What are the barriers to CMO’s leading the Corporate Growth Agenda?

Today’s guest post is by Randall Beard, a leading and award winning Chief Marketing Officer and General Management executive with 25+ years global experience across consumer packaged goods, financial services and high-touch service brands, including Nielsen, Procter & Gamble, American Express, and UBS. He is currently Global EVP & General Manager at Nielsen IAG, responsible for Consumer Packaged Goods. To read more about his thinking, visit Randall Beard’s Blog.

The CMO’s job is simple—to drive growth, right? As Lou Gerstner ex-IBM and American Express CEO once put it: the role of Marketing is to build the brand and deliver a great customer experience. But is it really that simple?

At the recent CMO Club Summit in San Francisco, I was part of a panel discussion with Joe Ennen, SVP Consumer Brands at Safeway and Scott Thurm, Management Bureau Chief of The Wall Street Journal, titled "CMO's as Leaders of the Corporate Growth Agenda."

Scott led off the discussion by reframing the topic, asking, “What are the barriers to CMO’s leading the corporate growth agenda?” Joe, Scott and I spent the session discussing and debating this important question. 

Barriers to CMO’s Leading the Corporate Growth Agenda

CEO/CMO Alignment - I told the group that "the best CMO is a CEO who believes in Marketing." The CMO's ability to lead the corporate growth agenda starts with alignment with and support from the CEO. Not all business models and CMO’s are created equal. The role of Marketing in an organization can vary widely. And the CMO role can range from a narrow Marcom role all the way to something like a Chief Growth Officer. The CEO and CMO must be aligned on the role of Marketing in the organization for the CMO to effectively lead the growth agenda.

Growth Means More Than Marketing - The CMO has to think more broadly than Marketing. What are all of the potential growth drivers - Marketing or otherwise ? Companies such as Zappos.com have actually gone so far as to define a non-Marketing function like customer service as Marketing. A critical part of the CMO's job is to understand the business model and all potential drivers-whether inside Marketing or not. This is becoming even more important as digital and social media blur the lines between Marketing, Public Affairs and Customer Service.

• At UBS, we learned from Corporate Reputation research that being “open and transparent” was a key driver of reputation, and that reputation scores correlated  with “willingness to refer others” and other business growth metrics. This led the Marketing function to explore programs to communicate to stakeholders in more open and transparent ways.
• At American Express, we learned that offering free “Special Merchant Offers” to consumers using their Gift Card drove significantly higher purchase intent. This led Marketing to spearhead the development of partnerships with key consumer preferred merchants—and to market these offers as a key benefit.

Voice of the Customer – In Joe’s view, another key barrier to the CMO driving the corporate growth agenda is customer neglect. The CMO needs to continually advocate for keeping the customer front and center. All CMO’s could learn from A.G. Lafley, ex CEO of Procter & Gamble, who continually reminded employees that “the consumer is boss.” 

Customer satisfaction surveys not only measure satisfaction. They also measure the important factors contributing to satisfaction and quantify the relationship between those factors and satisfaction. Understanding these drivers enables Marketing to define areas outside Marketing that are central to driving growth. 

• For example, at UBS we learned that client contact frequency was an important satisfaction driver—more was better up to a threshold where satisfaction leveled off. Yet, the majority of client advisers were contacting clients well below the threshold. This led to a concentrated effort to improve contact frequency—and drive growth.

Connecting Customer Needs with Enterprise Assets – I stressed the important role the CMO plays in getting the organization to think about the entirety of the enterprise’s assets and capabilities. Connecting customer needs with assets from outside a business unit is a great way to drive growth—and one that organizational structure often stymies.

• Crest: Consumers had an unmet need for whiter teeth, and paste formulations simply didn’t do the job. A smart R&D person connected this need with synthetic bleach technology from laundry and substrate technology from paper making to create—voila--Crest WhiteStrips.
• Gift Card consumers wanted to buy the cards in retail. The American Express Gift Card group had no relationships with grocery and drug store chains. So, the organization leveraged the Amex Establish Services organizations retailer relationships to facilitate introductions and help gain distribution in over 70k locations in less than two years.

Keys to CMO Success

CMO’s clearly have a tough job, with an average lifespan of just 28 months. Lou Gerstner’s formula for CMO success is a good starting point, but CMO’s need to go further. Building the  brand and delivering a great customer experience plus driving the corporate growth agenda can help CMO’s and their firms be more successful in the future.

Five Lessons for the Leader of Tomorrow: Thoughts from “Good for Business”

I recently read one of the most thought-provoking business books of 2009, Good for Business: The Rise of the Conscious Corporation, and believe there is much to be learned from its insight.

The world is rapidly changing and those companies that recognize how and why will have a better chance to excel in the future. Consumers, prospective employees, investors, and governing bodies all have higher expectations of companies than they did in the past.

Good for Business lays out 4 cornerstones for successful businesses of the future- (1) respect for consumers' power,(2) a people-centered culture, (3) having a purpose beyond profit  and (4) a sustainable approach to business. 

Let’s briefly consider each of these cornerstones, beginning with respect for consumer’s power.  If you’re reading this, chances are you are well aware of the increased power of consumers as a result of the information age.  Consumer’s use the internet to form opinions, research purchases, and share experiences regarding brands and companies.  Its amazing the great divide between companies that understand and appreciate consumers’ increased power, and those that don’t.  

A perfect example of one who didn’t understand the new world is the youtube video “United Breaks Guitars”.  A United passenger witnessed baggage handlers mishandling his guitar, but despite trying for a year, he was unable to get the company to cover his damages.  The following video has been viewed by 6 million people on Youtube at the time of this writing and it's producers are already well into their third song about the incident.

Moving on to (2), most companies would claim to have a people-centered culture, but for many this is just lip service.  Hierarchical, command and control companies that try to make every decision in the corner office are going the way of the dinosaur.  These top down companies often have trouble developing future generations of leaders as when every decision is made at the top, people never learn to lead.  In addition, the authors of Good for Business rightly point out that there is a generational shift taking place, with millenials bringing a different set of expectations to the workplace.  Millenials have grown up in the digital age, have less patience for hierarchical organizations, and will not hesitate to move on to new opportunities if they are not getting their needs met.

Companies that (3) “have a purpose beyond profit” tend to have fiercely loyal consumers, motivated employees, and positive reputations.  The authors provide numerous examples of companies that live this value including Google, Whole Foods, and Green Mountain coffee.

Finally, the authors provide some interesting thoughts on (4) “a sustainable approach to business”.  Clearly, managing the impact a company has on the environment is the right thing to do for the planet and for future generations.  Interestingly, its also what your consumers and employees expect.  A Euro RSCG 2008 study showed that 79 percent of people purchase environmentally friendly products and a 2007 Net Impact study showed 81 percent of MBA students thought businesses should work to improve society.

Good for Business is loaded with data, real world examples, and case studies which persuasively support the authors’ thesis. Written in a conversational, enjoyable to read style, I highly recommend it.

Five Key Takeaways for Leaders

Here are some final takeaways for leaders:

1. Leaders must be aware of societal shifts which will change the business environment, and proactively plan to address them.
2. Embrace the fact that consumers’ power has increased dramatically and work harder than ever to exceed their expectations and build an authentic relationship with them.
3. You must equip and empower employees to evangelize the corporate brand; the old approach of managing all communication from the ivory tower doesn’t work any longer.
4. More than ever, creating an environment employees can believe in and rally around, leads to an engaged work force.  It can’t just be lip service- people will see right through it.
5. Corporations cannot ignore their impact on the environment- employees and consumers will no longer let them.

Learning From A Most Unlikely Leader

At first glance, E. Gordon Gee doesn’t look like a leader. He is skinny, wears glasses, sports a bow tie, and has a high-pitched voice that takes some getting used to. But Dr. Gee is one of the most impressive leaders of our era. He was the President of Ohio State University from 1990-97, before leaving to become President of Brown and later Vanderbilt. In 2007, the Trustees of Ohio State were finally successful in convincing Dr. Gee to return to Ohio State.

Recently, I watched Gee deliver a short speech to several thousand people at a charity event in which he shared the podium with several dignitaries including the Governor of Ohio, the Mayor of Columbus, and Lance Armstrong. Gee’s remarks were by far the best received, because he used humor (in the form of a Letterman-style Top 10 list) to develop rapport with his audience.

There is much we can learn from Gordon Gee, but I want to focus on the importance of setting clear expectations and operating principles for your team. In October 2007, as he assembled his new Executive Leadership Team at OSU, Gee wrote a memo to his team entitled “Rules of Engagement”.

I will paraphrase some of the highlights of this memo, as it offers sage advice for leaders:

1. The acid test of a leader is the ability to attract and keep Extraordinary people.

Gee defines Extraordinary as people who are:

• Smart (ie. They listen well, use good judgement and communicate clearly.)
• Get things done (and with a sense of urgency)
• Nice (Life is too short to work with egotistical, abrasive people!)
• Straightforward

2. In order to attract extraordinary people, leaders must:

• Be smart, results-oriented, nice, and straightforward
• Have the courage to deal with nonperformers
• Be the kind of leader that people want to work for
• Be genuine
• Balance the “obsessive will to win” with humor, caring, and humility

3. To be successful in leading an organization, leaders must form a team by:

• Inspiring trust (it is the oxygen of teams)
• Valuing conflict (trust each other enough to disagree)
• Collaborating (internal competition is toxic and undermines trust)
• Making good decisions in a timely fashion
• Holding each other accountable
• Breaking down silos so middle management is inspired to work together
• Measuring progress

Four Important Lessons to Live By:

So, what should we as leaders take away from Gee’s Rules of Engagement? Here are four important lessons to remember:

1. Set clear operating principles for your team, lay them out in writing, and discuss them together.
2. Hold yourself and your team accountable for building a high performance organization, including recruiting, growing, and developing extraordinary people.
3. Remember, you get what you incent. Measure your progress, and make sure you are measuring those things which are most important to success.
4. Some characteristics of extraordinary people include passion, energy, intelligence, a sense of urgency, and a commitment to excellence.

Thanks for stopping by, and as always, I welcome your feedback.

Refocusing On Marketing & Leadership Principles

Marketing and Leadership are topics that I have tremendous passion for.  I have been extremely fortunate in my career to work for some fabulous leaders and teachers, for some great companies, and on some iconic brands. Here are a few examples of businesses I’ve had the good fortune to help shape:

The inspiration behind this blog is to give back—to share what I have learned over the years, to throw out observations and ideas, and to challenge convention. It is my hope that this will lead to debate, and to growth. Philosophically, I believe each day we are either getting better—growing and learning—or we are getting worse, falling behind—its simply not possible to stay the same.

The business world is at an incredibly interesting time. First the economic reality we have all had to face:

• Entire industries like banking and auto manufacturing have been turned upside down
• Unemployment is at a peak
• The stock market has become extremely volatile with several hundred point swings becoming commonplace and retirement nest eggs have been diminished
• Discretionary income has declined as taxes and health care costs continue to rise and wage freezes/pay cuts become common- meaning consumers have less dollars to spend at retail

In addition, the consumers who drive companies’ economic engines have also evolved:

• Consumer segments are becoming much more diverse in terms of ethnicity, age, interests, attitudes, and behavior.
• How we interact has changed dramatically—social media and texting have replaced many face to face conversations
• Technology has enabled extraordinary availability of information (both accurate and not so accurate), which has changed the way consumers make decisions.

While these unprecedented times call for some changes in how companies behave, the core leadership and marketing principles of successful companies should not change. Here are some of the most important marketing principles (we’ll save leadership principles for a later post):

• Understanding your consumer and what motivates them
• Building brand equity by creating an authentic relationship with your consumers
• Always act ethically, and transparently with your consumers (and all your stakeholders)
• Providing true value
• Continue to innovate to meet consumers wants and needs
• Resist the urge to cut marketing spending dramatically; instead focus on maximizing return on your marketing investment

In the coming weeks, I’ll delve deeper into these principles, as well as sharing thoughts on effective leadership. Thanks very much for stopping by, and please let me know what you think.