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SECRETS TO BUILDING A WORLD-CLASS BUSINESS THROUGH LEADERSHIP MARKETING

SECRETS TO BUILDING A

WORLD-CLASS BUSINESS

THROUGH LEADERSHIP

MARKETING

During this economic recession, companies are focused on in-

creasing earnings and revenue. Many companies that were hit

by the economic downturn in 2007 are still struggling to bring

sales back up to pre-recession levels. These companies are try-

ing to determine the size of the current market and establish a

new baseline for growth. In many cases, these companies are not

prepared to grow new markets, because their management team

has failed to deliver new business and growth opportunities.

Many companies fail to realize that they must have a diverse port-

folio of product lines to be successful. Marketing executives tend

to categorize these portfolios of products into core, scale, and new

business interests. Core products are the slowly growing or de-

clining, highly profitable, traditional business interests that spin

off a lot of cash. An example is Kodak’s traditional film business.

Scale products have growth, established market success, and

profitability. HP’s LaserJet printer is a good example of a scale

product. HP could not build enough of them. The key issue re-

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garding scale is how to take a product from ten thousand to one

million units a month, while building the organizational capabil-

ities, infrastructure, and processes needed to achieve that level

of success.

Finally, new products are those that show future growth but have

limited revenue and profitability today. The goals for new prod-

ucts are to expand to capture a broader market share, reduce

costs, and stabilize quality. The underlying assumption is new

products and businesses will grow (scale) in the future.

There isn’t always a clear distinction between the three product

categories, as scale products and some new products can be em-

bedded within or operated adjacent to core products. There are

many books that discuss product life cycle management and a

number of models that can help companies understand the process.

This is where a marketing leader comes into play. In many

companies, marketing is relegated to the corporate marketing

functions of branding, advertising, PR, communications, social

media, and the Web. These are very important functional areas

of responsibility for marketing, but because of a lack of mea-

surement on the return on investment, guess what happens when

times are tough? Marketing expenses get whacked because, as

market leaders, we have failed to deliver hard numbers to justify

the return on marketing investment (ROMI). In other situations,

marketing departments are structured around the product, and

business groups and resources are minimized for corporate func-

tions. This is especially true in consumer marketing because the

brand (e.g., Tide detergent or Crest toothpaste) is more impor-

tant than the corporate brand, which in this case, is Proctor &

Gamble. While this is good for the development of new product

roadmaps, it often falls short on really driving the levers of de-

mand, especially in business-to-business (B2B) companies. Le-

vers of demand are complicated. They require strategy, program

development, and execution in a variety of geographies, with

channels, partners, sales, and customers, depending on whether

you are a B2B or B2C company.

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SECRETS TO BUILDING A WORLD-CLASS BUSINESS THROUGH LEADERSHIP MARKETING

Some companies have all of these functions. The problem is that

they are often organized in a fragmented way, with chunks of

marketing functions distributed to product divisions, regions,

and partners. They are not managed in a holistic way. No wonder

the function of marketing is challenging to manage. You would

be hard-pressed to find similar fragmentation in other functions,

such as R&D, finance, or manufacturing. Of course, there is the

old adage that everyone is a marketer, both figuratively and liter-

ally. Who reading this chapter hasn’t attended a meeting where

the CFO or CEO thought he or she could write a better tag line

than the marketing team?

To become more strategic, marketing departments need to be

organized to deliver strategy and execution to both internal and

external customers and be able to link and unify the customer

touch points across the organization. Who else can do it? The

successful implementation of marketing—from product concep-

tion (cradle) to obsolescence (grave)—requires functional com-

petency, as well as a means of building collaboration and systems

to improve the customer experience. In the July 2011 edition of

McKinsey Quarterly, the authors suggest that customers engage

companies and functions, such as sales or support, at a variety

of touch points (product awareness, considerations, uses, etc.)

and that many of these touch points are outside the function of

marketing. According to the authors, “…a comprehensive strat-

egy for engaging customers across them rarely emerges and, if

one does, there’s often no system for executing it or measuring

its performance.”

In some ways, the marketing function needs to be organized like

a data network, with nodes, speed, interconnected systems, and

data flow. As a result, I believe the most successful marketing

organizations and leaders create and blend roles that drive busi-

ness growth and deliver upon their functional objectives and de-

liverables. This is crucial to the role of marketing and CMO. So

let me share something I have learned after being in the market-

ing function for over 25 years.

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IN IT TO WIN IT

The more the marketing role is structured around deliverables and

tactics, the less value the rest of the company (and the people who

manage the budgets) will ascribe to the marketing function. In con-

trast, the greater the ability of marketing to influence the business—

whether that be with strategy, value creation, new product devel-

opment, or growth initiatives—the more value and importance a

company will derive out of its marketing organization.

In my consulting practice and network, I have met many compa-

nies claiming enlightenment about the value of marketing. They

say they want to build strategic marketing organizations, invest

money, hire talented people, and so on. The goal, of course, is

admirable. But then the tough questions are asked. You find

out that the marketing department doesn’t report to the CEO or

president like the HR, finance, and operations departments do.

Marketing reports two or three levels down in the organization.

Is that a strategic investment in marketing? Ask another ques-

tion, and they will tell you they don’t know much about market-

ing. They read or were told by some consultant on the board that

it is important, and they want to invest in it but watch it from a

distance. “Prove to me that marketing has strategic value and we

will elevate it in the organization,” they pontificate.

In many cases, the marketing professionals who take on these

roles are doomed to failure because their organizations are not

really ready to engage or support the marketing function at an ap-

propriate level or intensity. Finally, some sales-focused organiza-

tions, CEOs/owners and managers are not ready to be enlightened

by a more capable and powerful marketing organization or leader.

In fact, I would go out on a limb and tell marketers to be cau-

tious when considering jobs where the leader runs both sales and

marketing. I have seen so many marketing organizations be over-

whelmed by the “tyranny of the current.” What I mean by this is

that the marketing function under sales is often reduced to short-

term, tactical training, sales tools, and data sheets. In fact, where

marketing reports to in the structure, be it the CEO, president, or

sales leader, is a good barometer of how strategic the function is.

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SECRETS TO BUILDING A WORLD-CLASS BUSINESS THROUGH LEADERSHIP MARKETING

Think about it. All of the key areas, such as the HR and finance

departments, report to the CEO, yet the marketing department re-

ports to an executive one level below?

So what roles make a marketing leader world class and increase

the chances of success? After observing and managing great and

not-so-great marketing organizations, I believe there are six key

roles that most successful marketing organizations (and the lead-

ership within them) play. Implementing them greatly improves

the chances that world-class marketing will be delivered.

• Be the Strategic Visionary for the Business – Help the

company and the board see what success in the future

will look like to shape the company’s direction. Be an

externally facing PR/Industry Analyst spokesperson,

along with the CEO and other executives, to exuberantly

evangelize this vision and strategy. In other words, set

the business and strategy of the entity first, and run mar-

keting second.

• Grow Revenues and Shares While Effectively Man-

aging Profitability – Be the champion of growth in the

company. Build strategic plans, portfolios, and initiatives

that drive short-term growth and long-term revenue and

market share while delivering on the bottom-line prof-

its of the company (net profit, operating profit, EBIDA,

etc.). Help the business extract more profit by recom-

mending upsell products or changes in pricing or the

marketing mix. In a survey conducted in Spencer Stuart’s

9th annual CMO Summit, the top three marketing priori-

ties were to drive top-line revenue growth, acquire new

customers, and grow the market share.

• Identify and Create New Business Opportunities –

Help the company identify new and adjacent business

opportunities, which are market segments that can be

grown organically or through acquisition. Assist the

company with its decisions to make, buy, or build. Fi-

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nally, lead the organization in the identification of po-

tential partners or acquisition targets, if it is not growing

organically.

• Bring the Voice and Insights of Customers to CEO

and C-Level Staff – Do it in a way they can be internal-

ized and used by the C-Suite to create value and a com-

petitive advantage for the company.

Listen to what customers and performance analytics are

saying. Create different ways to interact with them and

to capture that feedback (e.g., social media). Be able to

aggregate the data and provide meaningful insights that

are credible and actionable.

• Create and Manage the Right Marketing Structures

– Be able to successfully brand, create, introduce, man-

age, and sell a company’s products and services at the

appropriate cost and with the right return on investment.

Not everything in marketing is fun and glamorous. There

is a need to create structures that measure the marketing

investment return of the money we spend, and to create

structures and processes to get what we need out of the

organization to deliver the functional goals. In addition,

we also need to be skilled in the functional practice of

creative and innovative marketing and understand and

master relevant, new marketing techniques and practices

as they evolve. The aforementioned Spencer Stuart sur-

vey identified 1) metrics and analytics, 2) social media,

and 3) digital strategy as the marketing capabilities need-

ed to build or add to the company’s marketing strategy

and priorities.

• The Proper Role of Marketing is a Blend of Activi-

ties and Roles Over the Strategic Planning Horizon -

Spend too much time in strategic planning, and the com-

pany may view marketing as being in an ivory tower.

Spend too much time in tactical execution mode, how-

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SECRETS TO BUILDING A WORLD-CLASS BUSINESS THROUGH LEADERSHIP MARKETING

ever, and marketing might not be seen as a value-added

strategic function, but as one that wildly spends money

on frivolous activities—the classic Prisoner’s Dilemma.

While not easy, good marketing organizations are able to

balance the two very well. One other thing I would men-

tion is that, as a functional marketing leader, spending

either too much time in strategy or execution, risks you

being labeled as too strategic (can’t execute) or not stra-

tegic enough. A Zen-like balance and harmony on this

continuum is crucial. It is reminiscent of a classic story:

A student asked a Zen Master,‘If I work very hard,

how long will it take for me to realize Zen?’

The Master replied,

‘Ten years.’

The student replied,

“If I work very, very hard,

how long will it take for me to realize Zen?”

The Master replied,

“Twenty years.”

The student replied,

“If I work very, very, very hard,

how long will it take for me to realize Zen?”

The Master replied,

“Thirty years.”

The student replied,

“But I don’t understand.

Why does it take longer when I work harder?”

The Master replied,

“When you have one eye on the goal, you only have

one eye on the path.”

Too often in marketing we are obsessed with the goal, to the point

that we fail to understand that the path or the process we used to

reach the goal is equally, if not sometimes more, important.

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In summary, marketing is the only function within the office of

the CEO that can broadly lead an organization down the path of

growth and strategic insight. This function touches the whole or-

ganization, from product conception to the end of life. Because

of the scope of what marketing people do, this leadership does

not and cannot come from other areas, such as HR, finance, or

operations functions. The secret to successful marketing leader-

ship is to be grounded in the business, execute the six key roles,

and focus everything on growing the business and enabling the

sale force, channels, and partners to be successful at selling more

products. Because marketing is constantly changing, the mix of

capabilities and skills is changing as well. Marketing leaders

who stay abreast and adapt to these changes are more likely to

have a longer tenure in the C-Suite.

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SECRETS TO BUILDING A WORLD-CLASS BUSINESS THROUGH LEADERSHIP MARKETING

About Vince

Vince Ferraro is a general management executive and VP

of Global Strategy and Marketing for Kodak’s Consumer

Digital Group and Corporate Marketing. As the market-

ing leader for one of the most iconic, recognized brands

in the world, he is responsible for branding, advertising, communications,

PR, social media, Kodak.com, and the e-commerce store. He also provides

oversight and marketing leadership to Consumer Business, which includes

product categories such as digital and video cameras, scanners, picture

kiosks, and inkjet printers. He joined Kodak in November 2010 and also

served as Vice President of Global Marketing for Kodak’s Digital Printing

Solutions Group. He was previously Vice President of Global Marketing for

Hewlett-Packard’s LaserJet business unit, where he was responsible for de-

velopment and launch of some of the most successful and iconic technology

products in the world.

Mr. Ferraro has over 25 years of experience building, managing, and growing

a variety of lines of high technology hardware, consumables, and software

businesses both domestically and internationally. In previous roles, Ferraro

was VP of Marketing for HP’s Business and Imaging group and HP’s con-

sumer businesses, which included digital cameras, photo printers, scanners,

and DeskJet-, Photosmart-, and OfficeJet-branded products. He developed

HP’s first Windows- and Mac-compatible color inkjet printers—the PaintJet

and PaintWriter product lines—and helped establish HP’s wide-format plot-

ter business with the introduction of the 7600 Series product line.

Other executive and management positions that he has occupied include

international and regional senior roles in marketing, finance, and category

business management functions.

Mr. Ferraro is also a social media pioneer, having established HP’s most suc-

cessful executive blog, which was quoted in the book “Groundswell: Winning

in a World Transformed by Social Technologies” and was an Ad Age Power

150 blog. He is currently the author of the Tech Marketing Peitho blog (www.

techmarketingpeitho.com).

Mr. Ferraro has received a B.S. in business administration (cum laude) from

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IN IT TO WIN IT

San Diego State University and a M.B.A. from the W.P. Carey School of Busi-

ness at Arizona State University. He is also a graduate of Stanford Univer-

sity’s Strategic Marketing Management Program. Mr. Ferraro has consulted

with a variety of nonprofits, established businesses, and start-ups to in-

crease the effectiveness of their business strategies and marketing plans.

He sits on the North American Board of Advisors for the CMO Council and is

a domain expert in the Connect Springboard Program.

Mr. Ferraro is a frequent speaker at such groups as the Silicon Valley Venture

Capital Association, the CMO Council, Lyra, and various business networking

groups and other industry events. He also speaks on technology marketing

topics and how to utilize social media, such as LinkedIn, to its best advan-

tage, and help others find new employment opportunities and create and

deliver their own world-class personal brands.

Learn more about Vince at his website at: www.vincentferarro.com.