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“The CMO should be the Chief Experiment Officer” – Greg M. Thomas

“The CMO should be the Chief Experiment Officer” – Greg M. Thomas

January 15, 2016

The role of the CMO is a point of contentious debate. One measure of the health of the role is the average tenure of CMOs, which measures how long on average managers hold to role before being replaced by a successor. The tenure of the CMO is reported at 48 months in 2014, which is double the length reported for 2004. So things are improving. However, this 48-month average tenure is still short compared to the 80-month tenure of CEOs. So although CMOs are showing progress in their ability to evolve to meet expectations, there is still plenty of room for improvement.

The context of the business environment establishes a huge impact on the role of marketing. Currently the big shift in the context of business is placing a necessary emphasis on the dynamic sensing of the marketplace. It’s the influence of this major shift which is determining why the role of the CMO should be that of a Chief Experimentation Officer who aims to constantly try new ways of making an impact by using controlled experimentation, measuring the impact, and making agile management decisions to improve business performance along the way.

There is no doubt we are in a period of socio-cultural and technological revolution that far exceeds any period in our history on the planet. And this pace of change is accelerating. The connected world of transportation and communication has brought change through global demographic shifts. In much of the developed world changes in men’s and woman’s work is shifting to a more gender balanced pattern. The changes in race relations, experimental drug use, popular music, media fragmentation, and a general shift away from norms of earlier generations has a profound impact on establishing a heterogeneous and fluid marketplace.Screen Shot 2016-01-13 at 6.17.08 PM

When market change and technology change are both slow and steady, then markets are prone to a winner takes all scheme where the Efficiency Seeker producer that generates the greatest economies of scale and raises significant barriers to entry dominates the marketplace.

Once the cultural landscape starts to evolve faster the solutions that satisfied the majority of the status quo market no longer sufficiently satisfies the nuanced segments of the more dynamic market. This is where firms who are Cultural Adapters that identify and embrace the socio-cultural change in the market and follow with solutions based on customer intimacy are bound the thrive. Mangers that pay attention to the long tail and offer customized solutions, like in the area of Boll & Branch’s fair trade linens, Bulletproof coffee’s health focused coffee, Honest Company non-toxic baby goods are all adapters.

In an environment where the rate of market changes is low and technological change is high, the companies who are able to lead the technological development, and establish the prevailing standards will tend to win. These Technology Leaders may not necessarily be the pioneers of a technology. We have seen countless times where the technology pioneer does not gather the momentum to build market adoption for example: ballpoint pen, air conditioner, desktop computer, electric typewriter, instant camera, internal combustion engine, palm computer, voicemail, etc.

Today we simultaneously face great change in both technology and in markets. This provides a rapidly morphing and fluid marketplace where marketers need both to assess the current state and try to predict the ever changing trajectory. With a fluid state marketing is chasing a moving target. To best align organizational delivery of value one needs to continuously probe and readjust, and that is why firms that are Dynamics Sensors excel in this environment. They take a rapid cycle test-and-repeat approach with experimentation leading the way. Once a Dynamics Sensor oriented firm finds a sweet spot in terms of positioning, it needs to continuously monitor the changing context to growth hack its way to the next level of success.

For example, management might experiment and determine that the best time of day to send an email newsletter is on Tuesday afternoon at 3pm. However, once other firms realize this time works well the amount of inbox clutter on Tuesday at 3pm will change the customer’s responsiveness so another time needs to be identified as the new optimal response time. The approach that worked last year won’t work today, yet alone the approach that worked last month.

In a shifting environment, the survival of the fittest relies on experimentation and the Chief Marketing Officer needs to know how take the lead in this strategic approach. To make this work the CMO needs to go beyond taking a leadership stand on espousing the benefits of a test-and-learn environment. There is also a need to build competencies and bridge boundaries with other corporate functions. The CIO needs to be the “best friend” of the CMO in terms of fostering an and enabling environment. Information systems can greatly help or hinder a test and learn strategy. In some firm’s data is stuck in local department or geographic systems, and ideally data needs to be managed at the organizational level. Information systems need to be harmonized and integrated across departments to allow for rapid learning through experimentation. Ideally, tests that are performed regularly benefit from automation across data collection, data cleaning, and reporting. And integration of reports across multiple sources is important for building a comprehensive view of the customer and the market.

The CMO needs help from other departments too. The Human Resources department needs to be able to scout and attract the top talent in data science. The CFO needs to understand the concept of valuing strategic options and provide flexibility in the financial planning systems for pursing emerging opportunities. The COO needs to be able to be adaptive and respond to changes. Flexible operations and supply chains enable quick adaptation to changes in market needs. Using concepts like strategic postponement can help contain cost while building in responsiveness. The CMO, in taking on the role of Chief Experimental Officer, has a challenge to influence and align the organization in bringing this strategy to fruition. The information revolution is here and in Darwinian terms it’s the organization with the greatest ability to adapt that wins.

Screen Shot 2016-01-14 at 4.24.49 PMGreg Thomas is the founder of INOV8N, a global innovation consultancy. He is the co-author/editor of The Future of Branding, and has worked on 70+ projects with a number of Fortune 500 brands.

 

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