Tag Archives: radin

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.

Future of Insurance: Risk Pools of One

In a recent New York Times story, New Gene Test Poses Threat to Insurers, reporter Gina Kolata describes how data transparency and availability are disrupting underwriting for long-term-care insurance. Kolata discusses how this product, challenged for years by inaccurate claims forecasting and sky-high pricing, faces further threat of adverse selection — as a consequence of innovation.

The article highlights challenges that have potential to affect other insurance lines, as well. Carriers should take note.

Companies like 23andme create data asymmetry between a policy buyer and the carrier, with the advantage flipped from the historical norm, where the carrier had the upper hand. With a $199 investment, all of us can now make more informed decisions about which risk pools we may fall into based on the odds, at some point in our lives, of being afflicted by one of 10 diseases covered so far (the company has regulatory support to expand its offering).

The availability of predictive insights into future medical conditions at an affordable retail price signals that we are entering a world where we will be able to prioritize, with more knowledge than ever before available, where to put our insurance premium dollars. We will have more data to assess which risk pools are worth joining.

See also: 3 Key Steps for Predictive Analytics  

This is one more development overturning the business model for life, health and other products. $199 is a good deal when deciding whether to purchase a policy that might cost thousands of dollars in annual premium. The two million people who have already purchased a test kit would likely agree.

Usage-based insurance (UBI) products, such as those offered by Metromile, Progressive and Allstate surface knowledge about an individual that helps the carrier with more precise underwriting, allowing the tailoring of a policy to an individual’s driving behavior. UBI also disrupts traditional risk pool principles. And, it is hard to imagine that UBI won’t hurt those with less favorable profiles. The full consequences to society may not be examined or understood until out into the future, but they are brewing.

The 23andme model exploits personalized data, but from the opposite direction. It puts personalized data in the hands of the individual, off limits from the carrier. The power shifts to the individual, and, because he is under no obligation to share what he knows, now the carrier faces a greater disadvantage.

Carriers can withdraw from markets, skim the beset customers or advocate for the creation of high-risk pools. Let’s hope the insurance sector will also look itself in the mirror and recommit to its purpose as it relates to making it possible for a community to pool resources to protect individuals in an hour of need. The question is: Will insurers find a path to sustain their purpose under rewritten assumptions?

The floodgates demanding reinvention are open. Any insurance player who thinks “this too will pass” or regulations will provide protection may be able to buy time for a while. But chances are his business is already being affected by what data is available to whom and when, by what will be growing data asymmetry working against the traditional insurance model and necessitate a redefinition of how to create and manage risk pools.

Back in the 1990s, businesses began to recognize that the World Wide Web would change the way companies across all sectors engaged with everyone — customers, employees, vendors and all of their other constituents. The notion of individuals, not companies, having greater control over what products and services they chose to buy and use was new. For those of us who were at least young adults at the time, the impact of anyone with connectivity gaining access to information via an act as simple as typing a query into the Google search bar took a while to digest.

The insurance sector is a self-confessed laggard when it comes to internalizing and getting out in front of the implications of the Internet. The underlying business model has been relatively stable for a long time. There is evidence of risk pools going back 5,000 years, when shippers devised pools to protect against loss of cargo and crew at sea. The sheer complexity of managing an insurance business made it of lower interest to startups, at least until the last couple of years.

See also: Let’s Get Rid of Risk Altogether!  

Certainly while insurance companies have introduced countless products, brands have come and gone, and distribution, sales, regulation, automation and every other aspect of the business has evolved, the basics have not changed – the creation and management of a risk pool that is sufficiently durable to pay claims over time, and engagement of a broad community of individuals to feel that their interests are served by participating.

Typically, over the summer, companies on a fiscal calendar year engage in strategic planning processes where leaders take a look out into the future and project the implications of big trends on their long-term financial outlook. It’s a good time to take out a white piece of paper and consider:

  • Recommitting to their purpose as players in the insurance ecosystem
  • Acknowledging what is different, and how to see threat as opportunity
  • Prototyping alternative business models, including product, client interaction, distribution, servicing, underwriting and claims management – in other words, the major operating levers of the business
  • Engaging in serious experimentation to chart paths that are feasible given the changes that are no longer theoretical – they are here.

Why Your Innovation Lab Is D.O.A.

According to a recent Innovation Management post, Are Corporate Innovation Centers Too Big To Fail?, the number of such centers or labs across the globe jumped from 301 to 456 over the course of the 15 months ended in October 2016. This 60%-plus increase reflects legacy enterprise efforts to deal with inescapable disruption.

Boards and the C-suite see labs adding value by:

  • Driving understanding and alignment of their businesses to changing customer and market needs,
  • Attracting people with expertise who are entirely different from the talent running day-to-day operations. These are the kinds of people who can spot trends far in advance and connect the execution dots to commercial opportunity, and
  • Accelerating innovation of all types – business model, product, brand, experience and process, among others – attacking the revenue anemia and margin compression that afflicts pre-digital companies.

See also: What Is the Right Innovation Process?  

One segment of innovation labs is just theater. There is another segment spawning high-potential revenue streams that would not have come about otherwise. But too many are established with good intentions and high expectations, yet run into a common set of seven failure points:

  • Innovation is treated like a project or activity. It is deemed essential yet isn’t integral to the strategic plan projections. Worse, innovation is booked as an expense line for a year or two, with a vague future dependent on how everything else is going. I empathize with the CEO’s decision to assume no upside on revenue as a way of managing the high risk of failure associated in particular with disruptive innovation. However, this decision creates unintended consequences, starting with undermining accountability for results. The lab may be destined to deliver a self-fulfilling prophecy – either not getting results or not being able to measure the results that pilots generate.
  • Innovation is placed in a protective but isolating bubble. It is smart to protect new ideas from the natural instincts of a mature organization. The problem becomes that being placed inside a bubble – e.g., physical location or reporting relationship — makes the lab feel even more foreign to everyone else. The result is a reduced chance of ever being integrated to accelerate scale, leverage the organization’s reusable infrastructure, access the client base or tap into existing brand equity.
  • Top-of-house leadership lacks skills or courage. At the end of the day, if the CEO or business unit head do not have skin in the game, or do not actively hold all directs accountable for the lab’s success, innovation efforts cannot take off. Perhaps the CEO has checked the box for the board by creating an innovation lab, and then allows a budget cycle or two to pass, assuming this is enough time to produce results. Or this is such a new game that, through nobody’s fault, there is a lack of expertise on how to drive a successful lab effort. New roles are created, and hiring mistakes are made.
  • The lab is expected to find the silver bullet answer to a poorly defined problem. “It’s a technology problem.” Or, “We need partners.” Or, “We need to move everyone to Silicon Valley.” And so on. Survey results reviewed in Digital Dynasties: The Rise of Innovation Empires Worldwide reveal that “partnering with ecosystem” is the core operating objective. Toward what end? What marketplace problems is the lab trying to solve? There is often not an answer grounded in an understanding of the unmet needs of large enough segments toward which the lab can point its energy.
  • Enabling capabilities and governance get insufficient attention. Gaps in infrastructure, data access, process, policies, metrics, goals and communications require as much or perhaps more attention than coming up with the innovation concepts themselves. Executing innovation to achieve commercial impact demands that those involved get dirt under their nails at every level of the organization. Ideas get lots of focus. Reality is that the hard work is in the unglamorous details of navigating bureaucracy, reforming status quo procedure to allow for speed and agility and motivating the organization as a whole to support change.
  • Talent criteria to succeed are demanding, making people hard to find. Succeeding as a team member of an innovation lab takes a complex set of personal, leadership and functional abilities and skill. Identifying the right profile is tough, and then finding the people who match the spec is even tougher. There are conflicts between the politics of consensus that may be part of continued funding and the lab’s inherent challenge to the status quo.
  • The culture built on past greatness can stop an innovation lab in its tracks. The right construct for an innovation lab must achieve a tough balancing act: fitting alongside the corporate culture, challenging it, and leveraging it, all at the same time.

See also: How to Create a Culture of Innovation  

The most persistent failure point I have seen is to not recognize and connect the dots between the desire to innovate and the mechanics of execution and followthrough. That is why one of the biggest wins can be to break innovation execution down into small manageable steps that produce signals along the way, including progress markers such as hitting important milestones, getting a pilot to market and seeing impact, enabling capabilities to deliver or mobilizing resources against a defined set of market needs.

10 Reasons Why Founders Fail

A seed stage investor with a 20-year track record of success recently told me, “There are 100 things a founder must get right for his company to succeed, and if he only gets 99 of them right he is likely to fail.”

I have heard the pitches of several hundred founders seeking seed funding over the last couple of years, observed more closely the progress of several dozen, and have the privilege of working relationships with several remarkable ones.

While the number of “must do” items may be up for debate, it’s tough to get a new company off the ground and put it on a path to sustainable growth. The statistics speak for themselves. Many startups fail.

By the way, the “must do’s” are relevant for business builders inside existing enterprises, even including the Fortune behemoths.

Here is a short list curated based on direct observation. Your take on which ones to scratch, revise or expand is valuable. So, please share ideas and feedback.

1. They do not solve a real problem.

The founder, inspired by a problem he has encountered in his own life, superimposes his use case on the rest of the world. He fails to understand whether the problem exists at sufficient scale among a group of users, with the same intensity and under conditions similar enough to his own to become a business.

2. They lack empathy for users.

The founder does not understand what is going on in users’ lives, so he loses out on the context that shapes choices and decisions. He does not connect his own business choices – technology, product and design, for starters, with the emotional needs and desires that weigh heavily on user beliefs and decisions. He assumes people make rational choices. He (and his investors) take misplaced comfort in “hard data” and spreadsheets, and discount the new ROE – Return on Empathy. He loses sight of the fact that all selling is “P2P” – people to people – whether the audience is an individual who is buying on her own behalf, or she is buying on behalf of a business. He does not tune in to the mash-up of demographic, behavioral, and attitudinal dimensions that end up affecting financial results.

3. Their product has no meaningful point of difference.

Different for the sake of difference does not matter. Having extra features, however special they seem, can drive up costs with no offsetting benefits. Recently I met a founder, who for two years, along with his product partner has been hard at work turning their concept into a product. He walked me through a presentation. I asked him at the end what the point of difference was, as it was not clear to me. His response could have been headlined in the sales pitches of any of his competitors. Rule of thumb: if users do not see the product as at least 10X better than alternatives, they won’t engage.

See also: Dear Founders: Are You Listening?  

4. They are not actively listening to the market.

Founders almost always, at some level, will ask for and respond to feedback. This behavior reflects a basic kind of listening that is necessary — but insufficient. Active listeners connect with the world around them. They explore, observe and uncover new insights to discover opportunities and improvements for the business. They are able to translate newly discovered insights into implications and then action steps, and make those action steps happen. They are able to set aside orthodoxies about the sector in which they believe they are operating, and not get trapped in unhelpful assumptions.

5. They affiliate with the wrong people.

Resource scarcity is a fact of life at the seed stage. Founders must make the right hires, bring on the right advisors, engage with the right mentors, and build and sustain a network where they are seen as givers and not just takers. Success is a function of emotional intelligence. Can the founder create a culture which supports the passion to fulfill the startup’s purpose is supported? Great talent is scarce. And, however difficult it is to hire the best, it is even harder to fire when things don’t work out. Hiring for “fit” is not about liking a candidate. It is about understanding role accountabilities, skills and leadership profile, the goals to deliver, problems to solve, skills required, and whether the candidate will strengthen the culture and contribute to the team’s success.

6. They do not articulate and operationalize the business model.

The founder has identified a real problem, but does not understand how to get from concept to implementation that can lead to sustainable and viable economics at scale. Where are the market gaps? Which scale segments are not well served? What are the economic underpinnings of the solution? Are there, at a minimum, well-founded hypotheses that make sense? Can the founder translate the concept into front to back implementation whose mechanisms are able to deliver on the economics and other assumptions that were sold to investors? And can he pivot away from even the most dearly held beliefs that stimulated the product to form?

7. They are product focused, not user focused.

The drive for “product-market fit” applied too zealously and literally can derail a founder. Of course the product has to do what it is supposed to do, do so with quality, and meet the users’ expectations behind the decision to buy, use and recommend. As in any case of “too much of a good thing,” the founder who focuses on the product with blinders on, and does not account for user perceptions, priorities and new or changing needs can end up with an amazing technical achievement that is disconnected from people’s needs. Product focus combined with low empathy is a toxic mix.

8. They cannot sell.

A VC friend describing how he qualifies founders pitching for funding recently said, “If the founder cannot sell, run in another direction.” Particularly in the early stages, the founder is the chief revenue officer. Or, if he is the product head, he had better pair himself with a talented sales executive, one who shares the passion for the business’ purpose.

See also: Don’t Forget Your Best Strategic Weapon  

9. They don’t think they have competition.

The founder whose definition of competition is the entities whose products have similar features is missing the point: competition includes any other option the user may choose instead of yours. This includes doing nothing, or sticking with whatever it is they are doing now, however inferior. Inertia can be the biggest competitor. Behavioral economic theory indicates that people weigh the risk of downside twice as heavily as the potential for upside. And of course, with new entrants enabled by ubiquitous access to technology, manufacturing and raw materials, the founder who is not actively listening or is heads-down into his product will miss the warning signals of another upstart ready to overtake him.

10. They cannot sustain the stamina demanded for momentum.

While the lingo of the startup world focuses on implementing through “sprints,” getting to a sustainable, viable and growing business with as few stumbles as possible comes from a tight linkage of many sprints into a marathon. If the founder doesn’t have it in him to run back and forth over hot coals for years, with a firewalker’s mental and physical fortitude, it is unlikely he will be able to go that distance.