort and payback, and route for approvals.
- Program Management
CoEs must be experts in managing agile projects. Program management will include adoption of a methodology, best practices, industry benchmarks and relentless measurement and reporting. It should have ties to related services such as risk management and change management. The later is essential when incurring any type of transformation.
- Tools and Technologies
In addition to defining the MarTech stack, the CoE will assemble a suite of internal productivity tools. That will include things like ideation tools (such as Mural), agile management tools (such as Jira, Rally or Trello) and knowledge management tools (such as knowledge-bases or content management systems). That last tool is especially important for institutionalizing knowledge and making it freely available throughout the organization.
- Data Transformation and Analytics
Finally, the CoE must define the most important metrics that measure their value. For most groups, that value should be measured by the previously referenced customer goals and company outcomes.
To aid their colleagues, the CoE must get agreement on the most important key performance indicators and then figure out how to convert data into insights and deliver the right information to the right person at the right time.
A common mistake is reporting to many metrics. That dilutes what's most important with noise. Instead, focus on a short list of high impact measures.
Another common mistake is reporting only historical metrics. Those are important but less impactful than forward looking predictive analytics.
Governance is one of the most overlooked but essential marketing center of excellence best practices.
The governance for a Marketing Center of Excellence is really about 4 things: transparency, inspection, adaptation and accountability.
Governance starts by identifying constituent groups, their meeting rhythm (frequency), primary responsibilities and information reporting. An illustration is shared below.
As part of our framework, we use some purpose-built tools to give stakeholders what they need to do their jobs. And to be clear, what they need is clarity in communications. They want truth and they want it early.
They also want the CoE to fairly share risks, issues, concerns and bad news objectively and early. Only then can they can take corrective action quickly. Bad news does not get better with age. Most of all, they want to avoid surprises.
We deliver this type of communication with our CoE Success Factors Executive Dashboard. It's a board room type analysis, and it's effective because it is simple, fast to consume and easy to interpret.
It displays early warnings and provides a basis for decisions, actions, commitment and sponsorship. We have found that virtually everything about CoE program health is included in the 10 success factors.
Effective governance brings clear eyed rationalization when confronted with competing priorities. It also helps separate the urgent from the important and avoid confusing activity with progress.
A CoE is much more than the centralization of resources, the delivery of shared services or a modified org chart. It redefines how work gets done and is the single greatest contributing source to continuous performance improvements, breakthrough financial results and marketing transformation.
A Marketing Center of Excellence implementation is not a short event. It is a journey navigated with a roadmap. And those forward-looking marketers who commit to the journey will shift from operational mediocrity to Best-in-Class performance. Their revenue contribution to the company and ROI will surge and they will earn a new influence among the executive team.
It's a lot of effort for sure. And that's why those marketers who succeed will achieve competitive advantages over those who sit the sidelines.
The most important thing is to get started and make continuous improvements. As said by Mark Twain, the secret of getting ahead is getting started. The secret of getting started is breaking your complex, overwhelming tasks into small manageable tasks, then starting on the first one.