Earlier today, I presented to 500 attendees at the P&G Alumni Conference in Cincinnati. Since I speak without slides or notes and there were several requests for a summary, here is a remembered version.
It is somewhat ironic that I am at the place where modern marketing was born and where working for one of Procter and Gamble’s agencies, I learned marketing in your former place of work, that I am here today to speak about re-invented marketing and what we have all have to do to transform ourselves and our organizations.
Has marketing been re-invented?
Absolutely ! And many of the things we were taught and guided us have shifted dramatically and have left us and our organizations less relevant.
- Gods not Consumers: We always were told that we needed to focus and listen to customers and find ways to enable and empower them. We planned media to reach them. But today with new digital technologies and social networks people are already empowered and enabled and in fact have God like power. They are media themselves and they start campaigns and we react to them. Marketing will be even more important in the future because marketing is understanding and meeting people’s requirements and as they get more powerful, marketing becomes more important.
- Brands matter but the old ways we built Brands matter less: Brands are the ultimate navigation devices in a world of fragmentation and the value of Brands are increasing. However, the way brands are built is changing. Its less about communication and media and advertising, and much more about utilities, services and experiences. Advertising in the Western World is in long term secular decline as people do not just eliminate, skip and block ads but increasingly spend more and more time in ad-free environments like Netflix. Scott Galloway the NYU professor rightly has said that “advertising is a tax that poor people have to pay”. We now need to create great experiences, jaw dropping design, convenient utilities and satisfying services and let people talk about them. While we are in an age of secular decline of advertising we are in a renaissance of marketing.
- Scale matters but not the scale we know: For many years scale was a moat. Media spending bought out key channels and created frequency and reach. Big budgets ensured slotting allowances. Huge factories allowed for reduced costs. But today, most of this bulk driven scale is not as advantageous as the scale of data and the scale of networks. It is this new scale that Facebook, Google and Amazon leverage and that enable a Dollar Shave Club to offset the old scale advantages of established firms by using search, social, compelling content that spreads, Amazon web services and other ways to build businesses.
- Capital is cheap but Talent rare: Most successful companies attracted talent as the best people fought to work at the Procter and Gambles and GE’s of the world. This is still true in places like China and India but in many developed markets attracting and retaining talent, rather than access to capital is key obstacle. We seem to still be operating in yesterday’s model. Why find ways to reduce the cost of people just when you need great people and partners the most? Yes, one needs to be more productive but this means more with less and not necessarily more for less! The “way” we were all taught and the “dues we paid” are increasingly irrelevant and uninspiring for much of today’s top talent.
These changes in people’s behavior, the ways brands are built and what scale means and how talent is inspired in a new world, will shift even more profoundly as we enter the Third Connected Age.
The Third Connected Age
The first connected age emerged in the early 90s with the advent of the web browser. In this era the key connection point was a link and the company that best monetized the link was Google and it gave birth to the power of search.
The second connected age occurred ten years ago with the advent of the smart phone and social networks where we were connected to everyone and everything. Apple monetized the phone best and Facebook the social network.
Not surprisingly, 3 of the 5 most valuable companies today are Facebook, Google and Apple.
We are now at the dawn of the third connected age where there will be three new forms of connections besides the link, mobility, and social, which have already re-invented marketing since peoples’ behaviors and potential have already changed profoundly. These are:
- AI: Artificial Intelligence is data connecting to data and writing algorithms. Today, a third of Amazon sales and two thirds of Netflix watching are based on their recommendation algorithms. Co-relation between data sets that allow machines to learn is a big part of our future.
- IOT: Here things connect to things. Not just small things but consider your phone connecting to an automobile when you use Uber or Lyft. These things bring along some carbon-based objects, which is you connected to the phone and the driver connected to the car!
- New ways to connect: Voice is a new way to connect and engage as are Augmented and Virtual and Mixed reality. There will be new ways to connect and tell stories.
Transforming our organizations
To succeed in this new marketing era, we must recognize that our companies have been optimized for the past. The future does not fit in the containers of the past and we must re-configure our organizations to succeed.
What do modern successful firms look like in this connected age?
- People obsessed: These companies are obsessed about people. People who they sell and provide services to, as well as the talent in their organization. They do not just react and listen to people but they anticipate. They gain prescience by seeing patterns either via algorithms or just looking and connecting the dots. It was prescience that helped Apple and Facebook and Google become what they are.
- Friction Free: Wherever there are people there is drama. Everything is easy but people come in the way. There is no need for the customer to see how the hot dog is made. Hide the complexity. How to ensure that the internal friction of a company is reduced? Align and incentivize the right behaviors ! If you understand someone’s incentives you can predict behaviors. No use talking about collaboration if you are incentivizing competition. Press releases about innovation without significant budgets backing them is nothing but bullshit and all your people ( and partners) know…
- Modular: In a connected age, we can expect people to connect best of breed. No single company can do it all. We are living in an age where everything is first unbundled and then re-bundled (customized) around specific needs. We no longer buy CD’s or even songs but rather put together playlists on Spotify customized to our mood and occasion. We need to ensure we are ready for modularity.
- Seamless: Make your company easy to engage with. Make your systems API ( Application Protocol Interface…the only technical term in this paper) friendly. Make one person responsible for a relationship who can orchestrate a solution.
- Data Driven Storytellers: Good stories will often beat good spreadsheets, but a great story and a great spread sheet combined are unbeatable. Modern organizations understand that data is critical as oil but the value is in the refining with insights and the extra additives that make the data truly move with stories and more. Spreadsheets themselves are a terrible window into the future.
Today, every firm should start with a blank sheet of paper and keep the above criteria in mind as filters, while limiting themselves with only two constraints. The first is to be lawful and second ,whatever is developed should show a path to breakeven within 3 years. Then go invent something that puts you out of business ! If you come up with something that frightens you make sure you do it , or you will have your “Dollar Shave Club “ reckoning the way Gillette had theirs.
Companies work hard to transform and many times these require significant M&A and organizational changes to ensure the company can be more efficient, work with greater agility and reflect reality. But while these are often necessary they are not sufficient because one has to address the big area of people and talent. Eventually companies only transform by changing the people or changing people’s mindsets. Since I myself, prefer remaining employed, as many of us do, we need to transform ourselves to remain relevant ( and employed).
Here are three suggestions on upgrading yourself.
1.Address the Fear of the 4Cs: Today we fear Change. We worry about our own Competence. We fear Cannibalization. And sometimes we work in fearful Cultures.
All of us are human. Change sucks. It requires us to learn new things and like all beginners we look stupid! As a result the more successful and senior we are, the more we resist. But, if we want things to stay the same for our career trajectory, the more we will have to change !
We wonder whether we are competent and our skills our relevant. Some of our skills remain valuable and others have to be unlearnt and some new ones added. If you do not invest in learning and training you will become obsolete.
All of us often know what the right thing to do is. But new products and service ideas are likely to cannibalize todays cash cows and cash flows. The choice is easy. Cannibalize yourself or let someone cannibalize you. While it is not pretty ( or tasty) if you cannibalize yourself, at least you will remain alive !
And finally, many of us work in cultures that sometimes do not allow one to speak up and challenge the status quo. Make sure it is the culture and not you who are afraid. If it is the culture go to management and ask them to address it. If they do not, you should plot your exit since fearful cultures are unlikely to succeed in todays connected and increasing transparent age in attracting talent.
2.Do less. Learn and Recognize more: One of the biggest challenges in today’s fast moving workplace is how to find the time to learn new skills and to think about the impact of changes that we all face. Senior management in particular is always busy.
Truth is most of this busy work is just motion. Motion and commotion that we initiate. Meetings we call. Emails we fire off as if we have ADD.
Learn to be still.
As a leader why not become an on demand or just in time service? Delegate everything you can and wait for people to call you when you are needed. You will find three things. First, your people will get better and grow and their people will also get better and grow. Second, you will be called into places where you add genuine value versus being the senior person who is needed for any meeting to proceed. Get over yourself. People are genuflecting to your title and not to you. Finally, you will free up time to learn and to observe and to see patterns. Get out of your in box and to do list. They are colonizing your mind and destroying your creativity and slowly corroding your relevance.
3.Recognize that while you are living in a digitally dominated, silicon based, constantly computing world, you are a carbon based, analog created, confused feeling person , as are the people who work for you and you sell to: Blaise Pascal said “we choose with our hearts and we use numbers to justify what we just did”. People follow emotions and stories and not just facts. In an age of machines, let this advanced math major assure you that we are no match for the computing and display and algorithm capabilities of machines. So, stop fetishizing just numbers and digital and technology. Joan Didion wrote “we tell ourselves stories in order to live”. Lead with your humanity and combine the math with meaning. The spreadsheets with the stories. The data with the insight.
And you will soar as you always have and write the new story of marketing.