A Theory of Evolution
The factors that determine business success in 2017 are markedly different from those of the past. Today, brands that we think of as ‘iconic’ or ‘timeless’ have achieved this distinction by embracing innovation and technology with an eye on the future of consumer services. These select brands have constantly kept their proverbial finger on the pulse of their customers’ needs. In their quest to stay relevant and on top of customers’ minds, they have mercilessly stripped down legacy structures and strategies. Their reward: year on year of healthy growth.
For a global FMCG giant, a tepid economy and increasingly health-conscious consumers had led to a decade of steadily dropping soda sales. In response, the company made a move that stunned traditional marketers. It created the company’s first chief growth officer by enhancing the role that the chief marketing officer (CMO) played by merging the customer and commercial teams.
The move, however, did not surprise everyone. In fact, it wasn’t even unprecedented. It was a move that perfectly represents the paradigm shift in the way that brands measure success.
Dissecting Disruptive Growth
Back during the first wave of digitalization, companies realized that the influx of customer data available could be used to make better business decisions and, hence, data technology emerged as a key growth enabler for organizations. Corporations redefined the role of the chief information officer and made room for the chief data science officer (CDSO) at boardroom roundtables. That was nearly half a decade ago.
Subsequent waves of digital disruption have further broken down traditional business boundaries. They have driven the markets to completely organize themselves around the customer. With the rise of new media, the sharing economy, connected devices, and ecommerce, the traditional value chain has had little choice but to adapt, embedded with unconventional sales, service, and distribution touch points. Traditional customer segments are being metabolized into the individual level and each individual, naturally, has very specific, nearly nonnegotiable demands.
So, while the globally expanding consumer base may represent a Holy Grail of growth, is the current profile of a CMO, as we define it today, adequate to seize the opportunities and rise up to the challenges? A CMO’s role is typically restricted to marketing activities that cover advertising, branding, and market research with the ultimate goal of lead generation. But can this limited portfolio cater to a generation that’s notoriously hard to pin down – millennials?
The hyper-digital consumer is just one side of the coin. Within the organization itself, marketing is viewed more as a tool for reaching customers than as a growth driver. As such, marketing departments often lack support from other executives and departments within the company when it comes to spearheading an initiative. Final approvals are usually required from leaders higher up the pecking order. Accountability without true decision-making power considerably dilutes the CMO’s ability to make meaningful change. CEOs have been increasingly pressurizing their CMOs to drive growth – one in three holding them accountable if the enterprise fails to meet targets. This expectation, while par for the course for a CxO, erroneously assumes that CMOs control the key levers that drive organizational progress.
Embracing Change, Enabling Collaboration, Embedding Technology
It’s impossible to make an omelet without breaking a few eggs. Organizations hungry for sustainable growth and high return on marketing investment may need to first deconstruct and redefine traditional leadership roles. The business challenges of the 21st century demand a new, holistic approach to the powers and responsibilities of an organization’s marketing head. This leader will need to bring keen customer insights, commercial sensitivity, and strategic leadership to the table. Today’s customers are at the center of business strategy. It’s become clear that they no longer respond to aggressive selling and promotional strategies the way they used to. This means that a marketer’s job has become infinitely more complex and more critical. Marketing, therefore, needs to be a broader, multifaceted, and more inclusive discipline that guides every aspect of business growth. Embracing a new method of revenue-centric analytics is the only way to initiate a long-term growth process.
Marketing strategies must be directly linked to profit and revenue. The transition of a CMO to that of a chief growth officer is an expansion of their responsibilities and hinges on their ability to devise an analytical approach that can increase marketing return on investment. This calls for an intelligent leveraging of the right technology. According to McKinsey, integrated analytics can reduce up to 20% of marketing spending equating to nearly $200 billion which can be reinvested or used to support the bottom line.
The transition of a CMO to that of a CGO is an expansion of their responsibilities and hinges on their ability to devise an analytical approach that can increase Marketing Return on Investment (MROI).
Building an MROI portfolio also requires marketers to keenly understand the target consumers’ buying patterns and preferences. With the help of analytics, chief growth officers will clearly identify customer-driven sources of growth, focus all their efforts on unlocking them, and then conduct regular growth audits to track progress. To bring in more revenue, the chief growth officer will need to utilize data to develop effective campaigns that use an omnichannel approach to talk to customers when, where, and on the device they prefer. To ensure durable operational changes, chief growth officers have to take the reins of change management initiatives, architect a digital business transformation, and inspire new product invention.
Internally, this would entail bridging and realigning traditionally siloed departments – particularly sales, operations, and IT – to driving targeted growth. A successful chief growth officer today will function as a nimble technocrat who quickly understands software, how it will integrate with existing systems, and how to build a team to use the software optimally for digital business transformation. Armed with data and analytics, the chief growth officer should be the ‘voice of the customer’ across the company as it responds to a dynamic and increasingly unpredictable marketplace.