The CMO Is Evolving Into New Species With Vastly Broader Range

The CMO Is Evolving Into New Species With Vastly Broader Range

Big Data and Digital Demand Expertise in Both New and Traditional Areas of Marketing

By , . Published on January 15, 2014. 4

Seeking insight into how marketing is changing, we had conversations with dozens of CMOs and other C-suite executives, mined our firm’s ongoing study of marketing leadership trends, and tapped the direct observations of consultants across our global CMO practice. We found that the demands on marketing are growing far more eclectic, stretching marketing organizations and their leaders between divergent poles. The stretch is occurring across five critical axes:

Sophisticated Strategist vs. Entrepreneurial Trailblazer. Stable, mature markets offer large, reliable revenue streams, but competition tends to be fierce and growth potential is limited. Marketers must rely on intricate consumer insights and sophisticated strategies to eke out marginal gains. Emerging markets, in contrast, offer far less data to guide marketers, but far greater growth potential. The Entrepreneurial Trailblazer works creatively with what is available. In Africa, for example, more people have mobile phones than have access to electricity, and so mobile devices must be basic in design, to provide long battery life. As millions of Africans access the internet on a 2-inch cellphone screen, in black and white and text-only, marketers are skipping traditional TV advertising to move into the uncharted territory of advertising according to those parameters.

Business Leader vs. Marketing Guru. Companies increasingly require a CMO to be much more than a marketing star. Today’s CMOs are expected to help the CEO shape overall business strategy and guide how resources are allocated across the business. Metrics are a key driver of this shift. Historically, measures of marketing effectiveness could demonstrate only that marketing investments had created potential for the business to succeed. Today’s metrics can quantify marketing’s contributions to the top and bottom line. This is accelerating the trend toward assigning chief marketers broad business responsibilities.

Joseph Tripodi, executive VP and chief marketing and commercial officer of Coca-Cola, is a prime example. Just look at his official company bio: “Mr. Tripodi leads the global Marketing, Customer Management and Commercial Leadership efforts of the Company to develop and leverage its capabilities, brands and properties to meet the needs of consumers and customers worldwide to drive profitable growth.”

When Avon announced the appointment of Patricia Perez-Ayala as senior VP, CMO and global brand and category president, it noted: “Ms. Perez-Ayala will be responsible for global management of Avon’s brand and marketing, including consumer insights, commercial marketing, digital marketing, and also have oversight of Avon research & development, new product development and packaging, and the Liz Earle business.” Avon chose a proven general manager, with marketing at her core, to be its CMO.

We foresee more companies seeking top marketing officers with general management experience, as well as impeccable marketing credentials. The bar is being set ever higher.

Sector Specialist vs. Versatile Partner. Companies have often presumed that a CMO must rise within their own industry or one closely related. But many CEOs now want CMOs to be a versatile partner who can help make sense of all that is unfolding in the wider world, not just within one sector. For example, Citi’s chief brand officer, Dermot Boden, had never marketed in the financial sector, having formerly served as global chief marketing officer at LG Electronics and in marketing roles with Pfizer and Johnson & Johnson. Greg Revelle, senior VP and CMO at AutoNation, is a similar story. Prior to joining America’s largest automotive retailer, Revelle was VP of global online marketing for the travel platform Expedia.com. Earlier in his career, he was an investment banking analyst at Credit Suisse. Boden and Revelle each bring functional knowledge and abilities that are valued as more strategically essential, in a rapidly transforming marketplace, than deep industry knowledge.

Innovation Champion vs. Shopper Expert. Some organizations divide the role of the CMO into two areas of responsibility: an innovation champion focused on developing the pipeline for the future, three to five years out, and a shopper expert focused on delivering a P&L today. The logic is sound, given that each role demands different strengths. The innovation champion makes the organization a wellspring of ideas and ensures that new ideas are protected. The shopper expert builds deep, nuanced understanding of shopper behavior to deliver trial and repeat purchasing. Most CMOs are far more skilled at one or the other. But current and aspiring CMOs will need to acquire enough knowledge and experience outside their expertise to effectively lead both dimensions.

Digital Expert vs. Marketing Traditionalist. The power of big data and digital marketing has created a rush to infuse traditional marketing teams with digital talent. The danger is that freshly recruited experts in social media, SEO, analytics and other digital disciplines will fail to mesh with the traditional operation, with its expertise in areas like branding, promotion and product management. In effect, this creates two marketing functions that work in proximity, but not fully together. CMOs will be increasingly challenged to ensure that marketing is integrated and cohesive as its resident expertise grows markedly more diverse.

ABOUT THE AUTHOR
Dick Patton co-leads the global chief marketing officers practice at Egon Zehnder and Rory Finlay leads the global consumer products practice.
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McKinsey: The strength of ‘weak signals’

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Snippets of information, often hidden in social-media streams, offer companies a valuable new tool for staying ahead.
February 2014 | byMartin Harrysson, Estelle Métayer, and Hugo Sarrazin

As information thunders through the digital economy, it’s easy to miss valuable “weak signals” often hidden amid the noise. Arising primarily from social media, they represent snippets—not streams—of information and can help companies to figure out what customers want and to spot looming industry and market disruptions before competitors do. Sometimes, companies notice them during data-analytics number-crunching exercises. Or employees who apply methods more akin to art than to science might spot them and then do some further number crunching to test anomalies they’re seeing or hypotheses the signals suggest. In any case, companies are just beginning to recognize and capture their value. Here are a few principles that companies can follow to grasp and harness the power of weak signals.
Engaging at the top

For starters, given the fluid nature of the insights that surface, it’s often useful to get senior leaders actively involved with the social-media sources that give rise to weak signals. Executives who are curious and attuned to the themes emerging from social media are more likely to spot such insights.1 For example, a global manufacturer whose high quality and low prices were the topic of one customer’s recent social-media post almost certainly would not have examined it but for a senior executive who was a sensitive social “listener” and found its implications intriguing. Did the company have an opportunity, the executive wondered, to increase prices or perhaps to seek market share more aggressively at the current prices?

To find out, the executive commissioned research to quantify what had started out as a qualitative hunch. Ultimately, the low-price perception turned out to be an anomaly, but the outsize perception of the product’s quality was widely held. In response, the company has started funneling marketing resources to the product in hopes of building its market share by capitalizing on its quality and differentiating it further from the offerings of competitors.
Listening and mapping

As the manufacturer’s example implies, spotting weak signals is more likely when companies can marshal dispersed networks of people who have a deep understanding of the business and act as listening posts. One global beverage company is considering including social-media awareness in its hiring criteria for some managers, to build its network and free its management team from “well-rehearsed habits.”

Weak signals are everywhere, of course, so deciding when and where to keep the antennae out is critical. One such situation involves a product, market, or service that doesn’t yet exist—but could. Consider the case of a global advertising company that was investigating (for one of its clients) a US growth opportunity related to child care. Because no one was offering the proposed service, keyword searches on social media (and on the web more broadly) wouldn’t work. Instead, the company looked to social-media platforms where it might find weak signals—finally discovering an online content service that allows users to create and share individualized newspapers.

In the child-care arena, digital-content channels are often curated by mothers and fathers, who invite conversations about their experiences and concerns, as well as assemble relevant articles by experts or government sources. Analysts used semantic clues to follow hundreds of fine-grained conversations on these sites. The exercise produced a wealth of relevant information about the types of services available in individual markets, the specific levels of service that parents sought, the prices they were willing to pay, the child-care options companies already sponsored, the strength of local providers (potential competitors), and the people in various communities who might become ambassadors for a new service. This wasn’t a number-crunching exercise; instead, it took an anthropological view of local child care—a mosaic formed from shards of information found only on social media. In the end, the weak signals helped the company to define the parameters of a not-yet-existing service.
Spotting visual clues

It’s also useful to search for weak signals when customers start engaging with products or services in new, tech-enabled ways, often simply by sharing perceptions about a company’s offerings and how they are using them. This can be hard for companies to relate to at first, as it’s quite removed from the usual practice of finding data patterns, clustering, and eliminating statistical noise. Spotting weak signals in such circumstances requires managers and employees to have the time and space to surf blogs or seek inspiration through services such as Tumblr or Instagram.

As intangible as these techniques may sound, they can deliver tangible results. US retailer Nordstrom, for example, took an early interest in the possibilities of Pinterest, the digital-scrapbooking site where users “pin” images they like on virtual boards and share them with a larger community. Displayed on Pinterest, the retailer’s products generate significant interest: the company currently has more than four million followers on the site.

Spotting an opportunity to share this online engagement with in-store shoppers, the company recently started displaying popular Pinterest items in two of its Seattle-area stores. When early results were encouraging, Nordstrom began rolling out the test more broadly to capitalize on the site’s appeal to customers as the “world’s largest ‘wish list,’” in the words of one executive.2 The retailer continues to look for more ways to match other customer interactions on Pinterest with its products. Local salespeople already use an in-store app to match items popular on Pinterest with items in the retailer’s inventory. As the “spotting” ability of companies in other industries matures, we expect visual tools such as Pinterest to be increasingly useful in detecting and capitalizing on weak signals.
Crossing functions

As the Nordstrom example demonstrates, listening for weak signals isn’t enough—companies must channel what’s been learned to the appropriate part of the organization so the findings can influence product development and other operational activities. Interestingly, TomTom, a company that offers products and services for navigation and traffic, found that the mechanism for spotting weak signals proved useful in enhancing its product-development process.

As part of normal operations, TomTom monitored social media closely, mining conversations to feed into performance metrics for marketing and customer-service executives. The normal process changed after an attentive company analyst noted that users posting on a UK forum were focused on connectivity problems. Rather than let the tenuous comments get lost in the company’s performance statistics, he channeled them to product-development teams. To resolve the issue, the teams worked directly—and in real time—with customers. That helped short-circuit an otherwise costly process, which would have required drivers using TomTom’s offerings to check out connectivity issues in a number of locales. The broader payoff came in the form of new R&D and product-development processes: TomTom now taps directly into its driving community for ideas on design and product features, as well as to troubleshoot new offerings quickly.

At most companies, weak signals will be unfamiliar territory for senior management, so an up-front investment in leadership time will be needed to clarify the strategic, organizational, and resource implications of new initiatives. The new roles will require people who are comfortable navigating diverse, less corporate sources of information.

Regardless of where companies observe weak signals, the authority to act on them should reside as close to the front lines as possible. Weak signals are strategic enough to demand top-management attention. They are sufficiently important to the day-to-day work of customer-service, technical-development, and marketing teams to make anything other than deep organizational engagement unwise.
About the authors

Martin Harrysson is an associate principal in McKinsey’s Silicon Valley office, where Hugo Sarrazin is a director; Estelle Métayer, an alumnus of the Montréal office, is an adjunct professor at McGill University, in Montréal.

Google Strategy

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The Mobile Strategy Is the Strategy

The Mobile Strategy Is the Strategy

by Chuck Martin , mCommerce Daily email newsletter.

Some interesting insights that pertain to mobile commerce came out of today’s Mobile Insider Summit.

In the opening keynote, JWT Executive Creative Director Eric Weisberg said: “If you don’t have a mobile strategy in 2013, you don’t have a strategy at all.”

Though he was referring to mobile in general, this view and others can easily be applied specifically to commerce.

For example, if a retailer or brand does not have a path on how to interact with mobile shoppers in the future, they have a great chance to fall behind or totally fail.

Weisberg’s general advice to marketers was to build on what people are doing rather than interrupt what they’re doing.

This could easily apply to in-aisle shoppers. Rather than sending ‘interrupting’ ad messages, markets could send more thoughtful and useful service-oriented messages.

The hypothetical example Intel has used in the past is that when a shopper is in a store trying to decide which computer chip is best, to send a signal to illuminate each computer with a certain chip.

An example at the summit was in grocery shopping, to highlight specific products in-aisle that pertain to someone with specific dietary requirements. Rather than an irrelevant ad message at the moment, the mobile shopper could be sent advice helping them do what they are in the process of doing, in this case shopping and searching for specific foods.

At one of the roundtable sessions entitled “What Does a Mobile Strategy Look Like” yesterday, there also was more a less a consensus that a mobile strategy should be more accurately viewed as a strategy, inferring that mobile is core to any overall business strategy.

The very thoughtful participants at the summit who are grappling with the complex and nitty-gritty strategies and tactics for moving mobile forward totally get this.

But when they leave after the end of the three-day summit tomorrow, some will return to face the realities of under-resourced mobile efforts.

However, it could be worse. They could be in one of those companies that does not have a strategy at all.

Peter Drucker On Leadership

 
 

Ideas
Peter Drucker On Leadership
Rich Karlgaard, 11.19.04, 6:00 AM ET

NEW YORK – Peter F. Drucker was born 95 years ago today–can it be possible?–in Vienna. The universally known writer, thinker and lecturer now is nearly deaf and doesn’t get around like he used to. He stopped giving media interviews about a year ago. But in late October, Drucker granted an exception to Forbes.com at the urging of Dr. Rick Warren, the founder and head of the Christian evangelical Saddleback Community Church in Lake Forest, Calif.

 
Peter F. Drucker at his home in California
 

The Drucker-Warren relationship may surprise many readers, but it goes back two decades, to when the young minister came to Drucker for advice. Under Drucker’s tutelage, Warren’s own success as a spiritual entrepreneur has been considerable. Saddleback has grown to 15,000 members and has helped start another 60 churches throughout the world. Warren’s 2001 book, The Purpose-Driven Life, is this decade’s best seller with 19.5 million copies sold so far and compiling at the rate of 500,000 per month.

Warren and I met at Drucker’s surprisingly spartan home in Claremont, Calif., on a cloudy Tuesday morning. We were greeted by Drucker’s wife, Doris, and ushered into the den for what developed into a two-hour conversation. During the first 30 minutes, Drucker–a religious man himself, albeit of a more muted Episcopalian type as compared to Warren’s exuberant brand of Southern Baptist–advised Warren on the challenges of ministry and church building. This consultation is one Drucker and Warren have engaged in twice yearly for two decades. For the last 90 minutes we moved to broader topics. Below are Drucker’s thoughts on leadership. (Click here for Drucker’s official biography.)

What Needs to Be Done

Successful leaders don’t start out asking, “What do I want to do?” They ask, “What needs to be done?” Then they ask, “Of those things that would make a difference, which are right for me?” They don’t tackle things they aren’t good at. They make sure other necessities get done, but not by them. Successful leaders make sure that they succeed! They are not afraid of strength in others. Andrew Carnegie wanted to put on his gravestone, “Here lies a man who knew how to put into his service more able men than he was himself.”

Check Your Performance

Effective leaders check their performance. They write down, “What do I hope to achieve if I take on this assignment?” They put away their goals for six months and then come back and check their performance against goals. This way, they find out what they do well and what they do poorly. They also find out whether they picked the truly important things to do. I’ve seen a great many people who are exceedingly good at execution, but exceedingly poor at picking the important things. They are magnificent at getting the unimportant things done. They have an impressive record of achievement on trivial matters.

Mission Driven

Leaders communicate in the sense that people around them know what they are trying to do. They are purpose driven–yes, mission driven. They know how to establish a mission. And another thing, they know how to say no. The pressure on leaders to do 984 different things is unbearable, so the effective ones learn how to say no and stick with it. They don’t suffocate themselves as a result. Too many leaders try to do a little bit of 25 things and get nothing done. They are very popular because they always say yes. But they get nothing done.

Creative Abandonment

A critical question for leaders is, “When do you stop pouring resources into things that have achieved their purpose?” The most dangerous traps for a leader are those near-successes where everybody says that if you just give it another big push it will go over the top. One tries it once. One tries it twice. One tries it a third time. But, by then it should be obvious this will be very hard to do. So, I always advise my friend Rick Warren, “Don’t tell me what you’re doing, Rick. Tell me what you stopped doing.”

The Rise of the Modern Multinational

The modern multinational corporation was invented in 1859. Siemens invented it because the English Siemens company had grown faster than the German parent. Before the Second World War, IBM was a small maker, not of computers, but of adding machines. They had one branch in England, which was very typical for the era. In the 1920s, General Motors bought a German and English and then Australian automobile manufacturer. The first time somebody from Detroit actually visited the European subsidiaries was in 1950. A trip to Europe was a big trip. You were gone three months. I still remember the excitement when the then head of GM went to Europe in the 1920s to buy the European properties. He never went back.

21st Century Organizations

Let me give you one example. This happens to be a consulting firm headquartered in Boston. Each morning, between 8 A.M. and 9 A.M. Boston time, which is 5 A.M. in the morning here in California and 11 P.M. in Tokyo, the firm conducts a one-hour management meeting on the Internet. That would have been inconceivable a few years back when you couldn’t have done it physically. And for a few years, I worked with this firm closely and I had rented a room in a nearby motel and put in a videoconferencing screen. Once a week, I participated in this Internet meeting and we could do it quite easily, successfully. As a result of which, that consulting firm is not organized around localities but around clients.

How To Lead a 21st Century Organization

Don’t travel so much. Organize your travel. It is important that you see people and that you are seen by people maybe once or twice a year. Otherwise, don’t travel. Make them come to see you. Use technology–it is cheaper than traveling. I don’t know anybody who can work while traveling. Do you? The second thing to say is make sure that your subsidiaries and foreign offices take up the responsibility to keep you informed. So, ask them twice a year, “What activities do you need to report to me?” Also ask them, “What about my activity and my plans do you need to know from me?” The second question is just as important.

Prisoner of Your Own Organization

When you are the chief executive, you’re the prisoner of your organization. The moment you’re in the office, everybody comes to you and wants something, and it is useless to lock the door. They’ll break in. So, you have to get outside the office. But still, that isn’t traveling. That’s being at home or having a secret office elsewhere. When you’re alone, in your secret office, ask the question, “What needs to be done?” Develop your priorities and don’t have more than two. I don’t know anybody who can do three things at the same time and do them well. Do one task at a time or two tasks at a time. That’s it. OK, two works better for most. Most people need the change of pace. But, when you are finished with two jobs or reach the point where it’s futile, make the list again. Don’t go back to priority three. At that point, it’s obsolete.

How Organizations Fall Down

Make sure the people with whom you work understand your priorities. Where organizations fall down is when they have to guess at what the boss is working at, and they invariably guess wrong. So the CEO needs to say, “This is what I am focusing on.” Then the CEO needs to ask of his associates, “What are you focusing on?” Ask your associates, “You put this on top of your priority list–why?” The reason may be the right one, but it may also be that this associate of yours is a salesman who persuades you that his priorities are correct when they are not. So, make sure that you understand your associates’ priorities and make sure that after you have that conversation, you sit down and drop them a two-page note–“This is what I think we discussed. This is what I think we decided. This is what I think you committed yourself to within what time frame.” Finally, ask them, “What do you expect from me as you seek to achieve your goals?”

The Transition from Entrepreneur to Large Company CEO

Again, let’s start out discussing what not to do. Don’t try to be somebody else. By now you have your style. This is how you get things done. Don’t take on things you don’t believe in and that you yourself are not good at. Learn to say no. Effective leaders match the objective needs of their company with the subjective competencies. As a result, they get an enormous amount of things done fast.

How Capable Leaders Blow It

One of the ablest men I’ve worked with, and this is a long time back, was Germany’s last pre-World War II democratic chancellor, Dr. Heinrich Bruning. He had an incredible ability to see the heart of a problem. But he was very weak on financial matters. He should have delegated but he wasted endless hours on budgets and performed poorly. This was a terrible failing during a Depression and it led to Hitler. Never try to be an expert if you are not. Build on your strengths and find strong people to do the other necessary tasks.

The Danger Of Charisma

You know, I was the first one to talk about leadership 50 years ago, but there is too much talk, too much emphasis on it today and not enough on effectiveness. The only thing you can say about a leader is that a leader is somebody who has followers. The most charismatic leaders of the last century were called Hitler, Stalin, Mao and Mussolini. They were mis-leaders! Charismatic leadership by itself certainly is greatly overstated. Look, one of the most effective American presidents of the last 100 years was Harry Truman. He didn’t have an ounce of charisma. Truman was as bland as a dead mackerel. Everybody who worked for him worshiped him because he was absolutely trustworthy. If Truman said no, it was no, and if he said yes, it was yes. And he didn’t say no to one person and yes to the next one on the same issue. The other effective president of the last 100 years was Ronald Reagan. His great strength was not charisma, as is commonly thought, but that he knew exactly what he could do and what he could not do.

How To Reinvigorate People

Within organizations there are people who, typically in their 40s, hit a midlife crisis when they realize that they won’t make it to the top or discover that they are not yet first-rate. This happens to engineers and accountants and technicians. The worst midlife crisis is that of physicians, as you know. They all have a severe midlife crisis. Basically, their work becomes awfully boring. Just imagine seeing nothing for 30 years but people with a skin rash. They have a midlife crisis, and that’s when they take to the bottle. How do you save these people? Give them a parallel challenge. Without that, they’ll soon take to drinking or to sleeping around. In a coeducational college, they sleep around and drink. The two things are not incompatible, alas! Encourage people facing a midlife crisis to apply their skills in the non-profit sector.

Character Development

We have talked a lot about executive development. We have been mostly talking about developing people’s strength and giving them experiences. Character is not developed that way. That is developed inside and not outside. I think churches and synagogues and the 12-step recovery programs are the main development agents of character today.

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20 Technology Trends for 2013

Frog Design has graciously shared their 20 technology trends for 2013, which includes the usual suspects such as mainstreaming of 3D printing and the further humanising of technology. No big surprises, but still a good read anyway. Enjoy!