Many companies are happy being driven by the market, reacting to what they feel it tells them to do. They don’t understand the concept to be market-driving. Most leading innovative companies know that reacting is not enough – and is fraught with risk to get it wrong. To react to the market’s past movement is to risk being consistently behind and giving the advantage to any competitor with better vision and focus.
Innovative leadership is to be agile, intuitive, and to consistently focus one’s vision and gain knowledge from information. It is to know to get more data and do more analysis when needed. It is to use intuition as well as technology. In the end, it is to arrive at the future first and drive the market where leadership wisdom can take it.
Market-driving vs. Market-driven
Why become Market-driving? There are many reasons, and I wrote about this in my post on “9 Differences Between Market-driving and Market-driven Companies.” If it’s not obvious, consider the example of cloud computing. No one asked for it and IT departments resist(ed) it in terms of security, etc. But one cannot deny the value delivered and the potential of the cloud. Cloud computing is a market-driving phenomena. The more market-driving you are, the more value you can create and capture.
If your company is doing fine, no need to read this. If you have no competitive pressure in today’s marketplace, no reason to innovate, no reason to grow, this blog post is not for you. Most of these concepts are already getting a lot of attention, individually. Assembling them into a strategy to make the shift to be a market-driving company however is a broader, design thinking context that is missing.
Transforming Into A Market-driving Company
1. Redefine Marketing in Corporate Culture
Historically, marketing in many companies is mischaracterized as “promotions” and is relegated to be an afterthought. Marketing should not be producing collateral, coordinating events, and other activity-based objectives unless they are part of a much broader Marketing as Strategy function of the business. The CMO’s role to lead, innovate and grow the business is as important as the COO’s and CFO’s role to maximize efficiency and cut costs. If corporate culture belittles marketing in your organization – change that, starting at the top.
2. Replace Sales Orientation with Marketing Orientation
Marketing is the transformational engine of long-term growth. Historical sales-centric approaches from the industrial era are unable to innovate long-term. The fifth year of economic down-pressure has made quarter-over-quarter thinking an Achilles heel. The sales-centric approach is transactional and therefore is not a catalyst for deep customer engagement for sustainable innovation. When customers tire of what they purchased last quarter, and the sales team has moved on to close this quarter’s deals, where will they go for innovation and engagement? Marketing orientation (engagement, innovation, value delivery, and so on) is sustainable and drives sales. A transaction-focused sales orientation is not sustainable, and will fail in the long-run.
3. Change the priority of CRM from Leads to Customer Engagement
CRM or customer relationship management tools have long been used for lead generation and pipeline management. Not enough CRM systems are used for customer engagement as is evident by “lead” and “conversion” metrics instead of value-based results metrics. Check your CRM metrics for short-term lead generation vs. long-term customer engagement.
Transfer ownership of CRM IT to marketing and ensure marketing’s strategic objectives for sustained customer engagement are primary for your CRM implementation and success. Shift ownership of CRM (both the activity and the tool) to the marketing function and change the metrics to be satisfaction and long-term engagement. Sales results will follow and they will be sustainable for the long-term
4. Make Failure Acceptable
The industrial era’s command and control management approach along with punishment, shame and guilt response to failure is over. Recognize this and stamp it out entirely from your corporate culture. Make pervasive the question: “What did we learn?” At every juncture, whether catastrophic, or minor, this question should be part of the culture-engrained response to results. People will flock to work at your company, retention will increase, and the best talent will be kicking your door down.
5. Ensure Goals Are Relevant
Goals all too often are done just to say “we have goals.” As the new year begins, think about relevance. The human resources group has a January agenda to have goals on file for every employee. Managers, with fresh memories of last year’s performance reviews in their mind frantically want something to measure performance. Have HR institute a “relevancy check” with managers in the process.
Every person should know how their own personal goals are relevant to their team, their department, their division, and ultimately, the company. How can you know? Ask!
6. Institute Customer-centricity In Corporate Culture
We say, “Customers are number one”, but how do we put it into action? The more I think about it, it’s corporate culture that has to change. Too often, people in the organization continue to believe that customer service is a department. This originates from the over-emphasis on operations for over a century of the industrial era. Now it is the social era, and the conversation we have with customers is far more valuable than the products that are delivered. It is the customer-centric two-way communication that will drive what products and services we build.
At no time in past history are the design, capability, and ultimate success of those products more dependent on customer engagement than now. Use CRM to make this possible.
7. Make Social Media a Long Term Strategy
Stop and assess social media initiatives. By now, many companies have invested in a social media agency, tried out Facebook and twitter, or have directed sales teams to use LinkedIn to find leads. These are all good ideas, but in isolation and uncoordinated, they can cost more than they deliver. The objective and goal of social media is to have a conversation with customers and engage them as your innovation partners over the long-term. Short-term actions need to be integrated into a long-term strategy.
8. Shift Analytics from Measuring the Past to Predicting the Future and Prescribing Action
What is the focus of IT and analytics in your company? How many reports are being produced to assess and report on the past? How many of these reports are read? No one really cares what happened in the past, if they are focused on making the future happen. Make an objective assessment of analytics in your company. Reconsider that the majority of effort and analysis on data, especially customer data, should be to predict the future and prescribe the direction your company will take to be market-driving.
If Big Data and Analytics efforts (and costs) are clearly aligned with engaging customers, driving customer satisfaction and making the company market-driving, reassess. You will save cost, and achieve more.
9. Broadly Coordinate and Simplify – Everything
It’s easy to see typical requests from every division coming in as new ways of achieving results come to market. Some are focused on sales, others on lead generation, and still others, on narrow improvements for a function or activity. Probably no one better than the CFO sees it as every group, team, and project comes to the table requesting capital to invest in digital, social, or other new initiative.
Today, ROI has to happen much faster, and new innovative ideas and opportunities to capitalize on tools and technologies that can grow your business are coming faster and more often than ever. Social Media alone is seeing exceptional evolution, innovation, consolidation, and expansion in terms of how companies can engage.
Look around your company and find the anchor that can drive, coordinate, and integrate initiatives such that it optimizes returns. This requires a pervasive statement to your organization that it must simplify and reduce complexity. It is a cultural shift such that the engagement and investment made in social media, big data, analytics, and other initiatives are coordinated pervasively across your organization.
More to Ponder
Nirmalya Kumar wrote in his 2004 book published by the Harvard Business School Press called “Marketing as Strategy: Understanding the CEO’s Agenda for Driving Growth and Innovation” that a marketing-centric approach is in demand today more than ever. I wrote a review – but the book is a much better read, and worth every minute. It will change your thinking about 2013.
The past two or three years have produced supporting evidence from Heidrick and Struggles, Forrester Research, Russell Reynolds and IBM’s CMO Study 2012 that as Kumar wrote in 2004, now more than ever, the CMO and Marketing are the foundational strategy for a company. Not the products, not the services, not sales, operations or finance, but the engagement with the customer. Giving credit where it is due, Peter Drucker also had this in mind when he said “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.”
Effective CMOs know that they can help every function in the company. Good CxOs will know to rely on the CMO to help with many of these initiatives that involve marketing, the customer, and business innovation. If your experience with Marketing is just promotions and tradeshows, you are missing something. Explore with an open mind why this is the case. Has Marketing been staffed with the right leaders that can deliver at a higher level? Perhaps it is a culture issue in the organization? Has HR been engaged to enable the marketing competency’s voice to be heard? Has the CEO given the CMO and marketing an equal seat at the table in the C-suite? Be honest as you ponder why some companies are agile and market-driving, while yours is still reactive, and market-driven.
Please leave a comment. Tell other readers how your organization is changing to be responsive in 2013, and how you will be transforming into a market-driving company.