“The key to good decision making is not knowledge. It is understanding. We are swimming in the former. We are desperately lacking in the latter.”
– Malcolm Gladwell (Blink: The Power of Thinking Without Thinking)
CMO’s are facing one of the most difficult decision making climates in generations. While some think there is an analogy to the book the Perfect Storm, a sequence of powerful forces converging to create a momentary disastrous environment. I posit that this is the new reality in marketing decision making – a highly fluid, highly reactive, highly charged atmosphere.
This isn’t a bad thing, challenges can drive elevation creativity, performance and results. In surveying the challenges for CMO’s in 2010 for a recent presentation, it became clear that creating the space to elevate performance in this market is going to be very difficult for four reasons:
- No Gravity
- Constant Conflict
- Tactical Engagement
- Managing by Measurement
One of my early mentors had a string of unique, folksy, down home analogies that he applied to the dynamically changing telecommunications environment of the 1990s. I still remember many of these and chuckle at their continued usefulness. The one I have been drawn lately is that you
“You can’t have to check for gravity every time you wake up”
In decision-making terms this means that there have to be constants you can assume to your make predictions, forecasts and plans fit the business environment. However in a market decimated by financial uncertainties, rapidly evolving due to technology and product substation and where the competitive playing field has been leveled through consumer adoption of search and social media it is hard to point to any true laws that can govern decision-making.
Having to check for gravity everyday creates strategic decision making chaos. Long Term decisions are tempered by greater than normal uncertainty and become considerably more conservative – less spending, longer trials, fewer risks – or more instinctive and reminiscent of Rock Paper Scissors.
There is also a downstream affect (to not only mix a metaphor, but to completely contradict a metaphor) which leads to institutional conflict. The lack of resources, tied to the demand for new investment with downward financial pressures is the classic environment for marketing conflict. There are excellent article out there describing these challenges such as Five Marketing Battles that make No Sense. But consider the battles that the CMO has to endure everyday.
- Online vs. Traditional marketing
- Search vs. Display advertising
- Outbound vs. Inbound
- Advertising vs. Direct Marketing
- TV vs. Itself
- Marketing vs. IT
- Marketing vs. Finance
- Marketing vs. Sales
- Targeting vs. Privacy
- oh yeah – the Competition & Googlization
Budget battles can be a good thing – focusing the organization, all these battles lead combined with the dynamic nature of the marketplace today can lead to a tactical focus, rather than strategic. When the CMO has to dedicate time to Cohesive Communication and Getting Along then they are getting into the weeds and being distracted by all the new ways to reach consumers – what should the budget be for display ads on mobile social media sites? The CMO has to elevate the discussion, rather than try to answer potential un-answerables.
I think one challenge in a world swimming in data is that quantitative decision-making can get in the way of understanding. In our Biggest Brands Can No Longer be Managed By Nerds Tom Hinkes argues that the pendulum has swung to far in the Brand Marketing Space.
As a contrarian by nature, I would argue that is not true. But that we are only managing what we can easily measure. We have high level KPI’s such as Revenue, ROI, Acquisition, Loyalty, Share of Market or Customer Satisfaction. At one time these useful indicators of where the business was going. I used to do Share of Voice vs. Share of Market and customer profitability analysis once, maybe twice a year to help steer our $100MM advertising budget or our network investment.
Now, with the detailed analytics available through the web we are awash in data of the moment. In Data, Data Everywhere the Economist has done a great job of highlighting the incredible opportunity arising from having detailed data, but also the risks of it.
For the CMO the biggest risk can be starting to only manage what you can measure – thus becoming more and more focused on tactical incremental impacts. The real opportunity from all this data is to re-think the strategic / big picture assumptions.
These questions such as:
- How do you measure customer centric success in a channel driven organization?
- How do you shift the focus of KPIs from KEY to INDICATOR – to ensure investment in long term strategies
- How do you measure the interaction between investments – marketing doesn’t happen in a vacuum.
- How do you take advantage of the changing marketplace rather than being a victim?
- What are defensible competitive advantages vs. temporary marketing innovations
Okay – this post has posed too many questions and challenges and I should give some relevant ideas that can be helpful. Clearly I don’t know have the answers to all these questions. But I think there are some places to start.
- Create Gravity: With Data from across the organization it is possible to have a marketing decision making platform that provides enough pillars to make faster, more accurate decisions.
- Fight Conflict with Information: With an Enterprise approach to marketing data, eliminate the arguing about facts part of conflict. When everybody has the same data they can influence and elevate each other. Make sure competitors and the Marketplace are the number 1 & 2 conflicts in the organization.
- Strategic Engagement: Once there is a more level decision making playing field, there is more room for strategic decision making.
- Measure What Should Be Managed: Spend analytical efforts creating the KEY performance INDICATORS of GREATNESS, not just reporting on what can be measured.
I view Teradata’s Integrated Web Intelligence solution as a part of this puzzle. One quote I heard on a call with a customer was “Now I can get my web data to the thousands of EDW users I have – not just the handful that look at Google.” In a customer workshop we spent hours teasing out the detailed data needed to look at channel attribution – something not possible with a lot of data silos. It is not a panacea for everything that challenges the CMO today, but it is a place to look for eliminating some of these problems.
If today’s marketing organization is going to shift from knowledge to understanding, we need more tools like Teradata’s IWI.
