Valos Advantage: CMO innovation skills and tips for implementation
Come beyond marketing with Michael Valos, as he investigates the necessary skills and mindset to enable innovation, as well as the organisational conditions in which it can flourish.
This is the third in a series of articles that look at the six key specific marketing skills required by CMOs to be successful in the contemporary environment: strategic insight, digital strategy, marketing innovation, customer insight/marketing metrics, commercial acumen and brand management. Unlike some articles on marketing skills, the focus in this series is on a strong implementation link.
Typically, implementation issues include: emotional intelligence, communication, employee engagement, conflict management, training and recruitment etc. The assumption underlying this series of articles is that senior marketers need more than technical skills to be successful. As they rise to leadership, they become managers of other people and must be able to link marketing processes to a wider organisational implementation context.
The six key skills to be examined were derived from focus groups I conducted with CMOs and marketing leaders from such organisations as ANZ, AGL, Telstra, L’Oréal, Deakin University etc. Next, the skills were validated by two highly respected industry experts: Christine Khor, managing director of Chorus Executive, and Anna Whitlam, managing director of Anna Whitlam People.
Marketing innovation: skills and mindset
Thinking more broadly than marketing when looking for innovations or implementing them
According to Briony Amey, director of audience engagement, APM, Fairfax Media, the answer to my question: “Why are some CMOs more innovative than others?” is “Because some CMOs are simply better than others! A good CMO has a solid understanding of their organisation, consumer, brand and category, making the parameters for innovation far more defined and the ability to innovate effectively, much easier.”
Amey’s point was raised in some of the interviews. Examples were given where the scope for innovation given to employees was too broad relative to the organisation’s capabilities. This resulted in inappropriate or impractical outcomes for that particular organisation. “The first task of the CMO should be to interrogate the insight and determine the best solution. Only sometimes (even rarely!) this may be a solution that involves actual ‘marketing’ – innovation in other areas may prove a more effective outcome,” says Amey.
Embracing learning and embracing risk
“Innovative CMOs have embraced a learning culture,” says Paula Parkes, head of Marketing, Digital Marketing – Asia Pacific, Adobe. She believes innovative CMOs have different personality traits. “They are less risk averse and have adopted a ‘test and learn’ mentality, allowing them to fail fast or adopt quickly in breaking new ground. For example, innovation is driven by CMOs who have the ability to recognise that digital can deliver end-to-end business transformation. Innovative CMOs understand the benefits of digital marketing, including speed to market and measuring a return on investment.”
I would agree digital is a major opportunity and/or threat facing marketers today. The interviews I conducted showed CMOs need to be more innovative than their leadership peers such as CFO, CIO and HR. They need to respond to changing consumer, competitor and technology characteristics, and, at the same time, align these changes with internal changes required to serve ever-changing consumer product and channel needs and preferences.
Innovation from online attitudinal, transactional and behavioural data Daniel Aunvig is head of customer intelligence of SAS. He has seen a number of innovative uses of data that have led to more effective marketing programs. “Great innovation has many origins, but key amongst them is that some CMO truly understands the full value of the resources at their fingertips. All the customer data they collect, integrate and deploy for multi-channel communications represents much more than an opportunity to create compelling offers and communicate relevantly.”
Coincidentally, I am currently involved in a Deakin University research team studying the use of social media monitoring by 15 prestigious Australian blue chip organisations. The study examines how they capture this digital data and utilise it to create business value. Our work supports Aunvig’s comments. According to him, “Not only does this transactional and behavioural data provide disruptive insights, it also offers a new way to cut through bias, simply by picking up behaviours and transactions and linking them to strategy in real-time – or right time.”
Components of the innovative mindset
Anna Whitlam has recently been involved in some major organisational restructure projects and she highlights the link between the dynamic external environment and the internal mental traits of the innovative CMO. “While I believe innovation is a learned skill, some marketers are more naturally aligned to being innovative than others. Given the dynamic of our rapidly changing world, the demand for CMOs to use their skills that make up ‘being innovative’ is now critical to their success.”
Whitlam goes on to break down innovation in terms of practices and behaviours she has seen in successful CMOs. “Being innovative involves questioning, observing, experimenting, adapting. From our experience, these are all critical capabilities of any successful CMO.”
Flexibility, adaptiveness and the ability to deal with complexity
“The export education industry is likely to be $19 billion by end of the decade,” according to Gretchen Shillabeer, manager of international partnerships, Deakin University. “Innovative marketers need to be strategic, flexible and adaptable in this highly vulnerable market. The dynamics of this market are due to foreign political instability, currency fluctuations, and increasing local and international competition – the latter brought about by the emergence of world university rankings and an emphasis upon online marketing tools.”
We can add the ability to deal with complexity and uncertainty to Shillabeer’s success checklist. “Marketers need to deal with complexity created by a focus upon quality, diversity across nationalities and discipline areas, online globalised marketing and compliance with current Australian regulations.”
Beyond marketing: making strategy happen
The remaining section of the article provides insights into the implementation of innovation. As discussed earlier, this series of articles goes beyond the technical aspect of the marketing discipline and seeks to integrate marketing skills with organisational implementation insights. The respondents consider that the ability to engage the organisation in order to deliver the innovation is the most difficult challenge of all. As mentioned earlier this series of articles attempts to bridge the link between six key CMO skills and organisational and implementation with the purpose of ‘making strategy happen’.
Impact of organisation size and culture on innovation
Chris Khor regularly places senior marketers in blue chip organisations and suggests the innovativeness of a CMO is strongly linked to organisational culture. “Innovation is borne from creativity. Some CMOs are more innovative than others not just because they are inherently creative, but also their environment is one where they are allowed to be creative.
An environment that allows risk, accepts failure and measures success in a number of ways, not just financial, is one where true innovation can occur.” The interviews support Khor with a number of interviewees describing how inhibiting a negative culture can be to innovation. According to Khor, “We see more innovation and creativity in small businesses. Unfortunately, larger organisations tend to have a greater focus on systems, process, reporting and financial results.” (This is echoed in one of the resources.)
Empowerment means implementation momentum
According to Briony Amey, “Empowering individuals to harness innovative thinking and having cross-functional teams to work through in a collaborative way generally builds for better outcomes, not necessarily in generating the ideas in the first place, but certainly in gaining the momentum of different areas of the business to actually take these ideas through to execution.”
The Whirlpool case study in the resources and a number of suggestions were developing this cultural momentum discussed by Amey.
Formal structures and alignment of strategy and implementation
While Amey and Khor discuss how aspects of organisational culture affect innovation, Whitlam raises the importance of having a supportive and facilitative organisational structure. “Innovation starts with the alignment of the business strategy to the organisation strategy. Organisations need to adapt and change. It’s not enough to be able to come up with good ideas; organisations need to be structured in such a way that will enable ideas, as well as the ability to easily bring the ideas to life… therein lies the challenge!”
Communicating the value of innovation
“If there is no clearly articulated benefit to the stakeholders involved, then innovation is much more elusive,” states Aunvig. He identifies a link between engagement, accountability and communication. “It is important to involve key stakeholders from the outset and include them in analysing progress. While they won’t be impacted until later in the process, they will share accountability for the outcome.”
Echoing his comments, Parkes believes, “Implementing innovation starts with the ability of CMOs to influence the business, lead through example and promote a cross-function collaborative culture.” With digital marketing providing more behavioural data points and integrating advertising spending with customer relationship management databases, the process of communication and influence should be easier for CMOs. “Successful CMOs understand that digital marketing can assist with influencing key stakeholders. Using the most relevant data-points, CMOs can drive KPIs and measure ROI more accurately than ever before. “
In closing, these interviews (and the resource readings) have shown what it takes to identify innovative opportunities, but in addition they have shown what it takes to actually deliver innovation. In an increasingly unpredictable, complex and dynamic external environment that demands innovation, success comes with a perspective that goes ‘beyond marketing’.
Coming in at number one in terms of innovative companies is Nike. It ticks all the boxes: incorporating digital technology, modifying manufacturing processes, closely watching competitors and being customer driven. Just one extract from the CEO, Mark Parker, to tease you: “One of my fears is being this big, slow, constipated, bureaucratic company that’s happy with its success,” he says. “Companies fall apart when their model is so successful that it stifles thinking that challenges it. It’s like what Jack Nicholson’s Joker said: ‘This town needs an enema.’ When needed, you’ve got to apply that enema, so to speak.”
What are the five reasons that large successful organisations such as Apple, Amazon and Google have become exceptions to the rule and avoided becoming risk averse like the under-performing or failed Pan Am, Borders and American Motors? The article discusses cultural and psychological issues that arise with size and success. It highlights decision-making, recruitment and promotion among other implementation variables that must be managed to avoid complacency and risk averse behaviours and thinking.
This article discusses the transformation of Whirlpool, a troubled appliance company that systematised companywide innovation to the extent it has won multiple innovation awards. The influence of structure, process, CEO support, culture (i.e. accepting a degree of failure) and metrics on innovation are all addressed in this comprehensive case. I particularly enjoyed one of the seven key learnings. It neatly explains what innovation is and what innovation isn’t! “Innovation really can be systematised as a core competency. Treating it as a program will yield ‘programmatic results’ at best. Treating it as a separate skunk works or think tank will yield less still. But turning innovation into a management system requires vision, perseverance and purpose.”