Sunday, September 20, 2009

The Problem of Silos

I have just returned from a National Arts Strategies seminar entitled Managing People. One of the many things I love about their seminars is that they force you to take a hard look at strategic planning, and how strategic planning influences everything from marketing strategies to, in this case, human resources.

Upon my return from the seminar, I started to think about a common structural problem that many organizations encounter -- the problem of silos, particularly silos between the marketing and development departments. As non-profit arts organizations became more and more sophisticated, there began to emerge two distinct entities: a marketing department tasked with maximizing earned revenue streams and a development department responsible for overseeing all contributed revenue streams. It can be said that "marketing" departments have existed for much longer, and that even for major arts organizations, development departments are somewhat of a recent development (Arena Stage hired its first development director in the late 1980s). With two distinct departments tasked with being responsible for all revenue coming into an organization, all too often, the strategies devised by each department are done so with minimal thought to how they will affect or interact with the strategies of the other, causing the silo effect. As a consultant, I see this with many of the clients I work with, and it makes it difficult for an organization to make the best overall decision on how to move forward strategically.

In the last decade, many organizations have experimented with the "external affairs" model where one large department, housing both development and marketing, is tasked with revenue management. The problem with this model is that in most cases, although the department is united under one leader, there still exists marketing and development silos under the external affairs banner. Again this creates a problem because it doesn't allow an organization to view a complete picture of the customer as one side will look at a customer from a ticket sales perspective while the other will see his potential as a donor. Given the experience of the external affairs director, many times one division is stronger than the other depending upon the director's history.

So remembering a session from this summer's TCG conference, I thought what would I do if I had no rules to abide by and I were running the zoo? I believe I might blur the lines between development and marketing much more than they have been in the past in an effort to view the customer holistically and therefore provide better service. The heart of most of the roles in each department rely upon the same set of skills -- messaging, selling and promoting. Below would be a possible org chart for an external affairs department:

Director of Business Development (not so hot about the title, so it might change): This person would be responsible for all new business development. Chiefly responsible for getting new audiences into an organization, growing the reputation of the organization in targeted segments and organizing audience development events.

Direct Reports:
- Group Sales
- Inbound Sales
- Telesales
- Audience Development

Director of Loyalty and Retention:
This person would be responsible for taking the current customer base, and moving them up the loyalty ladder from single ticket buyers to multi-buyers to donors. Also responsible for audience retention programs.

Direct Reports:
- Customer Account Managers: These individuals would oversee a given number of customers and would be responsible for their customers complete care with the goal of moving the customer from a multi-buyer to a subscriber to a donor, and then renewing them the following year. They would track the participation of each of their accounts, and provide customized personal strategies designed to enhance the relationship between the organization and the customer.
- Planned Giving
- Capital Campaign

Director of Brand Management: This person would be responsible for the overall brand of the organization from institutional messaging and design to public affairs and media relations.

Direct Reports:
-Media Relations
-Publications/Art Department
-Special Events

Director of Government & Institutional Affairs: This person would be responsible for being the liaison to all government offices (local, state and national) as well as foundations.

Direct Reports:
-Grant Writers
-Foundation Officers


Shane Hudson said...

I think this is brilliant Chad! I've spent so much time thinking about a new structure for marketing/development and this is the answer I've been looking for. It just makes more sense. Thanks for sharing!

dellarte said...

indeed Chad, you have a good eye for synergies!

I'm currently implementing for non-profits (they offer 503c 10 seats for free) with google aps for enterprises to leverage the historically insights in both the mktg and donor arenas

although i think you structure only works for large orgs, the same principles can be applied all the way down the line to the smalest mom and pop

anywheregirl said...

REALLY fascinating ideas! This could be especially effective for smaller organizations who are looking for creative staffing structures. Would love to know if there are any organizations out there doing something like this.

Anonymous said...

Amazing ideas, Chad! I'm currently the newest addition to a small nonprofit staff, and my job is both marketing & development, band while I see the two as interrelated, it's hard to tackle both at once. As ourr group expands, I can see your suggested business model working very well. splitting customers into the two groups--new ones and loyal ones. This makes so much sense! It takes a certain kind of person to cultivate new audiences, and a totally different personality to attend to the loyal audiences, and facilitate more loyalty. Congrats on this structure. I'm sure it will come in handy in the future.

masterfiddle said...

Thanks for this Chad! I am new to your blog, a recent Arts Admin grad from the UofO in Eugene, Oregon. We often discussed the problems of silos in the arts and my research focused on the organizational structure and cultures of symphony orchestras. Overall, I got a lot out of this post and have added a link to my blog as well!
thaks again!

Anonymous said...

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Anonymous said...

The Alliance Theatre in Atlanta had an excellent integrated approach. I know that there have been staffing changes so I don't know if that will change.