-By Richard Rawlinson & Ben Richards

With the average CMO lasting just 23 months and with three quarters of marketing departments in the throes of reorganization, the marketing industry is in a crisis state. It's universally acknowledged that the impact of cultural singularities like media fragmentation and the Internet have changed the marketing environment forever. But most companies, distracted by experiments with new marketing techniques and tactics, have failed to evolve their own internal structure, culture and capabilities.

Marketers are, of course, all too aware of these changes to their environment. But in response to them, they've managed to evolve only superficially. Creating a marketing approach that will succeed and excel in the 21st century requires companies to reform in four critical areas.

The first is structural. While the need to have someone represent the consumer's voice at the top is greater than ever, fewer than 10% of the London Financial Times Stock Exchange Index companies have marketing directors on their boards. And, far from placing the consumer at the center of strategic development, most marketing departments remain organized around the traditional models of product, function or media channel.

Worse still, the functions that generate different parts of the marketing mix remain isolated within the larger structure. The problem is that one marketing lever alone is rarely enough to influence today's consumer. The days when a TV ad shown one time could reach 85% of the adult population are long over. Integration across marketing disciplines is key.

Which brings us to the second key area for reform: personnel development. Most marketing departments remain dominated by people trained vertically within a discipline; they've received little training as to how to integrate their discipline with those of others. Addressing this problem means looking to new skills, a more entrepreneurial mindset and an update of marketing careers—but it also means changing incentives. Specifically, we must move away from personal incentives and toward shared ones that meet the overall brand objectives.

The third area for reform is in the realm of analytics. Back the golden age of advertising, the financial return from ads was seldom seen in the short term; marketing was an investment in the long-term health of the brand. Hence, intermediate measures were created to understand how the marketing was working. Unfortunately, marketing departments began to confuse the two, and looked to intermediate metrics such as campaign reach and brand awareness for both objective and result. Today, still mistaking efficiency for effectiveness, marketers find themselves brilliant at measuring irrelevant things. They need to start focusing on real measurements, such as how many people are searching for your brand on Google rather than  how many people claim they've seen your ad.

The final area for reform is cultural. In an age when innovation is critical in marketing departments, everything militates against the main tenet of innovation: risk. Instilling a risk-taking culture doesn't have to mean employing expensive "Funsultants"who take everyone off-site and make them don superhero costumes. But it does mean making marketers feel free to experiment.

Why is marketing in crisis? It's not the core skills that are lacking, nor an understanding of the changing consumer landscape. The marketing organization of the future is built around its customer, not around disciplines. Its people are motivated to drive real business performance and encouraged to thrive on innovation, not landlocked within disciplines and chasing spurious brand goals. The time has come to recognize that success must come from the same place the talent does: within.


Richard Rawlinson is a partner with the London office of Booz & Co.; Ben Richards is strategy director at Naked New York. You can reach them via www.booz.com/uk and www.houseofnaked.com, respectively.