We often talk about in-housing vs. working with an agency. But another major decision that brands have to make is either to centralize most of the decisions and operations in the HQ or to give the maximum freedom to the local markets.
Today we see that the answer to this question is never fully white or black but we will try to highlight the raisons why brands are usually willing to move more towards one direction or another.
Centralized, decentralized and distributed definitions
In a centralized marketing operation structure, everything is done from the HQ: brand image, strategy but also the execution.
In a decentralized marketing operation structure, all markets are completely independent of their branding, budget allocation, etc.
Obviously most companies are not in either of these extreme options. The answer is “you should be doing both”! They are usually in what we call a distributed structure., trying to leverage the advantages of both approaches. For example, the global team at the HQ creates guidelines, templates, etc and local teams have a certain level of freedom for the execution and local strategy.
Then, the most important decision is how to put the cursor in a distributed structure and whether or not we go more toward centralization or decentralization.
Processes, people and more
The question of centralized vs decentralized is not only a question of where people are sitting. It’s also a matter of tools, processes, legal approval, etc.
For example you may have a decentralized organization with local teams in markets but with a centralized tool stack, which means that everyone is required to use the same marketing automation, emailing, advertising solutions.
You may also have a centralized strategy with a decentralized execution.
So in a perfectly distributed organization, what should be centralized or not? There is no single answer to that. It really depends on your current structure, what you want to achieve, what are your values, etc.
Let’s see the pros and cons of both options and you can pick what makes more sense for your organization.
Pros & cons
- Full control on the brand image
- No time-zone differences
- Usually people can communicate using the same language
- Leverage best practices
- Better control on data
- Easier reporting
- One person can manage multiple markets
- Direct access to the value chain (designers, product team..)
- Less knowledge of each market specificities
- Less talent recruitment opportunities
- Not as strong against local competitors
- Local presence
- Knowledge of local events, competitors
- The team shared the target local culture
- Tailored-made approach by market/country
- Local legislation knowledge
- Lack of – transparency sometimes due to distance, language, etc.
- Cost more, some positions or software may be duplicated
- Complicated workflows
- ROI tracking is more complex
- Competence gap between central and local teams
What can motivate you to move toward a more centralized organization?
- Your product is standardized across all markets
- You operate in few markets
- You sell the same way (direct, indirect, inbound or outbound…) in each market
- You want to align the level of maturity in each market
- You don’t have local ressources to rely on
What can motivate you to move toward a more decentralized organization?
- You are not selling the same product in each market
- Your sales cycle varies in each market
- You have local ressources to rely on
- You rely on local partnerships
- Other divisions of the company/BU are decentralized too (sales, operations, product…)
A few tips that can help centralized teams
- Onboard native people from the markets you are managing in order to bring local knowledge
- Use regional “hubs”. In very large organizations this level will serve in addition to local and central teams, but in smaller organizations, this can replace in-market teams.
A few tips that can help decentralized teams
- Do not hesitate to have dedicated people work only on the coordination and make sure everyone is well equipped.
- Provide local teams with a large set of assets : images, landing-pages, email templates, etc.
- Equip the team with the right tools to collaborate and centralize knowledge. You also need to have the right tools to keep track of everything.
- Implement Grasp. You will have clearer visibility on what’s happening in markets and at the agency level, you will make sure that everyone is aware of strategy and how to use assets, and you will get awesome dashboards fueled with real time data