Bernie Jaworski is the Drucker Chair in Management and the Liberal Arts, which is named in honor of Peter Drucker, the founder of modern management and the namesake of the Drucker School. The professorship is awarded to an internationally recognized scholar who carries on the Drucker legacy of tempering sound business practices with a commitment to social responsibility. Jaworski’s interests span a wide range of disciplines and industries. We asked him to talk about the biggest challenges facing marketing today. This is the first part of a two-part interview series. This is Part 2 of a two-part interview series. See Part 1 >>
Thanks for this second meeting, Bernie. We were about to get to the 5th challenge for marketers – competing globally. What are your thoughts? How does global competition raise the bar for marketers?
It raises the bar for everyone. The word “global” has such cachet these days, but the issue is quite complicated – and touches everything, from marketing to strategy. Let’s look at the way we commonly view global competition these days – that is how does a Nestle thrive in an emerging market? Of course, every country is different. China and India have their own set of challenges. A country like Vietnam or Burma requires a totally different lens. What skills do global marketers have to have to understand the local needs in local markets? What is the threshold for experimentation, for learning? How do regional and global management cultures work together?
And then there’s the reverse – how does a Vietnamese company, for example, go after the US market? What do emerging enterprises need to compete globally?
The more challenging way to frame this issue is to ask, “in a flat world, where technology can be leap-frogged, how do firms develop competitive advantage in a way that lets them move forward?” Global dynamics affect everyone everywhere, no matter the size of the business – whether it’s GE or the local BBQ shop down the street.
The BBQ joint on the corner?
Sure, the supply chain, the spices, the machinery – all impacted by globalization; there’s even competition from the “smoked meats” available at Costco.
So even local businesses are vulnerable and must pay attention.
What about globalization and the impact on NGOs and institutions?
That’s more complex. So how does the World Bank compete withe the Chinese Development Bank? How do NGOs execute across different countries while staying true to their mission? How do they work with the private sector? With different political systems?
How do they manage competition between ecosystems? The marketers job becomes far more difficult now.
Peter Drucker said that business performance comes first – it is the aim of the enterprise and the reason for its existence. But he also says that if there is no functioning enterprise, there will be no business performance. For Drucker the same held true if the worker and work are mismanaged. For Drucker there are three major jobs of management: managing a business, managing managers, and managing work and worker. How does that play out globally? The global marketing executive has those three jobs across the world.
Drucker was both a visionary and a prophet when he said:
Economic performance that is being achieved by mismanaging managers is illusory and actually destructive of capital. Economic performance that is being achieved by mismanaging work and worker is equally an illusion. It will not only raise costs to the point where the enterprise ceases to be competitive; it will, by creating class hatred and class warfare, end by making it impossible for the enterprise to operate at all.
Another challenge: how do you balance radical innovation with incremental innovation?
I’m going to preach Peter Drucker again, because it goes back to what he said in The Practice of Management in 1954. Managers have to manage in two time periods: the future and the present.
Drucker would say that managers should spend 15-20% of their time thinking and working on the future. How does a marketing executive do that? Not in most companies. Short-term pressure drives everything. The result is that the future is an after-thought. We spend perhaps 1% of our time on it. Occasionally, a manager may look up and realize that if we don’t change this now, in 5 years, we will miss the boat. And then we put our heads down again.
But it can be done. And it can be done rather simply.
Finally, and not least, the challenge of organic growth. How do companies grow organically?
That’s a question at the top of every CEO agenda.
In his book, The Rise and Fall of American Growth, Robert Gordon argues that growth is over, that we’ve had our run. He does not share the view of the “techno-optimists” – that we are on the cusp of of another explosion of history-making growth. I disagree with some of his insights, but there is no escaping the factors he cites as causing the decline in productivity: rising inequality, an inadequate education system, demographics, and debt.
The traditional marketing thinking says that if we pursue the right segmentation strategy, differentiate our products, and take care of the 4Ps, then growth happens. Unfortunately, this is not the case. Nobody has a playbook, a methodology for growth. Where’s the I-formation for growth?
The litmus test for every CEO is growth. We know how to smooth out the supply side, but the demand side is still unpredictable. The CMO must help the CEO with the challenge.
How do we grow our existing business? How do we expand our existing business in new geographies? And how do we introduce new products that grow the company?
That is the subject of the book Bob Lurie (EVP, Eastman Chemicals) and I are working on. Stay tuned.
INTERVIEW by Christian Sarkar