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Cartoonist Tom Fishburne captures the pains of digital transformation in a visceral way—and there are plenty of them.
For many of us, this cartoon is not far off from the truth. As individuals, we are anxious to adopt modern, digital practices to improve our lives and the lives of our customers. But our organizations’ legacy processes, rules, technologies, etc. make it feel like we’re trying to run in water. Or mud.
A recent article from eMarketer points to rigid internal structures as yet another barrier to many organizations’ digital transformation efforts. The article cites research from both Harvard Business Review and research firm IDG that finds organizational alignment to be the primary challenge for brands meeting their digital goals and objectives.
Research from TEKsystems concurs. Namely, “…there is a lot of friction between technology and business departments.”
Well, yes, that could be a problem.
As Deloitte points out in The digitally-fit organization, “…the definition of success is no longer linked primarily to efficiency, but to business agility. Organizations need to be able to seize opportunities in a rapidly changing business environment, while responding to the needs of their technology-empowered customers and acting quickly to successfully implement the digital strategy.”
By definition, rigid structures are unyielding, fixed, inflexible—the opposite of agile. No wonder we hear fairy tales of success from brands like Zappos and Valve that ditch internal hierarchy.
Organizations that want to tear down these silos and reduce this interdepartmental friction to improve the company’s agility should look to their CMOs to lead the way.
Defining “Digital Transformation”
But let’s back up a moment. The term “digital transformation” means many things to many people.
I agree with marketing strategist Scott Rhodes that “digital transformation” can be defined simply as organizational change. Done right, it includes a “methodical evolution of your vision, strategy, technology, operations and capabilities—all focused on delivering an exceptional experience that anticipates a customer’s unmet needs.”
Done wrong? Then we’re looking at situations like this:
While clearly fictional, Fishburne again nails the essence of what it can feel like to slog through a misguided digital transformation journey—and why many brands fail before they even get started.
Turn the Slog into Success
The solution is starting with an assessment of where you are today and where your business wants to be. Establish a common vision, then bring people together and enable them to make decisions.
Case in point: Zappos’ has implemented what they call ‘holacracy,’ eliminating hierarchy in favor of more self-directed work. Implementation lead John Bunch described the scenario as follows:
“I guess what we’re trying to do is structure our company more like cities are structured. Research shows that every time the size of a city doubles, productivity per resident goes up by 15%. But when companies double in size, actually the exact opposite thing happens, productivity per employee goes down. And part of the reason why we think that is that in cities, you are self-organized, you’re self-directed. And you have a certain level of freedom and autonomy to do what you think is right.”
Zappos realized there was an inherent problem with the way companies were structured as opposed to cities. Their vision was to operate more like a successful city—and they enabled their employees to make it happen.
- Flexible organizational structure with clear roles and responsibilities
- New meeting formats geared toward action
- More autonomy to teams and individuals to cut through bureaucracy to solve problems
- A unique decision making process to continuously evolve the brand’s structure
Going beyond the digital transformation celebrities like Zappos, brands like Autodesk, Vodafone, and Pitney Bowes have also broken the traditional structure mold, creating their own versions of cross-functional teams.
According to eMarketer, marketing design software company Autodesk uses what they call work pods, consisting of groups of people from across the company, to more efficiently release and update products. Siara Nazir, head of digital marketing at Autodesk, said this approach helps them to launch 20 to 25 projects in a period that previously accommodated only two or three.
Vodafone has reorganized internally-focused teams to be structured around the customer journey and to “be more responsive to what the market and our customer are telling us,” explained Milan Jain, principal digital marketing manager at the company.
Pitney Bowes created a cross-functioning team of executives, including leaders from marketing, finance and technology, to come together weekly. Everyone comes prepared to attack a different challenge each week—then cascade new thinking on these challenges throughout their organizations. CMO Bill Borelle emphasizes: “That’s the cultural leg that works, infiltrating other [organizational] levels after these meetings happen.”
Why the CMO?
This sounds pretty huge. Unwieldy, even. In fact, many leaders are stymied by the hugeness of digital transformation and knowing where to begin (it’s easy to feel impossibility around moving from a workplace that blocks Google Drive to a place of true agility).
The takeaway here is that your approach to transforming your organization into a digitally enabled brand doesn’t have to be a fear-inducing leap like Zappos’. But it does require thinking a bit differently at the highest levels of the organization to bring people together and enable them to make sound decisions.
And the CMO is the logical person to take the reins on this one. Why? He or she is likely already positioned to do so.
The modern CMO is more than a communications professional. As Mohanbir Sawhney and Robert C Wolcott explain on The Marketing Journal, the “heavyweight CMO” uses his or her skillset to drive a variety of business initiatives that move the business forward, serving in key functions like:
- Insights Generator, generating insights that can be converted into business value and competitive advantage;
- Growth Catalyzer, bringing together business leaders to drive new growth opportunities;
- Nurturer of [Marketing] Talent, partnering with HR in the search for and development of talent;
- Protector of the Corporate Brand, defining and articulating the corporate brand story in a way that makes a highly differentiated, emotional connection with customers;
- Chief Communicator, Engaging Stakeholders, driving an integrated communications program that includes all the possibilities of digital and social media and to build customer and stakeholder engagement beyond traditional efforts;
- Steward of the Customer Experience, leading activities that affect the customer experience and enabling the entire company to deliver the desired customer experience.
As Sawhney and Wolcott put it, “CMOs are being called upon not only to build brands and create compelling multi-channel communication strategies, but also to harness customer analytics, create intersections between physical and digital and help drive sustainable growth.”
“CMOs are being called upon not only to build brands and create compelling multi-channel communication strategies, but also to harness customer analytics, create intersections between physical and digital and help drive sustainable growth.”
The heavyweight CMO is already working to steward the vision for the brand and the customer experience. He or she is already bringing together employees and other stakeholders at all levels of the organization to drive growth opportunities and execute on customer experience. He or she is already generating the insights necessary to help others make good decisions.
A heavyweight CMO already has the requisite skills and experience to spearhead aligning the structure of the brand with the business’ growth objectives.
Of course, others need to be involved in dissolving the silos that inhibit digital evolution—namely the CIO. But digital transformation requires that we change mindsets, not just technology.
Whatever you do, don’t leave it to the intern.
Still having trouble getting started? We can help. Get in touch.
The Holy Grail of modern marketing is delivering the right message at the right time for the right audience. And it may be more attainable than ever when you approach it through the lens of digital ecosystem marketing.
Phil Kotler and Christian Sarkar explain in their latest Marketing Journal article that ecosystem marketing is about understanding your market as a network of participants and being able to influence the right actors at the right time.
Ecosystem marketing is not a new framework. What is new is being able to create rich, actionable ecosystem maps from the wealth of digital data that is already at our fingertips.
Modern Milkshake Marketing
Let’s take a look at this digital ecosystem approach by contrasting it to Clay Christensen’s widely respected “milkshake marketing” research.
McDonald’s wanted to sell more milkshakes. Despite continuous product improvement, the burger brand could not figure out how to entice customers to consume more of the frozen beverages. Sales remained level.
The problem was that McDonald’s was focused on the product—not the job customers would hire the milkshake to complete. As it turns out, McDonald’s milkshakes were not just competing with other milkshakes from Burger King and Wendy’s. They were competing in a wider market of bananas, bagels, donuts—even Snickers bars—to fill the job of spicing up an otherwise boring commute to work while keeping hunger at bay for the remainder of the morning.
If you haven’t seen it before, watch Christensen explain the research himself. It’s well worth the seven minutes:
With this knowledge of the job customers were trying to complete and the wider market they were trying to complete it in, McDonald’s was able to change their strategy and messaging to improve milkshake consumption.
The problem is that uncovering this invaluable insight required someone to stand at McDonald’s for 18 hours and take detailed notes on each milkshake customer:
- What time of day did they purchase a milkshake?
- What were they wearing when they bought a milkshake?
- Were they alone or with other people?
- Did they buy other food with the milkshake?
- Did they drink it in the restaurant or take it to their car and leave?
After determining that about half of milkshake customers came alone, before 8:30 am, wearing work attire, and left the restaurant with milkshake in hand, the team had to do more in-person research, asking milkshake buyers WHY they had decided on a milkshake at that point in time.
Arduous. Time-consuming. Resource-intensive.
But mapping digital ecosystems is readily accessible.
Applying Business Ecosystem Theory to the Web
We all use the internet to seek out solutions to our problems just about every day. We search, and then we visit sites that we think might provide useful resources. Sometimes we end up buying something online (probably not a milkshake).
All of this searching and visiting and buying leaves a digital trail of breadcrumbs that’s available for marketers to follow and learn from. Using a variety of web crawling technologies and algorithms, we can collect and organize these breadcrumbs into maps of the digital ecosystems our brand are operating in. We can understand and visualize the answers to questions like:
- What are people that buy our products are services searching for online?
- Where do they end up online after searching?
- How many clicks does it take them to get there?
- Do they end up making a purchase?
The ecosystem maps generated from this data help us to understand the jobs our customers are trying to complete with our products or services. They also give us a deep understanding of the conversations that are occurring about these challenges or jobs, where they are occurring, and the language people use to describe these challenges.
For example, a high end retail brand may find that likely customers are searching with terms like “professional looks to stand out without looking flashy” and that they often end up making purchases on a single competitor’s website. The solution could be creating highly visible wardrobe suggestions and outfits tailored to this need and marketing them with related language.
“Brands that have this information at their fingertips through a digital ecosystem marketing model have the required insight to do what McDonald’s did: find their bananas and bagels to broaden their market by about seven times the scale.”
Of course, this is an obvious assumption. The brilliance of collecting and visualizing the actual data is that the results may be completely different than what you expect them to be.
Brands that have this information at their fingertips through a digital ecosystem marketing model have the required insight to do what McDonald’s did: find their bananas and bagels to broaden their market by about seven times the scale. And understanding the language in which customers talk about their challenges or jobs allows brands to cut through the maze of paid and organic search terms to find messaging and content that is genuinely driving customers to engage.
Right message. Right time. Right (wider?) audience.
On the Cutting Edge
This digital version of ecosystem marketing is brand spanking new. Results may still feel a little bit magical. The agencies that can accurately compile digital maps today are pioneering in the space, continuing to optimize both their technologies and their interpretations of the resulting maps.
We are lucky to have pioneer Christian Sarkar (and author of the Marketing Journal article) on the Consentric Marketing team, offering his unique expertise to our clients.
Interested in finding out what insights your digital ecosystem maps might uncover? Get in touch today.