I continued to explore my theme on the challenges facing the ‘2020 CMO’ at our Cambridge conference held at the Cambridge Judge Business School - a fitting venue for stretching the mind. This home of executive education is named after founding benefactor, our late Past Master Sir Paul Judge, and its mission is to lead the debate on creating innovation, impact and leadership in marketing. The rest of this this blog consists of a summary of the sessions with some further links to relevant material including transcripts of the talks and copies of some of the speakers’ slide decks.
For this conference, the Worshipful Company of Marketors, supported by the Cambridge Judge Business School and Fujitsu Limited, put together a team of leading academics, technologists and marketing practitioners to examine the possibilities generated by advances in technology and the opportunities and threats they present for the profession of marketing. This was a unique opportunity to hear about the future of marketing from some of the people who are already helping to shape it. The conference was attended by over 80 delegates from the Marketors, other Livery Companies, students from Judge and other business schools, members of the Chartered Institute of Marketing, and a cross section of business leaders and marketing professionals.
Shasha Liu and Jaideep Prabhu from Cambridge Judge Business School teach a range of Executive Education marketing programmes. For more information view this interactive brochure here.
Cambridge Judge Business School - Cambridge, 7th September 2018
Thinking Digitally in Not Enough
The introduction to the Conference was given by Richard Christou, the Master of the Worshipful Company of Marketors. Richard has spent over forty years in the ICT industry. He retired from Fujitsu Limited in May 2012, but still acts as Corporate Adviser. Previous appointments with Fujitsu include President of the Global Business Group, managing all of Fujitsu’s IT operations outside of Japan ($12bn revenue and 75,000 employees). Given his background, he has a great interest in the relationship between the CMO and the CIO. He is also concerned to examine how the world of the CMO is being changed by the introduction of new technology. It was these interests and concerns that led him to conceive the idea of this multi-disciplinary conference on the subject of marketing in the 21st Century.
Richard began with the challenge that ‘digital’ is a word to be avoided and is too narrow a concept for 21st Century Marketing. Thinking ‘digitally’ is not enough. Instead the real issue is how to control, manage and process customer data so as to create meaningful information that, at the strategic level, guides the business direction and, on the tactical level, can be used to serve customers better and more efficiently. However, the question is: who is best placed to lead the board room discussion on this issue. He commented that, from a recent survey carried out by the Marketors, it was clear many marketing professionals were ready to make use of the new technology, if the IT department or the Board provided it to them. However, they were less willing to take the lead in persuading the board and other stakeholders as to what technology should be adopted and how it should be used. This apparent reluctance of marketers to take the lead in adopting the new technology is disturbing. Unless the CMO is prepared to drive the confluence of marketing strategy with ICT capability, he or she will become increasingly marginalised.
A look ahead to 2030 - how technology is changing the world.
Duncan Tait is a Senior Executive Vice President and Main Board Member of Fujitsu Limited. With 27 years in the ICT industry behind him, Duncan has a broad spectrum understanding and global outlook on where technology is taking us and how business and society must respond.
Duncan communicated six key messages:
Message 1: Wake up, we might not be in business soon:
- We are experiencing a tsunami of change.
- Marketers must change themselves to lead change.
Message 2: The fourth industrial revolution will change everything
- The scale, velocity and complexity of change is unprecedented.
- Huge amounts of data, combined with advances in technology, and the convergence of global megatrends mean mega opportunities and mega danger.
Message 3: Data is key, hyper-personalisation is the future and trust 3.0 is the foundation.
- Hyper-connectivity and
- Hyper-computing power equals
- Hyper- personalization.
- Focus on cyber-security to safeguard customers’ data and ensure their trust is vital.
Message 4: Speed of innovation is critical:
- Companies must be bold, agile and very, very fast.
- Companies need to think differently to open up the creation process.
- Marketing has a key role here.
Message 5: Marketers must lead the way in this golden age of value creation by:
- recognizing the changes that are taking place in the market;
- facilitating organisational change; and
- leading change in the marketing function.
Duncan outlined his views on global mega trends shaping our world - ageing population, urbanisation and exponential population growth. It is estimated that 375 million jobs will disappear by 2030 through automation and AI. Thus creating new roles and developing new skills now are key for future success. However, we can only solve global issues through 3-way collaboration between government, educators and business and a human-centric approach to market developments in the context of these changing demographic factors.
The key issue for marketers is that the world is moving to hyper-personalisation. In order to compete in such a world, marketers must be ready to lead value creation, constantly update their own skills, and innovate with a customer-obsessive mindset. It is no longer sufficient to focus on traditional product or service lines. Marketers must be ready to explore opportunities to create new value for their customers. However, he commented that marketers who thought they were achieving this just by concentrating on the more effective use of social media to sell existing products and services needed radically to rethink their role.
Marketers should see themselves as the people who enable value creation through data. To do that successfully, they will have to determine what kind of data is essential for delivering such value, how can they access it, and which adjacent industries would be suitable partners to help them do this. Data is to this century what oil was to the last one – a driver of growth and change - and the volumes of data will be enormous. However, the amount of data is not the important thing. Success will come from how well marketers drill into the data to discover useful insights which create business value.
Click here to read a transcript of Duncan’s talk together with copies of his slide deck
Frugal Innovation: new ways to go to market.
Jaideep Prabhu is Professor of Marketing and Jawaharlal Nehru Professor of Indian Business and Enterprise, and Director of the Centre for India & Global Business at Judge Business School. Jaideep’s research interests are in marketing, innovation, strategy and international business and he regularly consults and advises alongside his appearances in the media. His most recent book Frugal Innovation: How to do More with Less was published in February 2015 and won the CMI’s Management Book of the Year Award 2016.
In his lecture he explained the concept of frugal innovation. Ubiquitous ICT such as:
- smart phones,
- shared platforms,
- cloud computing,
- 3D printers,
- crowdfunding and
- social media,
has given rise to grassroots innovation and entrepreneurship, empowering more and more people to create faster, better and cheaper market-based solutions with minimal resources.
The developing world has been leading frugal innovation for some time. One example is the use of smart phone applications to create and manage a financial service which provides micro-loans to enable entrepreneurs to develop and fund small businesses and to provide and manage short term small-scale credit to their customers.
More sophisticated examples include simple kinds of telemedicine. Patient data collected in basic rural clinics can be transferred to consultants in city hospitals using mobile phone or satellite links. The consultants can then use the links to send their diagnosis back to the clinic and guide the local staff through the necessary treatment. It is even possible for the consultants to specify prostheses (such as splints) and have them created remotely in the clinic using 3D printing.
More recently the West is also adopting frugal innovation moving in the direction of the ‘prosumer’ - a new breed of customer who is actively involved in the economic process of peer-to-peer making and shaping business models and creating new products. This ‘Maker Movement’ is epitomised by the Airbnb model of asset-light investment, deriving value from under-utilised resources at very low cost.
Jaideep outlined six principles for frugal innovation:
- Seek opportunity in adversity.
- Do more with less.
- Think and act flexibly.
- Keep it simple.
- Include the margin.
- Follow your heart.
With the world’s resources under strain, and in the context of Duncan Tait’s views on global mega trends, finding new markets cheaply and effectively will be a key future consideration for many CMOs.
Click here to listen to Jaideep speaks about how Frugal Innovation will contribute to the future of marketing:
Click here to view Jaideep’s slide deck.
The Power of Visual Data.
Shasha Lu is a University Lecturer in Marketing at Judge Business School. She trained in both marketing and computer science,and is passionate about combining state-of-the-art machine learning and computer vision techniques with marketing models to gain better customer insights and improve business practice. Her research focuses on Artificial Empathy (Visual data-based), Visual Product Design and Optimization, Digital Advertising, Visual-based Data Mining and Marketing Strategies.
Channels like YouTube and Facebook and all of the smart devices in continuous use have created a huge amount of visual data. Shasha shows that only about 21% of data can be described as structured (usually numerical data that can be assembled into a spread sheet). Visual data is almost entirely unstructured and forms a very large part of the remaining 79% of unstructured data. Yet we receive most of our information about the world visually. “A picture is worth a thousand words”. Thus understanding how we process visual data and how we react to it is a valuable aid in understanding consumer choice and preferences. However, currently the exploitation of visual data is at an early stage of development.
Analysis of visual data is already being used in pioneering applications. Nieman Marcus in the United States have started analysing videos of customer reactions when trying on clothing to help predict what styles and types would be most likely to attract them to buy. Some insurance companies are using an application which claims to analyse facial data (using algorithms developed through machine learning based on the analysis of many thousands of facial images) to predict the life expectancy of people applying for life insurance.
As an illustration of this, Shasha invited the audience to determine psychological states and consumer preferences from a series of videos where they had to analyse purchase intention or brand preference solely from facial expressions and body language. The disparate responses perhaps reflected the early stages of visual data-based information as marketing insight, but there was no doubt that this is a fascinating area set to grow and deepen our understanding of customer behaviour.
CMOs who can exploit visual data will undoubtedly have an edge on competitors failing to look at this rich source of information on untapped (and often unconscious) customer needs and desires.
Click LinkedIn to listen to Shasha talking about the power of visual data.
Click here to view Shasha’s slide deck/
Transforming the Marketing Function to Meet New Challenges.
Kieron Matthews, Managing Director of the consulting firm Flock Associates, has extensive experience of transformation of the marketing function, through integrated and effective marketing and communications, gained in advertising and digital agency roles working with many global clients in multiple markets.
Kieron outlined seven major trends for marketers to focus on in 2018:
- Chat Bots
- Artificial Intelligence
- Mobile Applications
- Social Networks
In this complex new world, Kieron advocated the need for brands to have a ‘simplified’ relationship with their customers and to use data and technology to remove confusion and barriers so customers could interact in the way they wanted. One simple example in the area of payment is doing away with the current complex requirements of many organisations for purchasing on line, and replacing them with a simple procedure usually by way of an app on a smart phone. (For example - one click to reorder your last pizza and pay for it.)
Kieron considered the new skills and organisational structures marketers will need in the 21st Century in order to deal with these trends and deliver customers’ new requirements:
- How should the marketing department of the future be structured?
- What work should be done in-house
- What work should be out-sourced?
- Where can new talent be found, and how can it be motivated and retained?
Kieron stated that, in his experience, in order to achieve this marketers must address four areas:
- Disruption not Tweaks
- People not Roles
- Needs not Technology
- Partners not Suppliers
Minor changes or progressive reforms of the marketing function do not work. Radical, disruptive transformation is required to make the organisation fit for 21st Century Marketing. Sadly, in many cases, this means that the way forward is not assigning the same people to new roles, but finding new staff who already understand the new roles required. However, the adoption of new technology is not an end in itself. First decide what new functions are needed and then adopt the technology that delivers them. Finally, no marketing structure can contain all the skills required for marketing in the 21st Century. However, success with third parties is not achieved by treating them simply as suppliers. Instead, it is necessary to create an eco-system in which all parties work together , contributing their particular skills to the common goal, for their mutual benefit.
Kieron concluded by emphasising that to be effective the reorganization and restructuring of the marketing function should focus around customer needs with technology in a supporting role. Innovative change programmes produce the best results for the business when the end customer is firmly in mind at the outset.
Click here to view Kieron’s slide deck.
How Technology is Changing the World of the CTO and CMO.
Conway Kosi has held many international roles in Fujitsu, including Executive Vice President of the Strategy, Marketing and Sales Support function within Fujitsu’s International Business, and Head of Managed Infrastructure Services (MIS), EMEA responsible for MIS’s strategy, execution and end-to-end business management.
Conway started by describing his own experiences in Tokyo during the great East Japan Earthquake of 11th of March, 2011. Fixed and mobile phones were completely offline for several hours but remarkably, the Internet stayed up and people were forced to devise new methods of communication to stay in touch and cope with the disaster.
He believes that what happened then has relevance for us as business people, and especially for marketers. We now face a different kind of tsunami – the tsunami of change to which Duncan Tait referred in his lecture - and in responding to these new challenges we can all reflect on how people responded to the Great East Japan Earthquake:
- They were open-minded and hugely collaborative.
- They shared insights and information, and collected data from many sources to inform their decisions.
- They formed teams of experts from many different organisations to devise solutions.
- But above all, they acted with enormous speed.
We need to find new ways of working to make that extraordinary response our ordinary behaviour, because we currently operate in a two speed context:
- Consumer speed:
where customers are changing their habits and behaviors at a lightning pace, and …
- Corporate speed:
which operates on traditional monthly, quarterly or annual budget cycles.
- Because of this:
corporates are falling further and further behind their customers.
Conway stated that in its latest global survey Fujitsu found that 98% of CEO’s are concerned that new digital entrants will disrupt and destroy their established business models. However, they believe that the digital revolution will help to counter these threats by enabling a faster speed to market and a greater ability to adapt to changing market dynamics.
Nevertheless, in this period of digital transformation, the basic marketing concept still remains constant: to understand customers’ needs and then quickly satisfy them at a profit. The problem is that businesses have to do this in the face of disruptive forces unlike any ever seen before - new competitors, new offers, whole new ways of thinking.
However, Conway believes marketers have never been better placed to help their organisations transform and thrive in the face of this disruption. In this context marketing has two roles:
- The first and most important is as a leader of organisational change:
Marketers must focus on ensuring their companies can capture, manage, secure and mine the data to produce the valuable insights that will be so essential to understanding customer needs. Armed with these insights the CMO must help to form new eco-systems, which will enable radical agility in finding new products and services.
- The second is to change their own marketing functions:
They need to do this, in order to be able to leverage the new technology and tools now available, without which it will be simply impossible to achieve the first role. To do this marketers must have a better grasp of the technology and tools now available.
The danger is that if marketers are not more proactive in helping all this to happen, if they do not assume a more strategic role in the company, then they risk being relegated to a tactical advertising and communications function. The successful CMOs will thus be a combination of influential strategist, analyst and technologist, able to deliver empowered marketing through the voice of the customer, lead design-thinking and take new solutions to market.
Click here to read a transcript of Conway’s talk.