In times of hyper growth in the tech industry, marketers were well known for creativity, great ads and building leading brands. But today as core markets mature, CEOs are demanding one thing and one thing only...
...from Chief Marketing Officers (CMOs): help me drive business growth. However, while the mandate seems clear, few organizations, CEOs and CMOs have successfully implemented this new model. Most marketing organizations have undergone substantial re-organizations in the past few years and CMOs still have the shortest tenure of all C-level executives.
I have recently read with great interest the study conducted by the Association of National Advertisers (ANA) and Booz Allen Hamilton about the structure and practices of marketing organizations. You will also find a summary of the various models on Brand Autopsy.
They have identified a category .... "Growth Champions" .... that correlates with better business performance: organizations in this category are 20% more likely to exhibit superior revenue growth and profitability in their industry than marketing departments in the other five categories. However Growth Champions represent only 9% of the marketing organizations surveyed, which points to the challenges of becoming a leading Marketing organization.
Here are the five key characteristics growth champions share:
Characteristic #1: Growth champions can identify their contribution to business growth and they gain added authority by their ability to define Return on Marketing Investment. (See my post on ROI). Marketing ROI is one of the greatest priorities but also one of the greatest challenges of marketing organizations. Few are able to link marketing investments to sales results and gross margin both at an individual campaign level as well as at an overall portfolio level. The first complexity CMOs face is to effectively track the "I" in ROI: marketing is the most fragmented spend in companies with each business group, category, regional and country organization owning part of the spend. Tracking the spend along dimensions that make sense for marketing ROI requires that CMOs lead the implementation of Marketing Resource Management (MRM) systems .... a significant change management effort which spans over 2-3 years.
ROI implementation requires in addition the development of closer linkages with sales with clearer hand offs and metrics at a campaign level as well the design of sophisticated statistical modeling to correlate multiple marketing activities to sales results. Growth champions have recognized the need for Marketing Performance Management (MPM) transformations and have initiated long term programs. We have at HP one of the largest MPM transformation initiative with significant MRM and CRM Siebel deployments connected to our Enterprise Data Warehouse and have started piloting sophisticated marketing mix models.
Characteristic #2: Growth champions have a broader range of capabilities beyond the conventional definition of marketing practices. Growth champions assume strategic responsibilities in addition to more traditional core marketing responsibilities. They play a key role in new business development, product innovation but also in approving large investments or new marketing entries. They have a broader set of skills that traditional marketers in areas such as analytical and leadership capabilities that allow them to work cross functionally and ultimately take leading operating roles. I recently wrote a post that highlights the ever expanding set of skills that a CMO needs to have vs. the more traditional brand oriented marketer.
Characteristic #3: They use standardized tools and processes for efficiency. Marketing is the last frontier of process discipline. Marketers have long resisted driving process rigor and see it as an inhibitor of marketing art and creativity. Others functions such as manufacturing, supply chain or even sales have undergone more automation and have been forced earlier on to apply this discipline. Growth champions recognize this need to drive the industrialization of marketing processes to fully take advantage of automation opportunities. They also understand this imperative as they drive more "IT-based Marketing" leveraging customer analytics. They apply proven techniques such as Six Sigma to fragmented manual marketing processes (see my post on process .... a bad word in Marketing)
Characteristic #4: They are proactive, not reactive in providing both guidance and services that they believe add value to the senior leadership team. They have a deep business and strategic understanding and apply their knowledge of the customer and of the marketing levers to help drive business growth. One great example is their ability to become the voice of the customer, lead customer experience design and link all siloed activities to deliver on business commitments.
Characteristic #5: They are perceived by other C-suite officers as contributors to and leaders of the growth agenda. Michael has a great comment on the ANA blog that marketers often lack the "street cred" to gain the respect of the CEO and CFO to be put them in the driver's seat. When asked "can you tell your CFO what effect a 10% budget cut will have on your revenue and profits?" over 64% of marketers said no. How then can marketers expect to gain any credibility when the rest of the organization will resoundingly answer this question with a very loud "YES".
So what will it take to move beyond 9% of all marketing organizations? It will require CMOs to aggressively develop a culture of accountability and discipline. It will also require marketing organizations to more clearly define and align their activities to delivering on business growth and quantify their contributions.
As Joseph Jaffe says: "One continuum is ideation to execution; another is innovation; a third is the coverage - and influence - throughout the organization (the opposite of a silo approach); a final one is the ability to try out new approaches (versus status quo/best practices)".
Eric Kintz is VP Global Marketing Strategy & Excellence for Hewlett-Packard. Read his blog here.
Take the first step (it's free).
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