Just when the marketing team was starting to jam, you hear: “We’re reorganizing… We’re going to pull product marketing into new business units to accelerate focus and growth of [X]...”

What?!

If you haven’t lived through a business unit structure before, this moment can feel disorienting. If you have lived through it, you may have a little PTSD.

In this article, I break down three predictable problems CMOs run into, how to reduce chaos, and how to keep perspective (and a little optimism). Many of my clients face this challenge, and I’ve been through it at five companies personally!

Why Companies Move to Business Units

Companies move to business units when they want focus, accountability, and increased growth in a new product, industry, or focus area. This can be their first multi-product, a big company focusing strategy, or a new acquisition they don’t want to break apart. Creating a BU creates a team that really cares about something that might get lost in a bigger company. But the tension between centralization and decentralization is real.

The General Manager Arrives

When companies move to business units, they typically hire or appoint a general manager to lead. This is often a very senior executive, sometimes at a President or near C-suite level, who “philosophically” owns profit and loss.

I say philosophically because, in B2B tech companies, the GM often owns a sub-set of full P&L and is forced to influence across the business still.

GMs usually own product management, engineering, and sales engineering, plus an allocated budget for marketing. Sometimes they get direct ownership of sales. Sometimes they get direct ownership of product marketing, sometimes just dotted-line ownership. PMM ownership brings positioning, market research, messaging, and content closer to the business unit’s specific goals and growth targets. This is where things start to get complicated for the CMO.

Problem #1: Marketing Loses Its “Brain”

When marketing loses product marketing to business units, there’s a big problem. Product marketing is often the strategy center of marketing. It’s where positioning, market intelligence, and deep customer understanding live. It informs campaigns, demand generation, public relations, analyst strategy, and sales enablement. It has to be in lock-step for things to perform well.

The intent is good. Closer alignment to BU goals. Faster execution, but the unintended consequence is fragmentation. Instead of one shared source of truth about the market and the company’s differentiation, you end up with multiple local optimizations.

Problem #2: Business Units Drift From the Corporate Story

Once product marketing lives inside the business units, another issue almost always emerges. Business unit teams naturally optimize for what helps their business win, sometimes at the expense of what makes sense for the company as a whole.

At this point, many CMOs end up hiring or inventing a new function, often called Corporate Product Marketing, Portfolio PMM, or Marketing Intelligence. This role exists to pull together overall strategy, positioning, market intelligence, and campaign foundations, even after the original product marketing team has been fully distributed into the business units.

It’s a necessary correction, but it’s also expensive and politically delicate. You’re rebuilding something you just dismantled.

Problem #3: Shared Resources Become a Political Minefield

The third challenge is resource allocation. Many marketing teams remain centralized while being expected to support multiple business units. Design, email marketing, paid demand generation, campaign operations. They don’t belong to any one BU, but every BU depends on them.

This creates complexity for the CMO, who has to decide allocation at a macro level, and daily friction for individual contributors trying to prioritize their work.

At Atlassian, this was most painful in the design organization and in email marketing. We initially used a round-robin intake model. On paper, it maximized shared capacity. In reality, every business unit felt underserved.

What ultimately worked was allocating individual people to business units based on a combination of current revenue scale and future growth potential. Each business unit had a fixed team and had to prioritize within that constraint.

In email, we agreed on a specific allocation of emails: the large business unit received 50% , the medium, 25%, the smallest, 10%, and corporate retained 15%. We lost some shared-capacity benefits, but the model reduced conflict dramatically.

The Core Tension (and How to Manage It)

The hardest part of a business unit reorg isn’t the org chart. It’s alignment. General managers are under intense pressure to grow their business. That often means prioritizing what’s best for the business unit over what’s best for the company. While this tension can be frustrating for CMOs, it’s also the entire point. BUs exist to create focus where focus would otherwise be diluted in a diversified portfolio.

The mistake most companies make is letting that tension play out informally. When allocation and prioritization get negotiated on the fly, in every meeting and at every level, politics multiply and frustration spikes.

Here’s what I’ve learned to do instead:

1. Force clarity before chaos

Agree on allocation frameworks as early as possible. People, design capacity, email volume, campaign dollars. Agree on the model instead of renegotiating priorities request by request. Clear frameworks don’t eliminate conflict, but shift debates from personal to structural.

2. Protect the “brain” of marketing

If product marketing moves into the business units, someone must be explicitly responsible for corporate or portfolio product marketing. Someone needs to own overall positioning, market intelligence, and how the pieces fit together into a coherent company story.

3. Accept the tension as designed

Business units will sometimes optimize for themselves at the expense of the whole. That’s not a failure of leadership or collaboration. It’s a structural tradeoff. The CMO’s role is not to eliminate the tension, but to manage it consciously and keep it from turning into chaos or resentment.

4. Zoom out and keep perspective

The first time I got caught in business unit politics, I got incredibly worked up. I couldn’t see that this was a stage of the business. These problems can feel (personal) and permanent when you’re inside them. At Atlassian, Oracle, and across many companies I’ve advised, there’s a constant ebb and flow between centralized efficiency and decentralized focus. Just as you get comfortable with one model, the company often swings back the other way. Hold on and take it all in stride.

P.S. Sales Faces Similar (Sometimes Worse) Challenges

Sales organizations face many of the same challenges in a business unit structure. Sometimes sales teams live fully inside the business units. Sometimes business units influence and enable a centralized sales team. Both models have real benefits and real drawbacks.

With BU-owned sales, profit, and loss ownership becomes more real, but customers can get a fragmented experience if multiple reps reach out independently. In overlay models, prioritization becomes the challenge. Core sales teams tend to focus on the fastest, easiest paths to commission.

I’ve seen companies acquire another business, keep it as an independent business unit, and make its sales team an overlay, only to struggle because the core sales team never truly prioritized the product. The BU couldn’t break through its own company to reach the customer.

That’s a longer conversation for another day, but it’s worth knowing marketing is not the only one struggling through the strategy.

Hang in there! BUs can drive growth too

Business units can cause a lot of complexity (and sometimes pain) but they can also drive real focus, learning, and GROWTH, which every CMO desires most.

The CMO can’t eliminate the tension caused by the BU design, it’s stucturual. But they can try to manage through it with clarity, perspective, and optimism : )

Any other advice you’d share from your hard-earned experience?

Carilu Dietrich is a former CMO, most notably the head of marketing who took Atlassian public. She currently advises CEOs and CMOs of high-growth tech companies. Carilu helps leaders operationalize the chaos of scale, see around corners, and improve marketing and company performance.