how to be a marketing leader
DESCRIPTION
Delivered at a national Chief Marketing Officers conference last November, this presentation offers unique insights into how to increase the impact and status of marketing in any organization.TRANSCRIPT
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How to be a marketing leader in the
new economy –
Learn the 5 secrets of value creation
2
In a nutshell …
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“ Marketing is the essential, ubiquitous task of management…
…the purpose of which is to create a customer…
…by understanding and meeting basic
societal needs.” - Peter Drucker
3
I The Great Reckoning
II The identity-value creation connection
III The science of identity
IV Secrets of value creation
V Marketing leadership
The story in brief
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I The Great Reckoning(puts the spotlight on
value creation)
5
“The crisis was the result of a perfect storm – everything that could go wrong did.” Steve Forbes
“A series of life-threatening problems within many of the world's great financial institutions was unveiled.” Warren Buffett
“In this reset economy, we have an opportunity to grow GE over the long term…in ways that drive customer productivity.” Jeff Immelt
The Great Reckoning
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An economic “reset” = a marketing reset
The Great Reckoning
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II The identity-value creation connection
(is the “reset” key for marketers)
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“Identity” is a company’s …
A.Name + logo
B.Tagline
C.Design system
D.Brand
E.All of the above
F.None of the above
The identity-value creation connection
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9
Identity, the human phenomenon
The identity-value creation connection
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Identity, the organizational phenomenon
The identity-value creation connection
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11
What is “identity?”
The unique set of characteristics that reveal one’s value-creating potential
The identity-value creation connection
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12
Dow Chemical’s value creation challenge:
• Slow growth for many years (3 – 4%)
• Solid attributes… quality, trustworthy, reliable, committed
• No answer to the question: What makes Dow, Dow?
The identity-value creation connection
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13
Five institutional capacities distinguished Dow:
• A genius for “life-changing” customer relationships
• A passion for scale
• A talent for “whole system” thinking and action
• An obsession with improvement
• A bias toward the essentials of life
The identity-value creation connection
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Dow’s consumer impact highlighted the company’s focus on “the essentials of life.”
Market %
Food 21.5%Household & Personal Care 14.9%
Building Maintenance & Construction 10.9%Transportation 10.2%
Home Care & Improvement 7.9%Paper & Publishing 5.9%
Furniture & Furnishings 5.6%Electronics & Entertainment 5.4%
Health & Medicine 3.2%Water Purification & Waste Management 2.9%
Miscellaneous 2.5%Heavy Construction 0.2%
Oil & Gas 8.9%
100.0%
The identity-value creation connection
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The identity-value creation connection
15Confidential Information
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1999 • $18+ billion sales • For years, only GDP growth (3 – 4%)
2008 • $50+ billion sales • Since1999: 13% annual growth rate
The identity-value creation connection
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Identity, the marketing phenomenon
The identity-value creation connection
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III The Science of Identity(emerges)
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The Identity Impact Survey (Summer/Fall 2009)
• One-year effort
• 1,941 respondents
• 5 companies (21 candidates)
$50MM to $8 billionGlobal and domesticPublic and privateB2B and consumer
• Sophisticated psychometrics
The Science (emerges)
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Organizational and Individual Identity Strength have a major impact on employee engagement and employees’ resultant commitment to the brand (r = .686)
What’s the payoff?
Identity strength is a leading indicator of a company’s value-creating capacity …
… and holds crucial business implications
Constrained value creation •Handcuffed financial performance•Inefficient strategy deployment•Limited innovation •Overpromise, under-deliver on brand•Low-traction culture•Lower investment value
High value creation •Superior financial performance•Effective strategy deployment•Efficient innovation•Strong brand•Responsive culture•High investment value
Low value creation•Sub-par financial performance•Ineffective strategy deployment•Depleted innovation•No meaningful brand•Dysfunctional culture•Low investment value
Pent-up value creation•Limited financial performance•Inefficient strategy deployment •Limited innovation•Brand confusion•Diffuse culture•Lower investment value
IV Secrets of value creation(and the marketing action
each implies)
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1. Value is the proprietary contribution a company is capable of making …
• In the marketplace
• In the world
Secrets of Value Creation
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1. Value is the proprietary contribution a company is capable of making …
Marketing action:
Clarify and invest in your company’s unique, value-creating capacities
Secrets of Value Creation
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2. Identity is the source of value creation
• Provides a center of gravity for all decisions and actions • Yields a sustainable competitive advantage, by leveraging unique, institutional capacities
• Leads to developing the “right” products for the right reasons
• Fosters “efficient innovation”
• Inspires a timeless brand
Secrets of Value Creation
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2. Identity is the source of value creation
Marketing action:
Crack the code on – and “market” – the identity of your company.
Secrets of Value Creation
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Secrets of Value Creation
3. Value creation drives wealth creation
Employees (create value)
Customers (purchase value)
Investors(finance value)
Suppliers Communities
Government Unions
Direct
End users
Society
Analysts
Portfolio managers
Shareholders
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3. Value creation precedes wealth creation
Marketing action:
Align the interests of all stakeholders to the company’s advantage.
Secrets of Value Creation
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4. Value is maximized when it is created onfour levels, simultaneously. Value for …
Individuals – products and services that spur creativity and productivity
Businesses – solutions that improve customers’ performance
The industry – innovations that increase the overall impact of that industry on the economy
Society – changes that meet fundamental needs, which improve people’s lives
Secrets of Value Creation
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4. Value is maximized when it is created on 4 levels, simultaneously.
Marketing action:
Market comprehensively – answer individual, business, industry, and societal needs, simultaneously.
Secrets of Value Creation
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5. All value flows upstream. • No matter where a company is on the value chain, success depends on its contribution to the well-being of end-users
• Developing institutional roots is the key – Building a relationship with the society or culture of which the company is necessarily a part.
Secrets of Value Creation
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5. All value flows upstream.
Marketing action:
Market the “institution” not just the business – become a societal brand
Secrets of Value Creation
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V Marketing leadership (in the new economy)
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1. Clarify and invest in your company’s unique, value-creating capacities
2. Crack the code on – and “market” – the identity of your company
3. Align the interests of all stakeholders to the company’s advantage
4. Market comprehensively – Answer individual, business, industry, and societal needs
5. Market the “institution” not just the business – Become a societal brand
Marketing leadership in the new economy
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Thank you!
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The problem: Wealth creation before value creation
The solution: Value creation before wealth creation
Who: Marketing
Why: Guardians of value creation
How? …
Marketing leadership in the new economy
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From survival of the fittest to survival of the finest
• Purpose guides profit• Contribution dictates reward Everyone may make money, but the "finest" institutions will emerge as our new economic leaders …
…Companies that not only stay financially solvent, but who cultivate strong value-creating cores.
The Great Reckoning
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