Step out of the silos and into the matrix

William Bakker

3 March 2017

Many destination marketing organization (DMO) leaders struggle to organize and lead their team to be efficient and effective in today’s changing environment. Most DMOs still use a corporate structure that is a leftover from before the Internet arrived.

In those days, most DMO departments worked independently. Organizations divided marketing responsibilities geographically, which made sense in a time when every market had its own local media (TV, radio, newspapers, magazines, etc.) and its own trade network. Outcomes from Market A didn’t affect Market B. The destination brand was the only unifying factor and was typically managed by the agency that worked with the DMO’s head office. DMOs engaged their members and the tourism industry separately, while focusing on revenue opportunities (such as member fees and ad space), development (industry education), and supporting activities (hosting media trips, etc.) And the Meetings, Incentives, Conventions and Exhibitions (MICE) market was a different beast altogether.

There was no real reason for DMO departments to collaborate.

Modern cyber woman with matrix eye

Today, collaboration is essential.

Markets are no longer bound by geography because the Internet has no boundaries. Instead, influence spreads across borders, within passionate niche communities. This means that managing separate websites for different markets is inefficient.

The same thing is true for your DMO’s social media channels. Online travel agents (OTAs) operate globally. And in an economy fuelled by word-of-mouth and many voices that tell your destination’s stories, the experiences that your local tourism industry provides are a big part of your destination brand – and one aspect that can’t be managed by an outside agency. For this reason, destination development is key.

However, silos of communication are still common within DMOs, and they prevent the kinds of collaboration that you need in this integrated new environment. This is to be expected, because typical human behaviour is to focus on the outcomes you can control, even if it compromises overall results. That’s why we’ve seen that many DMOs with international offices tend to centralize digital, social and content marketing at head office. But even in smaller DMOs, the industry or MICE departments rarely talk to their colleagues who are responsible for online marketing.

Become a matrix organization to break out of silos

What’s the solution? DMOs can develop a matrix-like organizational structure. In a matrix organization, people share common objectives. This structure demands collaboration. If I were designing a DMO from scratch, I would create two departments (beyond Finance, Administration, Human Resources, IT, etc).

  1. A marketing department responsible for the destination’s markets (these are preferably organized by niches, but could include geographic markets, and would include the MICE industry).
  2. A functional department responsible for subject matter expertise and execution across branding, web, social media, content marketing, trade, etc.

In the marketing department, each marketing manager would need to:

  • Completely understand their target audience.
  • Identify the destination products and experiences that are important to the audience.
  • Map the end-to-end customer journey for their audience and describe the roadblocks, challenges and opportunities along the way.
  • Build relationships with key operators and other stakeholders.
  • Propose a marketing plan for their audience to management, including KPIs.
  • Finalize a plan based on the funding they receive from management.
  • Measure results of activities against the plan.

In the functional department, each subject matter expert would:

  • Have a deep knowledge of their area of responsibility.
  • Manage partners, agencies and suppliers.
  • Propose a plan for base activities.
  • Finalize a plan that combines base activities with specific plans from marketing managers.
  • Execute base activities.
  • Collaborate with marketing managers on projects and programs for specific audiences.
  • Measure the results of the base activities and marketing projects.

Functional areas of expertise can include brand, media/PR/influencer campaigns, website, social media, content, traditional advertising, trade, sales, industry training, destination development, etc. The larger the DMO, the more specific the areas of discipline will become, while smaller DMOs will require fewer functional managers but strong agency relationships. I would try to keep functional teams small and instead rely heavily on external partners in order to access to specialized skillets, remove bureaucracy and be nimble enough to change tactics.

Identify long-term goals and shared responsibilities

After the leadership team identifies long-term (five-year) goals through a strategic planning process, managers would submit their research-based plans. Senior management would then prioritize all plans and give the managers their marching orders by funding specific initiatives. In the end, functional managers and marketing managers would collaborate deeply to create an overall marketing plan for the year. This process requires time and energy, but it’s the most important thing your organization can do all year.

Pros and cons of the matrix model

The upside of this model is strong collaboration. DMO staff must collaborate, because they share objectives and responsibilities. For senior management, the planning process becomes much more sensible and rational because they will face less lobbying and infighting. Instead, managers now need one another in order to succeed. Power is distributed.

Although the model above doesn’t describe a textbook matrix organization, keep in mind that this is no silver bullet. There are real challenges with matrix organizational models. Collaboration requires a large investment of time and effort. Strong leadership and a supportive organizational culture are both important as well.

Regardless, today’s DMOs operate in an integrated marketing environment. Breaking through silos is an absolute requirement in order to stay relevant and competitive.

Related reading: Change management at the DMO: Why destinations need to be proactive

Featured image credit: Adobe Stock

2 Comments

  1. Paul Baron

    Nice work William. A thoughtful, informed and interesting article.

    Reply

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