A few week’s back, I was speaking at the annual CMO conference in Johannesburg. The “big challenges” ahead for the CMO are always similar and revolve around a mix of changing customer behaviours, new formats to interact with them, and using (big) data to understand if what you did made an impact.
In fact, during the event, the latest IBM CMO study was launched. These studies are often used to prove that CMO’s today are totally overwhelmed with all the new challenges. However, the savvy CMO will look at the studies and use it as an opportunity to examine his or her own unique organisational mandate.
Fundamentally, it is a simple question has haunted CMO’s for a while: how do you add value?
Before answering this question, CMO’s need to better define a future playing field. CMO’s need to stop talking about “communication issues“ to their colleagues in the C-Suite and much rather embrace an older view of marketing as stated by Peter Drucker in 1973:
“Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: Marketing and Innovation. Marketing and Innovation produce results; all the rest are costs. (…) Innovation is the specific instrument of Entrepreneurship. The act that endows resources with a new capacity to create wealth.”
What can we derive from this change in the CMO’s playing field? This new definition allows CMOs to operate in innovation and entrepreneurship. It is here that CMOs can truly add value and help grow the brand and business.
By embracing the various new ways of transacting commercially with consumers, the CMO will become a key contributor to “future-proofing” a company´s business model and value chain – both areas that it has no licence to operate in yet. Marketing thus becomes a clearly value-adding function of corporate or business development with the core task of business model and value chain innovation.
To see how this new mindset plays out in practice, we can explore the example of mobile operator MTN. MTN has strategically defined itself as a customer-centric organisation that co-creates value with its customers. This has far-reaching implications at the business model level. Since customers prefer to use VOIP like Skype to make calls, MTN is honest enough to declare the end of voice revenue – its current core business. This allows them to focus all their efforts in building new revenue streams outside of the current comfort zone and having to partner with businesses outside of their industry.
On an organisational level, MTN has integrated the Innovation function into the portfolio of the CMO since they believe the magic sweet-spot lies between technical feasibility, financial viability, and human desirability. New ventures are incubated by a dedicated team of Entrepreneurs and then integrated into the organisation when ready.
The CMO is thus forced to combine technical with financial knowledge to then develop a more integrated customer value proposition in order to get an investment decision from the executive committee. This combination of Marketing with a heavy dose of Innovation and Entrepreneurship has allowed MTN to launch a purely cellphone-based bank, a mobile health offering and other products in the insurance space.
This is just one example, but a smart CMO and the perceptive company will realise the best path would be to start engaging with their respective organisationsA in this paradigm. While many CMO´s will have to upskill themselves and their teams in order to successfully deliver on this mandate, you may end up seeing many dancing elephants and perhaps even a flying pig or two.
Ulrich Meyer-Höllings is an Associate Director at Vivaldi Partners Group