Marketing teams at companies have routinely partnered with external firms, such as advertising and creative agencies, to achieve strategic goals and execute their book of work. As the marketing function’s responsibilities grow in an era of digital transformation, they are increasingly relying on a different kind of organizational form: the temporary organization. A new study in the Journal of Marketing provides a playbook companies can use to align their marketing needs against organizational form, to identify and address common pitfalls, and to structure and manage teams effectively.
Temporary organizations bring diverse contributors to work on a wide array of initiatives, including product innovation, advertising, selling, and event management. Temporary organizations can increase organizational agility and drive results in a short period of time. Participants can include thought leaders, vendors, consultants, gig economy workers, employees, and even competitors. One study has described them as “the organizational equivalent of a one-night stand.”
While their use is increasingly prevalent with cloud-based talent pools and digital collaboration, the properties of temporary organizations are not well-understood. Their inherent characteristics, which include a lack of shared history among members and uncertain future interactions, can create organizational challenges. Members are often working together for the first time, which makes selection of the right talent a critical undertaking. In addition, temporary organization members do not share the same incentives as company employees, which creates enforcement problems. When not appropriately managed, these challenges can lead to cost overruns and compromised performance.
Our research team sought to rectify that gap by deepening companies’ understanding of temporary organizations and how best to leverage them. We identified three types of temporary marketing organization that vary in terms of member selection and enforcement qualities:
- The stand-alone temporary organization is composed of members who have not worked together in the past and are not expected to do so in the future after the task has been completed. Members collaborate on efforts such as radical innovation or one-off product launches. This model faces unique enforcement problems due to its discrete time frame, which creates weak incentives for team cooperation. One strategy to counteract this problem is to provide financial incentives, such as revenue-sharing contracts, that align parties’ interests.
- In the hybrid temporary organization, members may have worked together in the past, but have limited expectation of doing so in the future. Representative projects include feature film production and marketing campaigns. Again, this type of organization has limited enforcement mechanisms to drive results.
- In a fully embedded temporary organization, members share organizational-level reputations and norms, even if they have not directly worked together in the past. They may also find themselves interacting again on future projects. Examples include internal consulting units or new product development teams within a permanent organization. This type of temporary organization has explicit enforcement mechanisms, including low-powered incentives such as promotions and non-monetary rewards, as well as centralized authority and monitoring mechanisms.
Companies also need to consider portability (whether selection and enforcement needs may be portable or supplied exogenously), either from pre-existing agent relationships (in the case of a hybrid temporary organization) or from a permanent organization (in the case of a fully embedded one).
Our team created a framework and easy-to-use playbook that use the three organizational forms and the “three Ts”—task, time, and composition of the team—to discuss their makeup.
Key propositions are:
- Task: The more novel the task, the greater the need for organization-specific selection and enforcement mechanisms. Thus, it is more likely that stand-alone temporary organizations will be used over hybrid organizations (which do not provide portable selection benefits) or fully embedded organizations.
- Time: The shorter the duration of the task, the less feasible it is to craft organization-specific selection and enforcement mechanisms. Thus, it is more likely companies will use hybrid temporary organizations (which have portable enforcement benefits) instead of stand-alone forms (which are time-consuming to create) or fully embedded forms (which have less portable selection and enforcement benefits).
- Team: The more diverse the team, the greater the need for enforcement through low-powered incentives. Thus, it is more likely companies will use fully embedded temporary organizations instead of hybrid and stand-alone forms.
- Creativity: The closer the match between the novelty of a temporary marketing organization’s task and its selection efforts, the more creative is its output.
- Speed: The closer the match between the novelty of a temporary marketing organization and its selection efforts, the greater its decision-making speed.
Managers can use the playbook and its inputs to design temporary organizations and manage them to achieve desired results. In addition, they can use the playbook to determine the best mechanisms to ensure the optimal selection of team members and enforcement of their behavior throughout the duration of the task, depending on the recommended form of temporary organization. Doing so will help managers ensure that temporary organizations achieve desired performance outcomes.
Go to the Journal of Marketing