Traditional Corporate Structure Can Hurt Brand Health

by Michael Houlihan and Bonnie Harvey

In order to stay fresh, relevant and dominate their space, brands must constantly reinvent themselves. But does the traditional company structure itself suffocate a brand’s growth and evolution? Does the structure itself create its own roadblocks, choke communication and suppress innovation?

Traditional corporate structure puts marketing higher in position and status than either sales or customer service. This creates the misconception that marketing knows most about what the customer wants when, in fact, sales and customer service are the only two groups in the company that talk to the customer every day.

How did this structural upending happen? For one thing, corporations were originally developed to achieve efficiencies of scale based on divisions of labor and mass production. This worked fine in the old supply sided economy where companies controlled raw materials and needed to sell them. It was only logical to seek marketing advice as to what products should be created out of those materials and how to advertise them. With this top-down approach, products were pushed through the system. Sales people were viewed as soldiers who executed the marketing plan, and customer service was viewed as complaint resolution.

This attitude was reinforced as universities began to offer degrees in marketing. Even today, you would have few options if you wanted to get a degree in the areas of sales or customer service from a major university. The media and the general public believe marketing alone is responsible for brand creation, growth and health. Yet, without the constant feedback from the customer that comes from sales and customer service, marketing can easily be blinded to the ever-changing market.

But traditional corporate structure has an answer for that: focus groups, sales and competitive analysis. The problem with reliance on these methods is that the information tends to be tainted by the questions, manipulation of the statistics and following the market leader who may be about to fall off the cliff. These methods tend to be more of a justification for “Why we are doing it the right way?” rather than “What’s getting by us?” A rearview mirror approach can easily distract the company from what’s rapidly approaching in the windshield!

Traditional corporate structure is based on silos, which in themselves can create turf battles and limit the free flow of ideas. Job security begins to take precedence over brand longevity. Each silo fights the battles for making their job easier regardless of the consequences to the brand or the company.

Production wants more standard packaging, simplified labeling and lower costs — even at the expense of uniqueness, perceived quality and brand promise. Legal wants bigger warnings, longer review periods and watered-down rhetoric even if it means the “buy” message takes a back seat. Accounting is figuring how much it could save by cheapening the package based on the misconception that sales will not be hurt. Marketing wants more money for advertising because their budget is based on how much they spent last year.

Executives can feel pressured to make their mark on a brand to help their career even if it is inconsistent with the general public’s expectations of their brand image and promise. “New is better than good” becomes a slippery slope where the company begins to lose sight of what made the brand successful in the first place.

You can follow the competition, or try to save money, face and status. You can try to protect territory and every kind of perceived liability. Or you can try keeping your brand fresh, current and healthy by elevating sales and customer service in rank and status. Don’t let efficiencies of scale result in deficiencies of sales!

Michael Houlihan and Bonnie Harvey are the founders of Barefoot Wine, the largest bottled wine brand in the world, and authors of the New York  Times Bestselling Business book The Barefoot Spirit. From the start, with virtually no money and no wine industry experience, they employed innovative strategies to overcome obstacles, create new markets and foster key alliances. Michael and Bonnie now share their experience and entrepreneurial approach to business as consultants, authors, speakers, and workshop leaders. Michael and Bonnie launched at the C-Suite Network Conference their new companion book to The Barefoot Spirit entitled, The Entrepreneurial Culture, 23 Ways to Engage and Empower Your People. Learn more at barefootspirit.com, and find them on Facebook and Twitter @barefoot_spirit.