Tag Archives: cmo

How Incumbents Can Smother Startups

One of the most fun and inspiring endeavors I’ve undertaken in my post-corporate life has been to advise select early-stage companies, portfolio managers and accelerators.

Startups need lots of marketing advice, especially early on when there may not be a CMO on board. As a result, my work often involves defining audience targeting strategy and the value proposition (from the buyer’s perspective), building the messaging framework and then spending lots of time advising on how to navigate the corporate gauntlet.

The problem is, even with a well-defined marketing, communications and sales strategy, a startup at the pre-seed, seed or even A-round stages may not have the endurance to make it through the corporate gauntlet.  The effort is just too complex and time-consuming given the demands and limitations on a young company’s talent and the sensitivity to monthly cash burn.

You may say, well, the startup world is a bit Darwinian.  Only the fittest survive, and that is to be expected.

My bet is that while most everyone at work in the corporate world acknowledges their own bureaucracies, too few act on the recognition that their people, policies, and processes can absolutely affect startups’ survival, which, in turn, hurts enterprise efforts to transform and innovate. Those in the corporate world pay a price for killing or weakening these innovators, who are a source of new capabilities that established companies are unlikely to create on their own.

Corporate leaders can do something about it – if they can summon the leadership, courage and tenacity to do so.

What exactly is happening?

Here’s a sampling of what I see founders run into, once the introduction is made and there is an expression of interest to learn more.

First, a couple of months pass to get a meeting on the calendar, and to take place with at least some of the right people in attendance.

See also: How Startups Win Customers’​ Hearts  
 
The conversation after the presentation and demo moves to: “We love this tech, and it would do a lot for our organization…”

Yet, within a couple of follow-up meetings, phone-calls and other internal introductions, the conversation switches over to one of many variations on the big “but” …

  • But we have too many priorities.”
  • But we have to pick our battles with [fill in the blank – procurement, compliance, information security, et al.]
  • But we have so many open roles that there is no one here to lead the pilot.”
  • But we cannot get the support in ‘the business’; they are just focused on this quarter’s sales.”
  • But it turns out we already do this or can do it ourselves.” [This is often untrue.]

These are real quotes from real conversations with well-paid, smart and accomplished corporate managers who get the reality of declining customer franchises, diminished brand commitment, new and unbounded competitors, legacy distribution, etc. Some of them are actually – yes – digital natives, and all are at least digitally enlightened.

I wonder, are they simply beaten down? Are they afraid? Do they define their roles as being great at repeating how things have always been done, and not deviating too much? Or are they trapped inside a legacy mindset, an outmoded idea of the value of speed (no, you cannot expect the world to wait for your annual planning cycle), and higher internal hurdles for getting approval to do new stuff than to maintain the status quo?

There are common characteristics inside large enterprises where the future is being advanced with meaningful adoption of some of the imaginative business models, offerings and technologies developed by startups:

  • Leaders are allowing the processes, policies and procedures that are fit for the purpose of innovating to co-exist alongside those that are essential to sustaining earnings predictability.
  • Leaders are willing to try new things and know that failure is a natural and expected part of experimentation.
  • Leaders are speaking up and advocating for policy and process change and holding themselves and their people accountable for delivering the short term while also taking steps to the future.
  • Leaders are developing their people, ensuring collaboration and diversity through action not just talk and having their people’s backs when they take risks.

See also: Who Will Win: Startups or Carriers?  

Startups are discouraged by enterprise relationship opportunities where the pace and bureaucracy are simply too slow and complex to be practical when they have to demonstrate milestones every month to their investors.

Is your company or another one you know of missing out as a result? Do you believe something can be done to change?

CMOs Behind the Eight Ball

Recently, I was a panelist at How Marketers Drive Growth – sponsored by Forbes, along with TD Ameritrade CMO Denise Karkos, Tableau CMO Elissa Fink, Sprinklr President and COO Carlos Dominguez and Head of Forbes CMO Practice Bruce Rogers. We talked strategies to solve CMOs’ quest: proving marketing ROI. This precious goal is proving to be a bit like searching for the Holy Grail – an elusive goal with danger along the path to finding it. No wonder CMO tenure continues to decline and is the shortest of any member of the C-suite, based on studies published earlier this year.

Executive expectations across sectors and at companies ranging from seed stage to mature brands suggest CMOs are in more perilous positions than ever. They have greater accountability, coupled with limited additional formal authority. They are tasked to deliver ROI-based leads, accounts, sales, traffic – whatever the volume driver of a brand’s revenue is – with influence as their major weapon to win the resources and support to accomplish tougher goals. Oh, and another thing … they have to move at lightening speed and bring together a mix of hard-to-find talent within their own function, all the while demonstrating super-heroic performance including winning over peers to the unfamiliar.

See also: Wanted by the CEO: A Superhero CMO  

CMOs who succeed at getting out from behind the eight ball are those who will:

Understand and practice the basics of marketing with modern era twists.

The technologies, channels, vastness of data, and speed of the marketplace have caused many executives, and CMOs themselves, to lose sight of the fact that marketing is still the set of skills and methods that grow a brand enabling differentiation and performance. Technology and data will not lead to performance without being focused and enlivened by a marketing mindset and skillset. And the same goes in reverse.

Marketing is much more than an organizational unit.

More productive: to recall that the science of marketing includes the know-how for identifying and delivering upon the unmet needs of findable and scalable audiences, with viable economics. Marketing done to the max can orient the business model around the users the brand wants to serve and the buyers the brand must reach. A marketing mindset must pervade the entire organization, and be role modeled by the CEO down. “Marketing” lower case “m” succeeds when it is widespread, not solely in the domain of “Marketing” upper case “M”. It’s a core way of operating, not a communications cost center.

Know the brand purpose and the business strategy.

What is the brand’s purpose, and what are the business goals being set by the CEO and ratified by the board? Can the operating levers to deliver goals be identified and can the CMO be empowered, with both resources and authority, to have at least an even shot at success when it comes to identifying and delivering what users need along with attracting buyers?

Go for the short term and the long term; be scrappy.

Focusing on today at the expense of tomorrow, or vice versa, is not sustainable. Winning businesses set and meet near-term expectations while using the opportunity of day in day out decisions to create their futures. They do so one step at a time and with urgency. In this regard, there is much the corporate world can learn from startups about bare bones testing that allows manageable steps forward without big budgets. Startups don’t have a choice. They don’t have the budgets and they are racing the clock to stay alive. The creativity applied to getting answers for market validation – by being good enough, no better — offers a very different paradigm to what can be the exhaustingly slow pace and risk overweighting prevalent in large bureaucracies.

Be willing to invest.

People, infrastructure, capabilities, skills, methods and political capital are all required for today’s CMO to get out from behind that big eight ball.

Caution to CMOs-to-be: confirm CEO sponsorship and engagement, before signing on.

Change is built into the CMO role. That’s reality. Change has personal and emotional consequences, and is not necessarily embraced even when all of the facts line up to favor a new course. CMOs cause widespread change to deliver near-term impact and build brands. For that they need air cover, starting with the CEO’s consistent and courageous leadership and commitment from the Board.

See also: How to Make Sense of Marketing Tech  

Assess whether the conditions are right to work this list of must-do actions, or set your sights in 2018 on how to shift conditions so you can make your mark as a CMO.

How to Make Sense of Marketing Tech

Thanks to Scott Brinker at chiefmartech.com for sharing the 2017 Marketing Technology Supergraphic above. I appreciate every year seeing the updated technology landscapes along with the insights and commentary provided by Luma Partners. If you are having trouble making out any of the details, it’s not your eyesight. More than 5,000 companies are included on the landscape, astoundingly up from 150 in 2011.

Wow. Does the chief marketing officer really need 5,000 — and growing — choices? Even within the super-graphic’s sub-categories, any executive may find herself searching for just a few needles in the haystack. That short list will only include those needs that matter enough to command resources at the expense of some other priority: Software will be licensed, planned into the tech stack, fed by data to produce decisions and provide leverage for media selection, offer testing, user experience, servicing, personalization, team collaboration or any of the other demands of a modern marketing organization.

The super-graphic conveys at least two messages:

  • Lots of engineers see that marketing is a function continuing to live with daily disruption and want to help, or see an open window at least to build solutions.
  • With so many solutions out there, it’s reasonable to question where the value and meaningful differences are among them. Where has tech product specialization become so deep that solutions are not relevant enough to be worth the CMO’s pursuit?

Direct marketers have long subscribed to the orthodoxy that choice depresses response. While not always the case, certainly when presented with an overwhelming number of choices buyers tend to shut down. Without a framework relevant to the CMO’s needs, having 5,000-plus options on one slide (while a remarkable feat of design, even organized into tech-based categories with add-on, zoom-in capability) will feed decision-making paralysis.

See also: Insurtechs Are Pushing for Transparency  

There is a way to not get swallowed by the mar-tech vortex, one that is remarkably low-tech and depends more on critical thinking, collaboration, customer focus and clear commercial goals. In this context, software is the enabler, the means but not the end.

That way? Be clear on what the business strategy is. How does the business strategy translate into the short list of marketing priorities — those that constitute a 20/110 effort-for-impact calculation? This means the 20% of activity that will make 110% of the difference. (I prefer 20/110 thinking to the more common 80/20 — let’s admit that some of the decisions that marketers make end up dragging down results, and that the headlines that dominate team appraisals of progress tend to focus on a short list versus the totality).

Strategy comes down to:

  • The starting point: Where are you now?
  • The destination: Where do you want to be?
  • The route: How do you anticipate getting there?
  • The rationale: Why does any of this matter?

The focus for any CMO trying to decide where to start and where to put her undoubtedly too-scarce resources is to be confident about:

  • What customer problems the brand wants to solve that will allow standout status in the hearts and minds of our users.
  • And, what marketing capabilities (technology and otherwise) are needed to ensure the brand gets to the solution(s) that widen competitive advantage and grow user preference.

See also: The Failures and Successes of Insurtech  

Mar-tech along with all of the other advanced technologies available today should be chosen because they can help the brand enable remarkable differentiation — in the hearts and minds of customers. With strategy in hand, it is possible to make smart decisions and tradeoffs for the right reasons, about how to prioritize mar-tech investments for business leverage. Then, frameworks such as this complex snapshot of what technology can do for marketing become incredibly useful places to start searching for the appropriate enablers.

How Technology Breaks Down Silos

Overview

New digital technologies and the data they are producing have forced collaboration among senior business leaders across all levels of all organizations. To obtain insights from data to drive decision-making and embed a data-driven approach within a company’s culture, it is critical for the C-suite to lead the way.

It’s easy to talk about collaboration, but much harder to act. Analyzing information, deriving insights and responding with effective strategies requires an understanding of the analytical tools themselves, as well as collaboration. As technologies get smarter and various functional groups collaborate, simply moving to single systems can give broader teams greater visibility to inefficiencies and broken processes.

But how does a business get to such a place? What tools and strategies bring about successful coordination of activities in such dynamic situations? And what are the challenges of working together that C-Suite executives should anticipate?

In Depth

Just about every functional group within an organization can now collect, connect and analyze data. But big data – from keyword searches, social sites, wearables, mobile devices, customer feedback and so on – presents challenges as well as opportunities for business leaders. One of the biggest is how to maximize the potential of this data by transcending organizational silos to unlock its true potential.

Technology is also transforming how businesses develop and deliver goods and services and is placing enormous new demands on those responsible for strategies to navigate the challenges. These are the people who need to apply institutional knowledge, implement changes and allocate resources toward new ways of working on a day-to-day basis.

Paul Mang, Global CEO of Analytics and leader of the Aon Center for Innovation and Analytics in Singapore, says there are two types of data analysis that can be leveraged to accomplish this: business analytics and enterprise analytics. Business analytics focus on the use of established tools and capabilities, while enterprise analytics “create new product or value propositions for existing clients or new client segments altogether.”  Short-term, enterprise analytics can lead to disruptive innovation while quickly contributing to improved long-term performance.

“Business and enterprise analytics should work side-by-side and complement each other” to support decision making, Mang says.

The Changing Role of the CIO

The need to become an effective data-driven organization has dramatically increased the importance of the chief information officer (CIO), a role that John Bruno, chief information officer at Aon, says is that of “an integrator – someone who works across the entire organization to embed data within the business.”  He sees the value that information technology (IT) brings, and notes that “IT is less about bits and bytes of data, but more about bringing them together to extract specific insights.”

The need to centralize and mine big data for market opportunities and to parse out weaknesses is also prompting some firms to create a C-suite level position of chief data officer (CDO). This role would be responsible for working with business managers to identify both internal and external data sets that they may not even realize exist, as well as continually looking for new ways to experiment and apply that data.

Equally critical to communicating changes in customer preferences and behaviors, and for their ability to leverage insights from customer purchase patterns into developing new products and services, is the chief marketing officer (CMO). Like the CMO, the effective CIO needs an intimate understanding of how current technology can increase the company’s sales.

However, Bruno says, “in any large organization, there are multiple leaders in different parts of the organization who address different elements of the same challenges. It’s the CEO who can see the whole view and works to have teams bring forward integrated solutions to distributed problems.” He sees the role of the CEO as one who looks beyond short-term disruptions and organizational adjustments to seize opportunities that ensure long-term growth.

This is why, increasingly, the role of the CIO/CDO is about balancing business needs against an incoming stream of opportunities – and risks. This broad cross-business knowledge can only come from constant and deliberate collaboration with the rest of the C-level executive suite. Above all, the CIO has to be able to effectively show how technology and the subsequent data it brings are assets rather than cost centers. For CIOs to really succeed, this means informing C-level colleagues about technology and the opportunities it can create.

Making Collaboration Count: Finance and HR

The role of the CFO is increasingly about analyzing data to give it meaning and partnering across the organization to make the information actionable. One area that is seeing CFOs use data to drive real results is in collaboration with the chief human resources officer (CHRO).

Eddie Short, Aon Hewitt’s managing director, Global Data & Analytics, says that in most organizations the C-Suite has not been getting sufficient insight into people-related business issues, typically owned by human resources (HR) teams. Today, with the CIO’s help, digital tools are increasingly being used by leading organizations to measure employee performance, reduce attrition and cultivate talent through a better understanding of the data about their workforce that they can gather and analyze.

“People analytics,” as this emerging field is known, attempts to bridge the gap between HR and the rest of the organization by providing specific insights into an organization’s talent. “People analytics is all about connecting the value of your people to the strategic goals and objectives of the business,” Short says. “This approach represents a major opportunity for HR and finance leaders to take a road centered on the greatest asset that organizations have – their people – and start to shape the value-add they will create for the business over the next five to 10 years using predictive analytics.”

With skills shortages an increasingly pressing issue for many organizations around the world, gaining this kind of insight can help a business to identify and meet its future talent needs.

Aligning for Agility

As technology continues to disrupt, CEOs and the C-Suite in general must accept that there may not be a set playbook to follow to adapt and evolve. Flexibility is paramount, and often organizations must invent and reinvent as they move forward. Intelligently applying analytics tools to derive value from big data can help them navigate this new terrain.

“Today, CXOs want predictive insights,” Short says. “They want answers to the predictive ‘what could I do?’ questions as well as prescriptive – ‘what should I do?’ — questions.” Yet most tools and programs currently available are merely descriptive – to derive true insight needs additional interpretations from people who really understand the business.

This is where C-Suite collaboration becomes so vital. Organizations thrive when there are diverse and complementary personnel and systems working together. Sharing insights from the analysis of big data across the C-suite and across functions can position businesses to draw valuable insights from this data, harmonize planning around it, align their actions and understand the full value this brings both to their own divisions and the organization as a whole. And the more that data is shared, the more leading businesses discover that they can find answers to today’s – and tomorrow’s – questions.

With the measurable business benefits this data sharing can bring, the business case for breaking down silos within organizations is stronger than ever. Where this may have once been a C-Suite aspiration, the make-or-break implications of insights drawn from this data has made it a business imperative.

Talking Points

“In every industry, our analysis and our work with clients would suggest technology at a minimum is going to be a tremendous accelerant. So if you have a a business model, the opportunity to scale it more effectively, grow it more effectively gets… amplified.” – Greg Case, CEO, Aon

“The way that big data pervades most organizations today creates a dynamic environment for C-level executives to explore how it can and should be used strategically to add business value.” –  Economist Intelligence Unit

Further Reading

chief digital officer

New C-Suite Member: Chief Digital Officer

More than a quarter of the world’s population owns a smartphone. In 2014, global mobile data traffic reached 2.5 billion gigabytes per month, a figure that is 30 times as large as all the traffic on the Internet for the full year 2000. No wonder global companies are moving rapidly to reshape their businesses to meet this new level of connectivity. One way they are doing so is by appointing a new kind of executive, the chief digital officer (CDO). The CDO’s mandate: to equip companies for the digital future. This executive has the dual task of developing an all-inclusive digital experience for customers and the internal capabilities needed to support that experience — while simultaneously managing the considerable investment required. The emergence of the new role to lead the organization’s digital efforts may in part be a reaction to the chronically weak relationships between CIOs and CMOs, which we’ve observed over the last few years.

The number of companies that have hired CDOs remains small — just 6% globally, according to the results of the inaugural Strategy& study of digital leadership at 1,500 of the world’s largest companies. But the number is growing rapidly. Of the 86 CDOs we found, 31 were appointed in 2015. The sectors where the highest proportion of companies have CDOs are travel and tourism, with 31%; entertainment, media, and communications companies, with 13%; and food and beverage companies, with 11%. At the other end of the spectrum, only 1% of mining and metals companies had a CDO; just 2% of those in the automotive, machinery and engineering sectors did; and only 3% in technology and electronics did. One is also more likely to see CDOs in European companies than in their U.S. or Asian counterparts, and CDOs are more likely to appear in large companies than small ones. We suspect that in many cases where a CDO has not been appointed, it is because the related responsibilities are already distributed among other top management roles and are entrenched in all aspects of the company’s culture.

In the past, traditional CIOs and CTOs were focused primarily on their companies’ IT, managing employee desktops and enterprise-wide ERP and CRM systems. The CDO role, although it varies from one company to another, is far more comprehensive. Besides customer experience, the development of digital features in new products and services and the relevant operational changes, the CDO may oversee changes in technical infrastructure and innovations in data collection and analysis. The CDO must also be an agent of cultural change, championing the digital transformation throughout the company and linking it to the development of the distinctive capabilities that form the basis of a company’s strategy.

Here are glimpses of chief digital officers (or people in similar roles) at four major companies, and the ways in which they meet the challenge of digital transformation:

–Jessica Federer is head of digital development at Bayer. “The data piece is actually the easiest,” she says. “Data is data. It’s the people piece that’s the challenge. So we focus first on the people in the organization, and how we connect across synergies, across silos, over platforms and data.”

Soon after she was appointed, Federer created a digital council consisting of the CIOs and CMOs of the relevant divisions at Bayer. Their task was to look at potential synergies. She also fostered a huge network of people involved in some aspect of digital transformation, to which she gave the acronym NERD (Network for Enterprise Readiness and Digital). “They bring together digital marketing with digital product supply with digital R&D,” Federer says. “We used to do this in silos, but now we do it by sharing information.”

–At Renault, CDO Patrick Hoffstetter is creating a centralized digital transformation organization, which he calls the Digital Factory. This is not a literal factory, but a metaphorical center for people throughout the company who already work on digital projects and another group working at about 65 outside suppliers. The factory is the nexus of communications about the digital strategy, and the place where resources and experts come to design the transition to what Hoffstetter calls “the connected employee.” The changes put into place at the Digital Factory will affect how people work, what they expect from the company and what tools they are given.

Balancing the timetable for this complex shift is a key part of the CDO’s role. “One reason most operations in digital strategy and transformation are focused on sales and marketing is that these functions have a direct, quite short-term impact on the business,” Hoffstetter says. “Whereas when it comes to the evolution of internal processes, internal social networks, acceleration of collaborative tools and internal training, it’s much harder to show any payback, and it takes a lot longer.”

–Corinne Avelines, CDO of the decorative paints division of the Dutch chemical company AkzoNobel, says broad support is critical: “Commitment at the top management level to innovation and digitization has made my job considerably easier,” she says. “Senior support is key to ensuring commitment to digital at the company, especially one of this size.”

At the same time, she says, overall strategy must always drive decisions about how and what to digitize. “Gaining a competitive advantage in a fast-digitizing age is a challenge, so CDOs must understand their company’s current position and future strategy — what will make an impact on providing value to the customer — and focus on that. Worry about the other things later.”

–Visa CDO Chris Curtin says that he has learned to participate actively in the creation of the overall business strategy — and lead the process when necessary. “I not only think that the best CDOs are reflective of the business,” he says, “I think that in many respects they are the business.” To that end, he believes that CDOs should “forget about digital. Forget about new media. The business objective has to permeate the thinking and the strategies and the go-to-market approach of the CDO and his and her team. Never make the means the end. A million followers on Twitter is just a means. The end is the business goal.”

The CDOs interviewed for this study all emphasized the importance of working closely with every function of the business. Being part of top management gives them a critical strategic perspective, but they must also be given the power and support they need from functional groups. Otherwise, they may find themselves with a seat at the table but without the strategic and operational input that the digital transformation needs.

Ultimately, the goal of every CDO is to ingrain the digital agenda so deeply and efficiently that it will become a way of life for everyone and every function in the organization, and a priority for every member of its C-suite. Sooner or later, companies may get to a point where a transformation isn’t necessary, because it has already happened. Digital technology will be so well-integrated that it won’t be a separate issue anymore. It will simply be part of the way people work, and the CDO will move to some new type of challenge.

This article was written by:

  • Roman Friedrich, a leading practitioner with Strategy&, PwC’s strategy consulting business, and a partner with PwC Germany. He is based in Düsseldorf and Stockholm.
  • Pierre Péladeau, a thought leader on digital strategy with Strategy& and a  partner with PwC France, based in Paris.
  • Kai Mueller, a specialist with Strategy& and a senior research and knowledge manager with PwC Germany, based in Berlin.