The innovation dance floor is getting awfully crowded with a lot of eager participants. CIOs want to re-establish their traditional role of custodian of technology driving innovation. CMOs wants to be at the forefront of using innovation to change the customer experience and outreach. Data scientists are using the new analytics tools and want to participate in innovation strategy. And as I blogged recently, an IBM study found even chief purchasing officers are making a bid to join the innovation party. Unfortunately, they’re all joining the product managers, who are historically in a slow dance; so not only is the dance floor getting more crowded, but there are also a lot of different beats that they’re dancing to.
Each of these positions has its own point of view, its own agenda, and sees innovation differently. On the plus side, this provides for a rich mix of opportunity. But on the downside, few innovative ideas have come out of committees.
The IBM study indicates that CPOs are attempting to become more strategic and influential and they believe they are more critical to the enterprise. So by necessity, they have to better align with the corporate strategy and therefore want to participate in developing strategy.
I think it opens up even bigger questions:
Particularly in the area of services, which are an important ingredient to a change strategy and require deep understanding of the business and how to shape or manipulate the components to create a differentiated position as an advantage, CPOs may struggle as the champions of change.
My view is that CPOs are not the right people to influence innovation. Their idea of innovation is do it at half the price rather than doing something different. A data scientist, for example, can get at a certain kind of innovation because they bring a fresh, different capability to the table. I don’t see purchasing bringing something fresh and different.
So this poses some very significant questions to the enterprise:
With purchasing and other departments trying to crowd onto the innovation dance floor, service providers wanting to bring new innovative ideas or capabilities will have to navigate a gauntlet of powerful stakeholder groups. It certainly makes for an intriguing tango.
Photo credit: Piotr Pazola
Sigmund Freud once said, “Most people do not really want freedom, because freedom involves responsibility, and most people are frightened of responsibility.” Had he added a phrase about fear of business ownership, the father of psychoanalysis could easily have been talking about most Chief Marketing Officers (CMO) in the current world of digital transformation. The freedom given by digital disruption to transform marketing function may come with a frightening responsibility of owning a P&L.
Today’s CMOs are expected to leverage disruptive technologies, and thus are receiving more technology funding than their IT counterparts. However, many CEOs will push their CMOs to own P&L if they need that funding for digital initiatives.
While most marketers dread the prospect of P&L ownership, the reality is that digital transformation has the power to enable them to assume a more strategic and central leadership role. And mobility, analytics, social platforms, and cloud services – many of which are available outside the control of corporate IT – can give them the needed ammunition to transform marketing into a business builder and create real impact than being a strategic overhead.
Those marketers looking forward to the challenge realize that unlike the traditional models, the rapid digital transformation of the marketing function enables the CMO’s office to influence and generate revenue, as well as run operations efficiently. Digital transformation provides significantly more engaging, flexible, and agile platforms to attract, retain, and grow consumers than traditional models. They allow “fail fast” with manageable cost repercussions. These new mechanisms give marketers direct, quicker, and clearer access to the end-consumer. Marketers now have the technology to run data-driven real time analysis of consumer buying behaviour and enhance their strategies accordingly.
However, to make this a reality, marketers need to work more closely with different departments within their organization, and develop perspectives on the various business units. While their lack of knowhow of organizational operations will be a recipe for disaster, increasing use of collaboration platforms and process digitization can help. Marketers can now communicate and collaborate with their counterparts from other units more effectively in a shorter time span leveraging digital services.
It’s always challenging to transform a cost center to own a P&L. In marketing’s case, it’s not only about revenue attribution, but also:
P&L ownership also impacts the way marketers are perceived in their organizations, as well as senior business leaders’ attitude toward them. Marketers will have to undertake a lot of internal selling of the idea. And a lot of organizational machinery will need to be oiled and transformed to make the marketing department own a P&L.
Most client conversations indicate this is still a utopia. However, some executives do believe it’s high time that the digital transformation makes marketing more accountable. They consider the CMO to be everything related to a customer (Chief Experience Officer, Chief Customer Officer, etc.) and believe that marketers now have the right technology and tools to create real business impact.
The onus is on the CMOs, and the opportunity is vast. However, they need to get out of their mindset as a business support function, where they are assisting businesses to leverage digital services much like an external consultant, and instead take center stage. But it’s not going to be easy.
Sigmund Freud today would probably have said “CMOs who want to enjoy the freedom bestowed by digital transformation must not scare away from the responsibility of the P&L.”