In the March 21 issue of the New Yorker, Tad Friend wrote a fascinating profile of Dave Wirtschafter, the president of the William Morris Agency.  I have to admit that I’ve always been attracted to stories about the personalities in the entertainment business, so when the moment presented itself, I took the opportunity to sit down and read the whole piece.

Now, the personalities, the psychological profiles, the gossip, all that’s wonderful.  However, here’s what stood out for me:  Apparently, there was “an internal power struggle about the company’s direction: should the agency stick to its traditional approach, in which music stars are represented by music agents and movie stars by movie agents, or try something new, as Wirtschafter wanted to do?”

Things seem to have sorted themselves out in favor of the latter approach.  Here is how Wirtschafter explains it:

"If you were a client, you’d want everybody at the agency thinking about you, so you’d have this matrix of brain power surrounding you as you entered the building—television, music, books, and movies all working together."

“Matrix of brain power.”  I love that!  It’s exactly what we’re talking about in the PMA/Northwestern Research Study on “ROI of Integrated Marketing” when we say that brands need to organize around their consumer segments. 

If an organization is trying to be fully integrated, then some serious thought needs to be given to how to break down the silos that exists around brands within the portfolio, particularly in packaged goods companies.  These silos tend to be product-based so if, for example, one of the company’s products is cream cheese, there’s a team that’s dedicated to marketing cream cheese.  In addition to the brand manager, it will most likely be made up of representatives from promotions, advertising, sales and PR.  Their goal is to figure out how to sell more cases of cream cheese.

Seems smart, right?  Not exactly.  As we point out in the report (and we credit Don and Heidi Schultz for pointing this out in their book “IMC: The Next Generation”), this way of organizing is a holdover from the industrial age when companies manufactured their products and pushed them onto consumers.

Our view—a response to the increasing fragmentation of the marketplace, along with the inescapable fact that consumers are in control of when, where, how and why they buy—is that companies that want to prosper in this century and beyond need to organize around their consumer segments. It’s about gathering a cross-functional team comprised of people from various departments of the company—not just marketing, but also R&D, customer marketing, IT, call centers, supply chain, consumer insights, and finance.  Everyone then brings their own expertise to bear, but it’s focused on understanding, communicating with, and serving, a particular consumer segment.  Ultimately, it’s about making the organization adapt to the consumer’s needs and not the other way around.

Wirtschafter gets it, and I like to think that he’s is looking at his major clients as the key consumers of his agency’s services.  The agency understands the financial value that their top clients have to the company.  Moreover, the talent agency business is like any other.  At the end of the day, they want to acquire talent that fits the profile of a “most valuable consumer,” keep them, and move them through the entire portfolio of their company’s offerings, where possible.

Admittedly, it’s going to be hard to get companies to change their focus, particularly given that this shift is somewhat nuanced.  However, the benefits of making this change—putting the consumer first and making him or her the priority for all areas of the company—will have ripple effects that will, I believe, accrue to the bottom line.

Posted by Rob Fields