Yesterday I read an article about the CMO transitioning to a CDO by Ray. It is only one in a series of articles about this topic. In my opinion this is not showing the complete story.
In simple words: many people believe that digital has created the need to make (analog) CMOs transition to (digital) CDOs. As running (digital) promotions has a strong technology impact, the CIO is also put into the play as she/he is the only one to really understand big data & co.
This jumps too short. Let´s take a step back and clarify the different disciplines involved. In “old” times, it was marketing only. They defined the products to be built, they ran the promotions and built the brand. Marketing was perceived as an overarching philosophy about understanding and serving customer needs. R&D was the department to build products based on marketing requirements. “Our market research has shown that customers want their washing powder come as little red balls, so you guys build our washing powder as little red balls.”
This has changed due to the digital push. The complexity of products has exploded. Building the right product solutions has become an iterative and design resp. technology driven process. Now a quote like the one above would look like this: “In intense individual customer interviews we have found that we able to build the big green boxes that customers love to use as their washing powder.”
At the same time branding is still playing a major role as it deals with the intangible assets of products (that are by definition neither digital nor analog). There is a need for all three areas. Now you could discuss who should “own” the customer. Or one could agree on applying an overarching philosophy (all have the customer in mind with everything they do).
So, where does the CDO come in? Is this the person to ensure that a “digital” philosophy is being applied? This would require to address ALL functions. Today´s discussions around CDOs seem to limit its role to tactical marketing (aka selling products digitally). In my opinion, this jumps far too short and does harm to the standing of a CDO in a company.
So, either the CDOs are up to the real challenge or they leave the ground to product managers, marketers and brand specialists.
In today´s lecture this quote was made by the finance professor @HECParis. Again, there is this perception that there is a kind of “solid” world ruled by careful and risk averse people. On the other side stand the “dreamers” that don’t see the upcoming dark clouds.
We have gone through a case study of a very profitable company in a heavy growth situation running out of cash due to the increase of working capital. The founder and his wife were still owning >50% of their company but they had to look for either for new shareholders or to borrow more money. The conclusion was that for the founder it would be best to buy himself some time by borrowing money and to use the won time to sell his company.
Let´s imagine this founder was a product driven person (actually his company was in the software business). Let´s further imagine that all his fantasy doesn’t really help his company in the light of the upcoming cash bottleneck. A fantasy about great new products finding many users who are willing to pay. But the original product visionary is busy optimizing his cash cycle. He can´t build great products. Would this be the moment to hire a Product Manager?
In other words: does the CEO have to be careful by nature and the Product Manager is the optimist by definition? How do they come to conclusions? What is best for the company?
The only way to avoid this kind of situation is to plan very far ahead. Observe carefully early signs of issues and react appropriately. And don’t listen too much to the optimists (aka the Product Managers ) in your company…
In a great presentation by Jean-Noel Kapferer yesterday @HECParis, I was really inspired to rethink my stereotypes about branding.
First of all it is important to note that “a brand is much more than just a name on a product“. Brands also go far beyond driving sales. I don´t know why all the Marketing people I have talked to during my career were not able to make this point to me yet.
If more people recommend a brand than those who are actually purchasing the product, this is a clear signal of a strong brand. The opposite is that some companies have to pay money to be present in films. Jean-Noel calls them “desperate”. There is some magic in putting a crocodile on a shirt despite the fact that this animal is commonly not very much liked.
Second, social media activity is a very good indicator of the value of a brand (“If your brand is not talked about on the web you are not a brand”). Until yesterday, I have thought that counting followers on Facebook is just a way for non-digital Marketers to measure their awareness success (without understanding anything). Now I see that active user participation around brand makes a big difference.
Third, brands can only be authentic if they are considered strategic. It is NOT about driving sales, but much more about building products / companies with a purpose. This purpose lives beyond sales and awareness . This purpose is something that makes our world a bit more worth living. Without leaving “a dent in the universe” there is no real purpose. Product Management is such an exciting place to be in as it helps to build brands. Brands that exist beyond the Marketing department
Working in a senior role as Product Manager is a continuous translation exercise between functional experts. “Show me the revenue” was a quote of one of our @HECParis professors during the last couple of days. And he made jokes about the reactions of the entrepreneurs being asked this unpleasant question.
The big question is: why does it make Product Managers feel uncomfortable? Is it because you run out of explanations? Is it because it is frustrating to leave one´s visionary level and having to go back to much more “trivial” discussions? Is it the mere incompetence of the Design Thinker?
Be it as it is: there is the need to bridge that gap. Companies need senior people who are willing to try hard to make the translation between (absolutely legitimate) business questions and (absolutely critical for survival) radical design thinking.
If this translation doesn’t happen on the right level, two things might happen. Either the Product Manager chases feature after feature without achieving break through and without taking the company to the next (revenue) level or the company dies in beauty because everyone there is living in a dream world.
The ideal situation would be someone in the middle between both worlds having the big picture and being able to translate. That is why we should see many more careers transitioning from product to general management and vice versa. I am asking myself why this is still so seldom. Has it to do with the reputation of product management? Or is it a simple misunderstanding what Product Managers are supposed to do?
Today I have read this article: “The appointment of a chief digital officer is a bad idea“. It has been published on Marketing Week. Obviously, it collects arguments for the fact that a chief digital officer is something the world doesn’t really need. The author @AshleyFriedlein ends with pretty polemically comparing this discussion to a discussion around the need of a “chief electricity officer” back in 1900.
Actually, this came at the moment where I anyway wanted to blog about a topic that is close to the same issue. What is the role of marketing? How should the interface between product management and marketing be defined?
During my last module @HECParis, we also learned about marketing. For many people marketing is simply the operational part (remember the four P’s: product, price, promotion & placement?). We got presented the strategic view on marketing. Marketing as a philosophy. “Marketing is too important to be left with the marketing department.” (David Packard). The idea of completely focusing all employees of a company on their customers. This is pretty close to Ashley´s article. Ashely suggests that hiring a chief digital officer might be a bad idea because all departments need to think “digital” anyway. With the same logic, one could argue that it wouldn´t make sense to hire a chief marketing officer. Everyone in a company needs to think about marketing anyway.
While I understand this argument, there is an insight I would like to share with my readers: products are becoming increasingly digital and therefore technology driven. Technology can address user needs in a way that has not been seen before. @HECParis we have been lectured about the so-called “R&D push” that marketing should also incorporate in its thinking. One could say “today´s solutions to user needs have become too complex to be left to marketing people“.
At the end of the day, this whole discussion around C-Level titles might be misleading. Let´s be really open to new ways of managing companies but let´s not ignore the fact that digital changes business much more fundamentally than electricity might have ever done.