John Hayes, CMO at American Express, likes to remind people that the culture of reinvention is the company’s cornerstone. (“Remember, the…brand already was 108 years old when we launched the first American Express card.”) And, when people ask FedEx’s Mike Glenn what it’s been like to work for the same company for two-and-a-half decades, he replies, “I’ve never worked at the same company for more than two years in a row, because FedEx keeps changing. We have new marketing challenges every day.”
Smart, successful marketers exude confidence in the face of change. Whether the subject is competition, technologies, or acquisitions, they all recognize the need to take on change, and also the need to absorb change and keep it moving in a way that matches the expectations of their peers and management colleagues. “In late 2005,” Cie Nicholson recalls, “Steve Jobs announced that you could now download music videos and TV shows to your iPod for $1.99. Two weeks later, one of the networks announced that you could buy its shows for 99 cents, but with commercials included. And then pretty soon you could download programs for free and without the commercials. Within 100 days, the media world had been turned on its head, and it’s hard to know where things will stop.” In this ever-changing marketing environment, she says, adaptability is an important skill.
And therein lies the challenge: Adaptability has to be inherent in every part of the marketing agenda. It’s not just the way you (as a marketing leader) adjust to new media. It’s the way you hire people, train them, and get your senior managers to sit down with a media-savvy mom. Most of all, it’s the way you drive marketing as an integral — and integrated — part of the enterprise, whose role goes beyond measuring the return of specific marketing programs to nurturing the overall health of the business and brands.
Learning from Champions
The transformation of the function and purpose of marketing means that CMOs must stand ready to meet the challenges and capture the benefits of far-reaching changes in consumer behavior and the media. And they need to demand that their agency relationships support them in this effort. Equally important is the recognition that marketing needs to be more tightly integrated with other corporate functions — from manufacturing and distribution to sales and finance.
Several years ago, Procter & Gamble’s disposable diaper division was organized around the science of fluid absorption. “We had an entire R&D organization focused on fluid absorption, its speed, [its effect on] skin health, and so on,” explains Jim Stengel. The most important question on the table for P&G’s diaper scientists was, How can we make diapers stay drier longer? Yet under the tutelage of marketing leaders like Stengel, the company realized that the primary value it offered to parents wasn’t technological — it wasn’t limited to dryness or containment. Consumers were looking to Procter & Gamble for improvements in the overall development and health of babies. “That creates all sorts of new needs,” he says. “Babies wear a diaper 24/7 for almost three years…. But when you ask, ‘How do we know we’re better for a baby’s development than our competitors?’ — that means your competitive set changes, your market share changes, what you’re looking for in your equity changes.” The R&D lab and marketing team had been close before; now they became inseparable as they tackled innovative approaches to diaper fit and feel. And with a question on the table about baby development, the brand began a new round of market growth.
That was a clear instance of a CMO driving change and, with it, driving growth. The stakes are high because of the complexity of opportunity and change confronting marketers today. Marketing will continue to assume increased importance within any company that aspires to robust growth.