Marketing Recoded: The CMO Clinic
September 30, 2021 at Adlatina, Latin America (online)
CMOs should make the best CEOs.
Marketers have a deep understanding of markets, how the future is emerging, what the customers of today and tomorrow are demanding, how competitors are evolving, the best new ideas around the world, and therefore what it will take to drive future innovation and growth. Yet only 11% of CEOs come from a marketing-related background, far behind those who were CFOs or COOs. Finance and operations matter, but they don’t move the organisation forwards.
Too many marketers get caught up in the tactics – perfecting the creative execution of advertising, debating the intricacies of price changes, ensuring that their search engine positioning is optimised, a slave to quarterly revenues, or maybe even the sales team. The driver for ever great data analytics, the use of precision marketing tools, the desire for real time engagement, has dragged – or enticed – marketing leaders into this short-term. Yes, it matters, but it’s not everything.
Marketers should be stepping up to drive strategy, innovation, and change across the organisation. If not them, then who?
One of the most profound moments of my own marketing career was when working with Coca Cola, their CMO had a last-minute idea to rebrand his global marketing plan as the global growth plan. Suddenly everyone in the executive team wanted to see it, read it, be part of it. Suddenly it became a conversation not about reducing the marketing budget, but how to find more budget to fund additional growth. Marketers are the growth drivers, and actually create over 3x more economic value than any other function in the business (based on a research project I did with Philip Kotler’s input and a team of economists). And marketers have some indispensable tools – brands, customers, innovation – to achieve this growth.
The problem is that too many marketers live in an echo chamber.
Some examples. Too many marketers talk about marketing as “their industry”. It’s not. They are instead professionals contributing towards their business in its own industry – banking, retail or whatever. This tribal motivation can bond us as a professional community, and focus us on functional deliverables, but it diverts us from the real contribution marketers can make to organisations, and their close allegiance and integration with cross-functional colleagues. The exception are the leaders and their teams who have repositioned themselves more holistically as Customer Director, Chief Growth Officer, and the like.
Secondly. Too many marketers have a far too cosy relationship with their creative agencies. It’s like they outsource their creativity to the agency, who still largely take a myopic view (of course, there are many types of agencies, but the ad agencies still tend to dominate relationships despite the diminishing share of spend on traditional media). Ad agencies themselves describe their world as “adland”, a mythical place of long lunches and artistic platitudes (witness the headlines in Campaign). This symbiotic relationship, indulgence in each other, is what holds too many marketers and their businesses back. Creative agencies should be stepping up to contribute more, to make sense of a changing world, to challenge and stretch our collective imaginations.
Too many marketers don’t step up to think strategically, to become the future shapers, the innovation drivers, the change makers. Too many marketers are still obsessed with communications, at the expense of other aspects of marketing – not just product and service development, but channels and pricing can have a huge impact too, perhaps even greater than the most beautifully crafted ad campaign.
Instead marketers should be the visionaries behind how the future can be shaped, how markets will evolve, anticipating and driving change rather than just responding. They should be searching the world for new growth opportunities, for new consumer insights, for more innovative ideas. They should be the architects of new business models, and indeed, new market models. New ways for markets to work, new ways to unlock brands as the most valuable assets, new ways to achieve success. They should be the driving force of business futures, the catalysts and sage to the business leader, the instigator and enabler of change.
So here’s my manifesto for marketers:
- Marketers exist to drive the growth of a business. Yet few marketers have the confidence, or maybe capability, to define and drive the holistic innovation and growth strategies of their organisations
- The pandemic drove the biggest shift in consumer behaviour in our lifetime, yet few marketers really transformed their marketing in response, fewer still led a company-wide response to support or seize the opportunities it opened up.
- Change is driven by markets, yet marketers are rarely the change drivers, reimagining corporate strategies, business models and strategic priorities.
- Customer-centricity is obvious. Yet marketers persist in obsessing about defining purpose, brands, activities and results around old product-centric thinking.
- Innovation is probably the most powerful word in business, yet few marketers seek to define and lead the innovation agenda and programs across organisations. Not just new products, business-wide innovation.
- Most companies seek to be entrepreneurial. Their biggest disruption comes from entrepreneurs. Most entrepreneurs are marketers. Few marketers are entrepreneurial.
- Marketing creates three times more economic value than their operational colleagues, yet few marketers can make this case, or lead the company’s dialogue with investors. Oh, and growth needs to be profitable and sustainble too.
- Customers and brands are probably an organisation’s most valuable financial assets, yet few seek to articulate their value on balance sheets, or to fully exploit their latent potential.
Of course this is a development challenge too. I spend much of my time working on leadership development, and particularly on the T-Shaped development of functional experts as they step to become business leaders. At that point, typically when they enter the C-suite, they shift from the vertical (the focused, functional expert who has all the answers), to the horizontal (the open-mind business leader who asks all the questions). This is is a tough transition for many leaders to make, and is more about awareness and confidence as about capability or skill, but when they can let go of their vertical past, they can thrive.
Peter Fisk Q&A with Adlatina Media
When you came to Buenos Aires in 2019 and gave a lecture at the CMO Latam Summit, your big theme at that time was gamechanging. How much has the game changed since then?
Covid-19 has had huge impact on markets. Most significantly is the shift to digital platforms in work and life, from working and learning, to shopping and entertaining. Many retailers say we have seen a decade of change in one year.
However this is not simply about developing an online platform, it is about fundamentally different business models, that embrace a wide range of technologies. Big data and AI enable consumer experiences to be more personal and predictive. Robotics and 3D printing are rapidly transforming supply chains and manufacturing. This transforms sectors like retail and finance, but also transport and mining.
A great example of this would be Rappi from Colombia – the accelerated growth of the online delivery service, which is rapidly becoming a source for everything – not just grocery or restaurant deliveries. Other “super-apps” across the world, like Grab or Jio, have shown that once they embrace a financial engine, they become essential for everything to everyone. Mercado Libre is now starting to follow this model too.
Other examples would include PingAn, China’s largest financial services company, which extended into healthcare. It’s Good Doctor business now has a billion subscribers, offering AI-based patient diagnostics, video-streamed consultations, automated prescriptions and services, linked to physical clinics and hospitals. It is now the world’s largest online healthcare platform.
In your latest book “Business Recoded” you assert that business must be recoded. Do you think that the work of chief marketer officers should also be recoded?
Yes absolutely. Too many marketers are too obsessed about communications, and many are still stuck in the old world of advertising, being guided by their ad agencies to spend the majority of their budgets on old media.
The biggest disruption is in markets – (1) changing customers – new audiences, new priorities, new experiences – (2) changing sectors – blurred boundaries, new competitors, new business models – (3) changing geography – more pan-regional, reaching new geographies, new ecosystems.
The business, the CEO and executive team, need the CMO to be the pathfinder, to make sense of these fast-changing, uncertain and disrupted markets – to take the business in new directions, to drive innovation and growth.
CMO’s should most importantly champion the “growth plan” of the business, both short and longer-term. That doesn’t just mean how to engage existing customers in existing markets, but how to find new opportunities, to innovate in new ways.
The impact of a CMO being a “strategic growth leader” can change the market value of the company by 100% in a year (look at companies like NotCo in Chile, Nubank in Brazil, or more globally like Alibaba or Amazon, Tesla or Tencent).
The impact of a CMO being an “advertising guy” is probably 10% at most.
The CMO of Tesla doesn’t just focus on advertising cool cars, he is focused on how to develop the mobility network of the future – in a world where cars are autonomous, and nobody owns their own vehicle, people will subscribe to mobility operator networks. How is Tesla positioned to become the leader in this? In fact Tesla actually defines itself as an energy company, and is also focused on developing smart energy solutions for homes and cities. These are probably more valuable markets than cars!
Your new book “Business Recoded” is devoted to three major issues: inspiring leadership, strategic innovation and positive impact. How do these issues translate to the day-to-day life of a chief marketing officer?
Markets are the major source of change – rapidly disrupted and transformed. Marketers understand markets best, and should therefore be the catalysts and drivers of business change. (In the past, when markets were stable, most change happened internally, more driven by operational or culture leaders).
Also, sustainability has become much more important to customers and society, generally. The old model of sustainability was about reducing impact, about compliance and efficiency, now it is about using business and brands to create products and services. It is about creating brands as platforms for good, to engage customers, in changing behaviours, and driving more positive impacts. How can you have your product or service, and make the world better at the same time. A bit like the Toms shoes model, but applied in a commercial way to every kind of business.
Therefore CMOs are the drivers of growth and transformation, they are the executives who can make sense of the future, and find the path from today to tomorrow. Therefore their role is in
- Inspiring leadership – sense making, vision shaping, growth finding, future defining, path finding, change driving, business connecting.
- Strategic innovation – reimagining how markets work, new market models, new business models – as well as new experiences, products and services.
- Positive impact – building brands as platforms for good, to enable customers to make a positive difference to their lives, their communities, and the world.
What are the challenges posed by digital transformation, how are the most innovative companies tackling it, and what, in your opinion, is the new role of the CMO in this context?
The biggest challenge of “digital innovation” is the description – too many companies seek to digitalise their existing strategies and business models. They don’t reimagine why, where or how to do business, they just automate the old model.
The challenge if therefore “business transformation” and understanding how the new technologies can enable things which were not previously possible. For example, how a big data enables the largest companies to offer personalised products and services as efficiently as it is to create the same product for everyone. Or consider how brands can now sell direct to customers, no longer needing intermediaries, creating richer customer experiences. Or consider subscription models, or co-creation models, or licensing models.
Digital technologies gives us the opportunity to reimagine business in so many ways. Take the Canadian company Shopify, which creates complete “solutions” for the smallest local business to become a global player – to create their online store, but also to manage their global inventory and distribution, marketing and administration. More generally, how can you be the Adobe, the Glossier, the Netflix, the Paypal, the Stitchfix, the Stripe, the Zozo, of your industry?
This is a challenge of strategic imagination – the choices of what your business could do, are virtually unlimited today. We need the creative, market-driven minds of CMOs to explore and find the best opportunities, to make the case for change, and then engage and align the organisation in transformation towards a better future.
What will your main message be to the chief marketing officers attending the CMO Clinic?
Now is the time to reimagine your business. It’s time for CMOs to step up, to make sense of a changing world, to reinvent markets, and to recode business.
We will see more change in the next 10 years than the last 250 years. Change hugely accelerated by Covid-19. So as we get back to business, there is no going back to the old ways, we need to create the new ways of business.
Crisis has been a huge challenge, but now it can be a huge opportunity. We need CMOs with the courage to think different, to explore the future, and start to harness the power of the brands and business to create a better future.
Inspiring marketing leaders
So who are some of the world’s more enlightened marketers, the CMOs who are customer champions but also business innovators and growth drivers? Here are some examples:
Stephanie Buscemi, Salesforce
Salesforce’s CMO talks about the strategic challenge of building value in organisations, about brand purpose and promise. That purpose was is interesting. It gets thrown around with abandon, usually result in some mash-up of keywords which are neither understood or inspiring. Instead need real purpose, how the business will contribute towards a better world (in whatever way, not only around social-type issues), and then translating this into brands with real purpose, and made relevant for each person.
Chris Capossela, Microsoft
Microsoft’s CMO is “taking big swings: in the quest for success and discovering how failure is “the great instigator for growth.” What impresses me about working with Microsoft, one of my own biggest clients, is how they have real conscience, imagination and entrepreneurship. Their purpose is to enable customers to do more, not just sell products. This is where sales and marketing focus their effort (“your potential, our passion”) in tangible ways. They also truly embrace entrepreneurship – from design and lean thinking, to pizza teams and hackathons, debates on ethics and customers in their boardroom.
Carolyn Everson, Facebook
Facebook’s vice president of global marketing solutions leads the company’s relationships with top marketers and agencies. What’s interesting here is that Facebook is probably more of a media company than those associated with its agencies. In some ways its roles are therefore reversed compared to the norm. But the real power of a tech platform like Facebook, and Instagram and WhatsApp too, lies in its data, its networks, and power as platforms. Look, for example, at the rise of Instagram Shops, the development for social interaction, to a dynamic, realtime, platform for commerce.
Julia Goldin, Lego
Lego’s CMO discusses how tech presents massive opportunity for innovation and Lego’s approach to digital transformation. Lego is a great example of digital transformation because it is classically not a tech company, and still has a heart in physical play. The ability to recognise the brand asset as far more than a product umbrella, enables it to develop in terms of new markets – from clothing to crafting, movies and theme parks – not as adjacencies but as one story. Brands anchored around ideas (led godt, meaning creative play) rather than products or categories, can achieve so much more.
Marc Pritchard, P&G
P&G’s Chief Brand Officer explores a future of technology that is allowing brands to find new ways to reach the consumer. Pritchard recognises that with a portfolio like P&G’s he has the power and reach to do so much more in the world. His focus on sustainability, driving the entire organisation to transform its practices, but equally enabling customers to apply their own impact too, is worth copying. He achieves this as an organisational leader. People look to him for strategic direction, for business priorities, and for innovation. He also backs this up, by showing it matters, and the impact it makes. The focus is on profitable growth not just revenue or share (anyone can create share without profit), and linking it to DCFs and economic value creation. Ultimately he is the guy investors look to, and in the analyst reports, to understand the organisation’s future potential.
Phil Schiller, Apple
Apple’s outgoing SVP talks about the company’s role in empowering developers to create the future of technology. Schiller is stepping down after being the right hand man in a $2 trillion journey of growth. What is remarkable about Apple’s incredible performance of the last 10 years, is that it has grown to almost 10x the size of Steve Jobs’ era without a real focus on radical product innovation (yes they are great, but from a product perspective its been evolution than revolution). It’s more about how they evolved, particularly as an ecosystem – think App Store, or iTunes – and as a portfolio. Some innovations under Schiller, enabled by his phenomenal brand halo, include the AirPods, with a business model creating the equivalent of a $250 billion business. Indeed as a brand, Apple has continued to shine, reaching across the world, and to all of our lives.
More than anything, marketing and marketers, have the potential to be so much more. The next 10 years will see more change than the last 250 years. Right now, as we slowly emerge from pandemic, every market is being shaken up, the rules rewritten, a new generation of brands emerging.
Now is the time to seize the seismic changes in consumer behaviour and aspiration, economic shifts and technological revolution. Now is the time to be the future shapers, business innovators and growth drivers. To be the energising, mobilising, progressive leaders of business. To be the change makers.