Nearly 60 years ago, in 1954, management Guru Peter Drucker famously said ‘ There are only 2 basic functions for a business – Marketing and Innovation’, but if we look back in time, how much attention did marketing and innovation get at the C-suite and board level, not much. With the internet of things, internet of ideas and internet of people gaining momentum, marketing and innovation is set to find its way into the C-suite, boardroom and rightly so.
Why most of the CEOs missed out on marketing:
The last decade of the 20th century witnessed the emergence of a foe and friend for many CEOs and companies – the Digital Economy. Till then CEOs and companies were able to get more out of their old business models, products, services and the tendency was to have marketing work in isolation. Marketing was expected to and would communicate the product/service value in order to achieve the companies pre-set targets, which overtime stretched the gap between actual and favorable messages hence impacting the customers trust factor.
The first decade of the 21st century witnessed the digital economy increasingly pushing companies to change their business models, products and services at a rate that many were not comfortable with. Suddenly achieving incremental targets became more important and customer trends that challenge the numbers and organizational status quo became a threat – the result, so many companies ignored the signs till it was too late and perished.
Marketing can no longer be a function that focuses mainly on creative, brand driven advertising initiatives. Marketing is not about moving the products and services from average or good to great through campaigns, it’s about building and offering great customer experiences which includes building great products and services. CEOs such as Steve Jobs, Apple and Angela Ahrendts, Burberry were able to transform their businesses through great customer experiences by focusing on marketing and innovation. The market is now driving the importance of marketing and the average tenure of CMOs has moved up from 23.6 months (in 2004) to 45 months (in 2012) according to latest CMO tenure study by executive search consulting firm Spencer Stuart.
The big debate: The CMO of the Future
Over the last few years there has been so much debate about the future of CMOs – leading to roles such as Chief Commercial Officer, Chief Customer Officer, Chief Growth Officer, Chief Innovation Officer. Though its common sense that customer is key for a company’s existence, this was somehow lost in the process of marketing and C-suite discussions.
The issue is when a company has a truly innovative and/or valuable product/service, marketing can act as a turbo charger. When the products/services are not up to the mark and there are pre-set targets linking it to the financial performance of a company, marketing’s’ focus over time moves more into advertising, PR, communications. This progression then becomes the driver for the natural selection of skills required to run a marketing department in isolation instead of driving an enterprise wide marketing philosophy. Big brands and enterprises are uncomfortable with the connected world, where the real value as the customer sees it gets discussed, shared and the marketers are pushed to the sidelines of the value correction debate.( Read more: Brands, Businesses, People don’t get Social Media because it gets them)
A HBR article ‘ The New Path To The C-Suite’ points out that ‘A 2009 Heidrick & Struggles study found that more than 200 CCOs had been appointed worldwide since the title first appeared a decade earlier; more than 50 of the appointments occurred in 2008 alone’. Some examples of evolving CMO titles – Joe Tripodi, executive VP and chief marketing and commercial officer at Coca-Cola; Steve Easterbrook, executive VP and global chief brand officer at McDonald’s; and Tony Palmer, president, global brands and innovation at Kimberly-Clark.
The road ahead – Marketing technology is not the silver bullet
1/ Focus on the right ecosystem: While there is no doubt that marketing technology investments are on the rise as predicted by Gartner in Jan, 2012, companies seem to be mainly focussing on the ‘Company to Customer Ecosystem’ whereas customers are keen on the ‘Customer to Customer Ecosystem’. The empowered customer just shot the marketing funnel – Marketing has to move from being uni-directional, target favorable and paternal to multi-directional, value favorable and partner-like in order to thrive.
2/ Enterprise psychology will propel technology ROI: Companies that are not prepared to take care of the culture transformation required to leverage the marketing and extended enterprise technology will soon face ROI and business survival challenges. How good is a networking, analytics platform if the employees and partners have a closed mindset, where they don’t share ideas, own-up issues and collectively fix it. Corporates have to move back to a start-up mindset to re-start their business as The Future is about ‘Network Leadership’. The recent C-Suite study by IBM , ‘Customer activated Enterprise’ on ‘External forces shaping the future of their enterprise’ shows technology as #1 focus and people skills as #4, which is concerning as people skills will be the deciding factor in the years to come.
Who took marketing out of marketing? – the CEO. The 20th century market did not have the crowd wisdom and voice like it has now due to lack of customer impact technology (social networks, smartphones, tablets etc). The CEOs who were more numbers driven than market driven avoided shaking up the revenue streams by taking the well traveled path. Visionary CEOs like George Foreman (Kodak), Jeff Bezos (Amazon), Steve Jobs (Apple), Angela Ahrendts (Burberry), Phil Knight (Nike) had the vision and tenacity to create or embrace new trends.
The market will now force CEOs to have their CMOs, CIOs and CHROs (Chief Human Resource Officers) in their first circle or the next wave of CEOs will be current CMOs or CIOs – Digital transformation without Business Transformation will only buy time internally and create more complications. 21st century is the Age of Correction (through social networks) and not the Age of damage (trust deficit)which was actually the 20th century – companies that manage this transition well will put marketing back into marketing and make it enterprise wide. Culture and technology will become more important to improve marketing and innovation, hence customer value.