A few years ago I was working with an organisation that was undergoing a significant restructure.  Although the restructure affected the entire organisation, it had a particular focus on the marketing department. Coincidently, at the time, I was in the process of completing my MBA and needed a research topic, so I decided to have a closer look at how the members of the marketing department perceived the changes.

During the research process I conducted a small series of sixteen interviews with members of the country and central brand teams to gain an understanding of the impact that the restructure had had on them. I’ll hasten to add that all of these employees had survived the mass redundancies and were therefore adapting to life after the restructure.  This short article is a brief summary of the responses I received.

A (very) brief background to the restructure

The goal of the restructure was primarily to reduce expenditure across the organisation in the face of impending patent expiries and a corresponding forecasted drop in revenues. Within the marketing structure, the strategy was to move from local, largely independent marketing teams to a more centralised marketing structure.

To achieve this, the company reduced in-country marketing expertise significantly and replaced the traditional brand manager roles with a brand operations manager position.  Local marketers would be responsible for implementation of centralised marketing programmes and would report directly to the centralised European brand team, rather than to in-country team members.

Positive Effects of Restructuring

The primary benefit identified by the respondents was a better alignment to centralised brand strategy, making a single strategy with consistent messaging easier to achieve. In addition, interviewees commented that the centralised structure would facilitate a better sharing of best practice by concentrating experienced marketers, from a variety of European markets (all of whom have worked at country level), in one centralised location.

Restructuring 1

They also felt that the restructuring would allow a wider, more multinational view of the organisation, allowing a better alignment with the environment over the long term. In addition, respondents typically felt that the centralised structure would enable better interaction with countries and allow the countries to have a “better voice” into the centralised brand team.

Economies of scale, particularly with regard to campaign development, were thought to also be of prime importance although most of the interviewees were sceptical as to whether these economies had been achieved, particularly within the primary care business units.

Country marketers felt that it would allow them more time to spend with their customers, bringing them closer to the business by having a more operational and cross-functional role as brand operations managers. This was felt to be particularly true of the speciality business Units that have a small number of highly networked key opinion leaders requiring constant interaction.

A final comment from one of the respondents was that a centralised structure would aide a better understanding of the trade-offs required and to necessity of doing fewer activities but doing them “bigger and better”.

Negative Effects of Restructuring

All marketers interviewed commented on the amount of disruption to customer relationships and to normal business process. Allied to this was the concern over the loss of some specialist skills and knowledge and the impact of these losses on customer relationships. Two respondents felt that the restructuring has also led to “unhappy customers who felt that company staff had been badly treated by the company”.

Restructuring 2

Another negative effect of restructuring was felt to revolve around slow response times to any market changes. There was a concern voiced amongst interviewees that, due to the fact that the central marketing team is now detached from the individual markets, it would take correspondingly longer to respond to emerging threats within the marketplace.

Many of the respondents observed that the loss of autonomy and flexibility within the country marketing structures increased the danger of their focus shifting to managing processes, rather than focusing on the end business results. On an individual level, many respondents mentioned a feeling of “disempowerment” due to the loss of autonomy and the effects of what they describe as an “incredibly disruptive” process.

A lack of role clarity, confusing reporting structures and hierarchies all resulted in feelings of intense frustration and isolation, mainly within the country structures. This has resulted in “increasing resistance from certain markets” to the implementation of centrally developed marketing campaigns.

Concern was also raised that the new structure could lead to a rigidity of thought and a suppression of innovation as people adhere to process. This process-focus was also felt to place the organisation at risk of losing customer focus as the focus shifted internally, particularly in the short term.

The need for the centralised brand team to be closer to the markets has led to an increase in time (and significant cost) spent travelling and away from home, with a corresponding increase in job dissatisfaction and demotivation. One respondent mentioned that people “are physically exhausted” from all the business travel required.

Concerns about under-resourcing were also mentioned, particularly in the short term and with specific reference to support staff. This has led to increasing workloads, specifically within the mid-sized markets and has resulted in significant demotivation. A number of respondents made comments such as [the company expecting employees to] “work until you drop in your tracks and “expecting one person to do the work of two”. The structure was also felt to have increased the percentage of management staff versus support staff with a corresponding increase in workload.

Impact on Motivation

The impact of the restructuring on motivation was felt to be “a mixed bag” which was largely time-dependent and appeared to differ between the centralised brand team and the country marketing staff.

Change within the centralised brand team was seen to be unsettling but generally positive and it appeared to empower the centralised brand team, allowing them a greater level of control over the European market. From an in-country marketing perspective, this was not felt to be the case and the change appeared to reduce motivation in the short term; however, this is slowly improving.

Most interviewees commented that their workloads have increased by between 30% and 100% with longer hours required in the office and far more business travel expected. One of the respondents commented that “if Company X doesn’t do something soon they are going to lose some very good people” due to the increasing stress and frustration. Two of the respondents, however, felt that their workload had “significantly reduced”.

Central Understanding of the Individual Country Markets

The centralised brand team understanding of the various markets were seen as “work in progress” by almost all respondents, as the European team slowly builds its expertise. Market understanding appears to be “hugely variable” with the greatest understanding being of the “Big 5” markets (France, Germany, Italy, Spain and the United Kingdom).

Some of the members of the European team, however, felt that there was also a lack of understanding by the country marketers of the new structure, particularly of the new system for developing and approving marketing materials. This was seen as being due to a lack of communication and direction from the centralised management structure, as well as arising from “not wanting to let go” of their previous job structure or level.

All of the country marketers interviewed queried the ability of the centralised brand team to truly deliver standardised programmes as each of the markets are so different that it is very difficult to standardise. They pointed out that the European team still seems unsure of what activities can & can’t be done from a regulatory or legal viewpoint and are also unsure of what can be standardised and what must be adapted.

Country marketers also questioned “the ability and desire of the centralised brand team to react” as well as its “capacity to respond”. They also commented on the centralised brand team “not listening” and “not understanding the urgency”. One of the country respondents observed, however, that it was the duty of the local brand operations managers to provide the centralised brand team with the required customer and market insights.

Summary

In the five years since the changes discussed above, this company has restructured to a greater or lesser almost every year, with a corresponding impact on employee morale, programme delivery and business structures. This has made it difficult to truly evaluate the long-term impact of the original restructure and more research will be required.

So, did the restructure work? Yes, from the perspective of the Board of Directors and the shareholders, it most certainly did. As far as the Board was concerned, they achieved their cost savings target within a shorter period than originally forecast, with a corresponding positive response from the markets.

Has the change resulted in greater efficiencies at brand level? The jury is still out on this, largely due to the complex regulatory environment prevalent across the European countries. Campaigns developed by the European brand teams are still required to undergo local review and adaptation, in some cases the programmes simply cannot be implemented due to local regulations.

From purely a personal perspective, however, I have seen the impact that the constant change has had on motivation, workload and stress levels, at both European and local country levels. I have to confess that I have never seen a group of marketers work harder, within a state of constant change, in my life and I take my hat off to them. The company may indeed have reduced its costs over the years but the savings have come at a human price.

If you would like any further information on organisational restructuring, change and transformation, or would like to see how The Cape Marketing & Consulting Company can help you, please contact Andrew Wilmot at andrew.wilmot@thecmcc.com.

Copyright 2014. All rights reserved.

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