CEPSM.ca STRATEGY BEFORE TACTICS HOW TO CREATE AND SUSTAIN A MARKETING CULTURE IN A PUBLIC SECTOR OR NON - PROFIT ORGANIZATION Version 1.0 Prepared by: Jim Mintz & Bernie Colterman; Managing Partners, Centre of Excellence for Public Sector Marketing 5/16/2011
Contents Introduction... 3 Marketing Culture... 8 The Cultural Change Process... 8 Step 1 Educate and Encourage... 9 Step 2 Define Expectations... 9 Step 3 Acknowledge & Celebrate Success... 9 Step 4 Reward Success... 9 Individuals Are Your Culture... 10 Page 2 of 10 Centre of Excellence for Public Sector Marketing - CEPSM.ca
Introduction Every day, professionals in public sector and non-profit organizations deliver thousands of programs and services in increasingly demanding environments. Governments as well as many non-profit organizations are adopting marketing approaches to help meet the challenges of complex and difficult mandates and satisfying client needs in the face of diminishing resources. Recognizing the growing importance of marketing in the public and non-profit sectors, the Centre of Excellence for Public Sector Marketing (CEPSM) and Phase 5 conducted a landmark survey in 2006-07 to assess the health of marketing in both these sectors. The study was conducted with close to 600 professionals in marketing-related positions in government and non-profit organizations across Canada. Respondents to the survey were primarily involved in marketing products/ programs/services/policies, overall corporate image/brand management, and social marketing. What we found was that a strong and cohesive marketing culture appears to be absent from government organizations. While non-profit organizations exhibited a stronger orientation towards a marketing culture than government. Figure 1 demonstrates that there is still room for much improvement on this measure among both sectors. Figure 1 - Rating of Public and Non-Profit Organizations Centre of Excellence for Public Sector Marketing - CEPSM.ca Page 3 of 10
Within the government sector, a higher proportion of provincial and municipal government organizations scored in the upper two quartiles on the culture index compared to federal government organizations. An examination of the specific attributes that contribute to the culture index shows that both government and non-profit organizations are committed to responding to client concerns. Professionals from both types of organizations gave the highest ratings to the statement Complaints from clients are not ignored. To a large degree, this likely reflects the fact that citizens enjoy certain mandated or legislated rights with respect to access to public services. Within government organizations, the results do indicate a lack of coordination across functions and workgroups to offer a consistent, client-centred approach. This may reflect an organization-centric view where programs are not coordinated around external objectives, and workgroups are motivated by internal considerations. In comparison to government organizations, non-profit organizations exhibited an organizational culture that was more focused on offering value and service, evidenced by high ratings for the statement Everyone in the organization is focused on delivering superior value and service. Marketing professionals from both government and non-profit organizations also gave ratings that suggest their organizations lack a holistic understanding of marketing principles. This is evidenced by low ratings for the statement There is a common understanding of marketing across the organization. It is also evident that government organizations in particular need to develop senior executives marketing skills and apply marketing principles to their approaches with their clients / audiences. Page 4 of 10 Centre of Excellence for Public Sector Marketing - CEPSM.ca
Table 1 - Individual Attribute Ratings: Culture Marketing Health Index Culture Measures Government Non-Profit Managers and staff understand client motivations for using their programs and services 3.2 3.5 There is a shared understanding of the priority clients/audiences 3.1 3.4 Senior executives and board members consider the needs of priority audiences when making decisions Everyone in the organization is focused on delivering superior value and service There is a common understanding of marketing across the organization The organization is flexible in responding to changes in audience needs There is collaboration between marketing and non-marketing functions 3.3 3.7 3.5 4.0 2.3 2.8 3.1 3.7 3.1 3.4 Senior executives have a good grasp of marketing principles 2.5 3.1 There is coordination across workgroups to view clients through a single lens Developing new, valued approaches to serving clients is encouraged 2.9 3.4 3.6 3.9 Complaints from clients are not ignored 4.0 4.3 Marketing is recognized as an essential function within operational units 3.3 3.9 * Numbers represent mean score on a 5 point scale, where 1 means strongly disagree and 5 means strongly agree Overall, the survey results showed that government had not adopted strategic marketing management in any significant way. Respondents indicated that their organization had adopted very few of the best practices of leading marketing organizations. Government organizations are less likely to recognize strategic marketing as a function that is distinct from communications. Organizations interviewed lack the culture and organizational support to advance the practice of marketing. They lack a common understanding of strategic marketing principles, from the senior executive level down. The survey also found that public sector and non-profit organizations: do not have a proactive, systematic approach to identifying high value, client-centred ideas and turning these ideas into new products, programs and services; are more focused on tactics and implementation than on strategic marketing and planning; tend not to measure to improve results and ensure accountability of marketing expenditures; Centre of Excellence for Public Sector Marketing - CEPSM.ca Page 5 of 10
do not support the marketing function either in terms of funding or culture; and have difficulty attracting, training and retaining staff with marketing skills given the culture and lack of organizational support. In short, governments in general neglect incorporating a formal marketing process and establishing measurable marketing objectives. They are not effective in implementing a proactive process that considers client needs when identifying and developing new products, programs and services. Governments tend to be reactive, rather than developing proactive systems to address shifts in the marketplace. Figure 2 - Rating of public and non-profit organizations based on key marketing health indices What is the state of marketing in 2011? Well, unfortunately not much has changed. In CEPSM s dealings with non-profits and the public sector we have noted the following: We still have many organizations developing one-off, disjointed tactics without a strategy and based in many cases on personal opinions rather than on solid marketing research. People running marketing programs that have no training in marketing and think that communications and marketing is basically the same thing It isn t! Performance measurement and evaluation is virtually non-existent and when done is mainly focused on outputs with no regard to outcomes and impacts. Now that on-line strategies and social media and digital strategies are in vogue we see organizations developing online products and digital engagement tactics without an overall strategy. A recipe for disaster! Page 6 of 10 Centre of Excellence for Public Sector Marketing - CEPSM.ca
So where do we go from here? How do we develop a marketing culture in public sector and non-profit organizations? 1. There is a strong need to educate public sector and non-profit senior management about strategic marketing management principles. This requires recognition of the value of marketing in terms of the potential impact on the effectiveness and efficiency of programs, services and outreach campaigns, as well as the benefit to their clients. 2. Public and non-profit sectors are much more familiar with the promotion and communications aspects of the strategic marketing framework than with elements of segmentation and strategic market selection, branding and positioning, product/service management, channel management and pricing. There is a wide recognition of the role and value of the communications function and many organizations have developed communications plans outside of a marketing framework. There is an opportunity to broaden this function to include a strategic marketing mandate and re-positioning it as an expanded role. Marketing can be used to achieve the vision of better informing and engaging citizens by viewing communications within a broader, strategic marketing framework. It can help drive results in program uptake, program impact and behavioural change. It can also save money by helping executives and program/service managers make informed investment and resource trade-off decisions. 3. There is no clear marketing function or job category in government and therefore few positions include marketing in their titles. In the private sector, marketing has a clear career path. Governments need to look at both classification and standards for hiring marketing people. Judith Madill, in an Optimum Online article, states that, for marketing to be successful in government, it is necessary to assign responsibility for the marketing initiative to a senior manager with influence in the organization s decision-making environment. 4. Most people performing marketing functions in public sector and non-profit organizations do not have formal training in marketing. This suggests a clear need, for marketing training workshops, courses, tools and on-line training resources. 5. Public and Non-profit sector organizations don t always consider client needs when developing service and product approaches. Governments and non-profits need to examine the process by which they develop and manage products, programs and services. Marketing management systems and practices must be adopted from the planning level on down. Measurement systems must be put in place to track success against marketing objectives and make necessary adjustments to improve performance. 6. Many public sector and non-profit organization managers identify marketing with cost recovery or revenue generation. While marketing can assist in these goals, it may be more valuable for other objectives such as improving relationships with groups and individuals, and serving clients better. Marketing can be beneficial to public and non-profit organizations because it ensures that clients and stakeholders play a major role in developing and implementing a program/product/service; initiatives tailored to specific segments of the market ensure efficient use of limited resources; and application of the four Ps (product, price, place, promotion) will help move the initiative beyond communications/promotion. Centre of Excellence for Public Sector Marketing - CEPSM.ca Page 7 of 10
7. Finally, since the publishing of our study, the world of communications and marketing has changed significantly with the advent of marketing in a digital environment. We now live in an era where the communication and marketing landscape has been completely turned upside down in both the public and non-profit sectors. Social media has become the elephant in the communications and marketing room. Before organizations consider getting into the social media/digital engagement field in any major way, a certain mindset shift has to occur within the organization that caters to transparency, collaboration and participation. This crucial part of the process is all too often being ignored. Instead, organizations are jumping into tactics thinking that social media and digital engagement is merely just another communications channel. That s a big mistake! Organizations need to start with a digital engagement and social media strategy before leaping into tactics. In addition organizations jump into social media without first performing their due diligence and actually finding out what their current presence is. Just because you have not yet officially engaged on social media channels doesn t mean that you don t have a presence on them. Therefore you should consider conducting a social media audit to listen and learn before proceeding with strategies and tactics. Marketing Culture As public sector and non-profit organizations continue to try to meet the challenges associated with demands for improved service delivery within budgetary constraints, they need to get their collective act together in the field of marketing. This should result in these sectors delivering programs and services with more speed, quality, efficiency, and convenience. Building a corporate culture that embraces marketing can be one of the most effective ways to achieve an organization s objectives. Organizations that are successful in developing a marketing culture reap the benefits of a client centred group that puts clients first and bureaucracy second. It is quite ironic that managers in these sectors are constantly trying to find ways to be more relevant to their clients not realizing that marketing brings with it a discipline which is totally focused on satisfying client needs. Public and non-profit sectors are constantly trying to effectively get their message out to various target groups. Many communications functions are consumed with this task and this function which has grown substantially in the past decade has in recent years focused on enhancing their expertise in using the latest technology e.g. web, social media, etc. This is positive. But what would happen if the same amount of effort was invested in building a corporate culture that embraces marketing? Building a marketing culture is the first step to better understand your clients. Organizations that do not take a marketing approach and develop a marketing culture often find that they are missing uniformity in their message. The most effective way to succeed at changing a corporate culture towards that of marketing is to purposefully engage a cultural change process. The Cultural Change Process 1 As simple as this philosophy sounds, the reality is that most organizations are not successful at changing their corporate culture because they do not follow a structured process of cultural change. The result is that most corporate cultural changes do not happen by predetermined paths, but instead occur by accident. 1 Thanks to Tim Klabunde, whose article in April 2009 edition of Marketer helped us develop the change process Page 8 of 10 Centre of Excellence for Public Sector Marketing - CEPSM.ca
It is important to remember that just as your culture was not built overnight, corporate culture doesn t change overnight. It is not an easy process, but by looking at the many organizations that have gone before us we can identify a systematic process that yields successful cultural change. That systematic process can be broken down into four steps that will allow your organization to take control of your cultural change. Step 1 Educate and Encourage Education and encouragement are the foundational step of any cultural change. Without the knowledge of how to succeed in a new culture it will be impossible for staff to move towards that new culture. In the case of changing corporate culture toward a culture that embraces marketing, the first thing people need to know is how marketing works and how they can participate in the marketing program. This often requires training in areas such as basic marketing. During and after training it is important to encourage staff to try out their newly acquired skills. Through this process you will begin an on-going process of training and raise an organization that embraces the new culture. Step 2 Define Expectations The second step in changing a corporate culture is defining expectations. Staff need to have a clear understanding of your organization s expectations from the team as individuals, as well as collectively. Changing corporate culture depends on changing one person at a time. Because each person is unique and has different responsibilities, this also means that what is expected of individuals should vary. For example, a project manager may be responsible to achieve specific marketing goals whereas frontline staff needs to learn how to deal with clients and deliver exceptional client service. Expectations should also be tailored to the strengths of individuals so that their contributions can be maximized. Step 3 Acknowledge & Celebrate Success Acknowledging and celebrating success is the single most important step in changing corporate culture. Organizations often begin the process of change by bringing in outside training and defining new expectations, but the culture change never takes root. The reason is that culture change depends on acknowledging success at the highest level. In the case of building a marketing culture, this can be accomplished by the senior management taking the time to walk into individual s offices just to say thank you to team members. That brief moment of acknowledgement will ensure that the individual knows what they did was important and appreciated, not just by their manager, but also by upper management. In addition to acknowledging success you should strive to celebrate success. Ways to celebrate success include having a little get together when you achieve success like sponsoring a breakfast. It does not have to cost a lot of money but people remember things like events and they leave a lasting impression. The key differentiator between acknowledging success and celebrating success is that a senior individual should acknowledge the success, but celebration of success should be inclusive of others that were directly or indirectly a part of the success. Step 4 Reward Success The final step in changing a corporate culture is rewarding success. Rewarding success is important because it aligns the objectives of the cultural change with long-term rewards that then become evident to others throughout the organization. The goal is to build the cultural shift based on people that are working to build a better organization for themselves and others. This can be done through performance evaluations or other means available to you (e.g. incentives), but the key thing is to reward employees. It s also important that the reward is meaningful to that individual everyone is different. Centre of Excellence for Public Sector Marketing - CEPSM.ca Page 9 of 10
Individuals Are Your Culture It is important to measure your success in changing your corporate culture one person at a time. Your culture did not instantly become what it is today, and it will not instantly become what you want it to be. The first two steps should include everyone in the organization, although recognizing that not everyone will immediately embrace the new culture. Instead, focus your attention on individuals that begin to implement and show the successes of your cultural change. By doing this you will see a wave of optimism unfold as these individuals begin to build your new corporate culture. Page 10 of 10 Centre of Excellence for Public Sector Marketing - CEPSM.ca