Transformation is Everyone’s Job, not Just the CMO: “Will 2015 Be The Year Of Digital Transformation?”

CMO magazine predicts 2015 will be the year of “digital” transformation for most orgs. They asked a bunch of CMO/Marketing leaders to offer some predictions for the year.

These days digital transformation is top-of-mind for CMOs, and it reaches all corners of marketing. That includes devising new strategies to meet the expectations of omnichannel customers, capitalizing on what new technologies now enable (geotargeting, personalization, and automation, to name just a few), and changing the makeup of the modern-day marketing team to ensure the right skill set.

If you’re a CMO and you’re just getting to this, it might already be too late.

The real challenge to a “digital transformation” is that the CMO will only be a cheerleader (worst case) or one key leader in the executive suite (best case). The real transformation has to happen in organizations the CMO doesn’t always control.

Business Units – Short and long term incentives, promotional criteria and budget allocation all need to change. For example, digital transformation requires a ton of experimentation. Experimentation equals risk. Most good marketers have incentives that do not align with risk and change. Transformation requires, by definition, change.

IT – Systems, tools, incentives and budgeting will have to be changed. For instance, most capital budgeting requires some sort of ROI estimate. Most of the “digital transformation” investments will have, at best, a hazy ROI horizin. Yet, the investments need to be made to enable the transformation.

HR – The way organizations hire, develop, train and evaluate teams will have to change and the CMO rarely has direct influence over the group. For example, organizations will need to promote teams that have a high confidence in ambiguity, can lead through change, are resilient. Most importantly, business functions will need to reward true creativity.

I love the discussion of driving transformation. There’s a ton that’s needed. But, it’s not just the CMO’s job. It’s everybody’s job.

CMO’s, Brands and Innovation: The Factory, The Lab & the Studio

It’s great to see smart brands investing in “Labs” as outlined in this recent Adweek article about pushing the frontiers of retail. You could also look at Kraft, Nike, Mondelez and even good old General Mills (but, their Marketing Lab is now defunct based on what i’ve heard recently). It’s easy to see why a big company would want to create a “Lab”:

  • Try out new technology (without committing to long term support and integration)
  • Try new approaches, methods and processes (without committing to roll them out across the rest of the company)
  • Try new partners (without having to form long term relationships)
  • Try new business models (without committing to long term capital)

And a bunch of other benefits.

I’ve been thinking about what a modern marketing team really needs, going forward. The forward thinking CMO’s will recognize that the “Lab” is a critical piece of a larger transformation effort. But, it’s not the only one. The CMO office will need to drive change through three pieces working together:

  • The Lab – The place to, literally, experiment. Try new things, new tools, new skills, etc. This is where real innovation is found and validated.
  • The Factory - This is where the content/marketing gets made at scale, efficiently with a core focus on delivering immediate impact, now. In general, this will be delivered by the current roster of agencies and other partners who are on the hook for content and brand building materials. CMO’s will need a way to inject the innovations created in the “Lab” into the Factory. Smart agencies will be actively looking for ways to translate what works in the lab into their everyday work.
  • The Studio – The Studio is about craft, art and excellence. Generally, this is the content that is small, well crafted, and focused on making more of a statement. If brand content has the possibility of being art, the studio will craft it. Where the Lab is all about the “new” and “better” and the Factory is all about the “Scale” and “Efficiency” and results, the “Studio” is about delivering the highest quality possible.

The job of the Chief Digital Officer (or the CMO herself) would be to integrate the three really effectively to deliver the results any good marketer needs:

  • In Market results, now – The traditional results that marketers and business builders really need: Reach, frequency, depth, conversions, loyalty, advocacy.
  • Better consumer knowledge – Data about the consumer and their interaction with the brand and the insights that come from the combination of data analysis and good old fashioned intuition
  • Better operations – New ways of working, new techniques & tools to do the job better
  • A clearer sense of what’s coming next - Stronger intuition about how the marketer can better serve the consumer AND build a longer term advantage for her brand or her company

This is pretty much thinking out loud. I hope to come back and work on these ideas.

The BlockChain is the Beauty Inside Bitcoin

I need to come back and write up a clear article on this, but i’ve been digging deep into Bitcoin. Not the cryptocurrency part, but the actual protocol behind it. The think i’m curious about: What else could we apply the blockchain concept to. That is, what kind of decentralization can happen when there is a secure, transparent, open, scriptable, public ledger holding the system together.

Lots more to think about,  but here’s a couple important articles for my own future reference:

 

One Good Writing Lesson from Mad Magazine’s Al Jaffee

I think this is pretty good advice for any writer. It’s easy to be emotional and strident, but the best work channels that energy through a distinct, mostly consistent view of the world. And then, funny is usually better.

“When we’re successful, it’s a funny take on a serious subject,” explained Jaffee. “When we fail is when we preach.”

via Cartoonist Al Jaffee Reveals the One Fold-In ‘MAD Magazine’ Wouldn’t Run | Newsmakers – Yahoo News.

True Big Data / The Atlantic Wins Journalism

If you want a good example of what “Big Data” really means, it’s this. “Big Data” isn’t just “shit ton of data”, it’s “amazing and proprietary insights that could only come from very creative analysis of a shit ton of data that only we can get our hands on”.  So, stop referring to your little facebook data project as “big data”.

And, for what it’s worth, the Atlantic just showed you what’s possible when you cross a curious journalist with a hacker’s mindset. So very cool.

 

Using large teams of people specially trained to watch movies, Netflix deconstructed Hollywood. They paid people to watch films and tag them with all kinds of metadata. This process is so sophisticated and precise that taggers receive a 36-page training document that teaches them how to rate movies on their sexually suggestive content, goriness, romance levels, and even narrative elements like plot conclusiveness.

They capture dozens of different movie attributes. They even rate the moral status of characters. When these tags are combined with millions of users viewing habits, they become Netflix\’s competitive advantage. The company\’s main goal as a business is to gain and retain subscribers. And the genres that it displays to people are a key part of that strategy. \”Members connect with these [genre] rows so well that we measure an increase in member retention by placing the most tailored rows higher on the page instead of lower,\” the company revealed in a 2012 blog post. The better Netflix shows that it knows you, the likelier you are to stick around.

via How Netflix Reverse Engineered Hollywood – Alexis C. Madrigal – The Atlantic.

Why Didn’t Honeywell Invent Nest? The Value of Purpose

Evidently, Nest is worth a couple billion dollars in the minds of investors. That company didn’t really exist a couple years ago, but investors see the potential and Nest is a good example of how a purpose-lead company can spark new growth by reimagining old businesses.

But there are higher risks, of course, with hardware-focused products like Nest, compared to software-only investments, due to the more costly ramp up for such products. But said one investor, “This is a company that could change how we live our everyday lives,” noting the tight integration with mobile phones was a key step in the evolution of such devices.

via Nest Raising Huge New Round From DST, Valuing Smart Home Startup at Upwards of $2 Billion | Re/code.

Why didn’t Honeywell invent Nest? There is no doubt the halls of Honeywell are filled with incredible technologists. They have installs in god knows how many homes in the US and around the globe. Is it because their business model is so heavily focused on resellers and contractors? Is it because they forgot what business they are really in (e.g. “we’re in the comfort business” vs. “we’re in the thermostat and electronics business”). Is it because the actual product would have cannibalized the rest of the line? Perhaps the actual Nest product wouldn’t have been a big enough opportunity for a 72Billion dollar company. Finally, perhaps the leaders at Honeywell have a really healthy and profitable thermostat business already in place and didn’t see a chance for a significant change in their growth curve from real innovation from their core products.

Here’s a clue,  from Nests “about us” page that reveals how purpose guides their approach: 

About_us___Nest

Simple. Beautiful. Thoughtful. They’re focused on “unloved” things. They know no one loves their thermostat.  But, their purpose is to make things you’ll reconsider and then fall in love with. It’s a design approach and a laser focus on the consumer mindset. They are an end user oriented company that has empathy as their core lens. Tech, coding, sales, marketing and everything else come afterwards. Rethinking old problems to help consumers is core to their culture.

Now, check out Honeywell’s “About us” page (actually, there are a number of Honeywell “About us” pages. This one is for their consumer products):

About_Us_-_yourhome.honeywell.com

While it’s great that they are customer focused, it’s pretty clear that their customers are NOT consumers. They’re focused on resellers, builders, etc. They are designing products they know their real customers will buy, not products consumers are going to fall in love with.

Business school students will be reading case studies about Nest for years to come. It’s going to be interesting watching Honeywell’s response. Not only do they have a product challenge, but they are going to have a business culture problem, as well. They can compete on technology, but will they be able to get over the internal cultural barriers that will make it difficult to truly put the consumer needs first? Will they be able to reconnect with their core purpose as a way to re-orient their product and marketing efforts?

A little glimpse into the Future of Brand Building

I was part of an interview that AdFed did w/GoKart Labs for their year end wrap up. I’m really excited about where this GoKart team can take brands. We’ve got the talent, the ideas, and the capability to make a real difference for brands. Should be a great 2014!

 

We are excited about modern brands that are moving beyond simple “messaging” (i.e. ads) to actually making apps, services, platforms and utilities that create deeper connections with their current fans in more useful, relevant and participatory ways. New users, new buyers, will become aware of brands and business through the things their friends do *with* these platforms and the content. These investments in useful content and services create organic growth for brands, whether its deeper loyalty, sharing or even offline word of mouth.

via AdFed – Made for those who make.