The CMO 2.0 conversation with Michael Mendenhall, who is currently the COO and President at Lipman and who was formally the CMO at HP and the Head of Marketing at Disney, was most informative.

Michael started his career with a small agency and later developed a rich background in corporate marketing at Disney. At HP, he learned a great deal about technology and consumer behavior, content and storytelling, and social and mobility. Most recently he became part of a group that bought Lipman, an 80 year old advertising agency, where Michael is trying to rebuild an agency with an outdated advertising model into a modern marketing, branding and digital communications consultancy.

During our conversation, Michael mentioned that one of the biggest mistakes that marketers made was to allow new media marketing to bifurcate off from the rest of the marketing group. Based on their lack of understanding on how to monetize new media, and justify ROI’s to their CFO’s and CEO’s, marketers set up  groups on the side and gave them minimal dollars to test and beta. Not only did they allow those groups to be siloed, they were also underfunded. Marketers did the same with e-cmmerce groups, which became disjointed from the people developing the corporate web site.  And they are doing it again with the social – CMO’s are once again not sure what to do with it and are under-funding those efforts in small groups on the side.  The marketing department became functionally aligned with channels – a social channel, an e-commerce channel, an m-commerce channel, etc. Agencies did the same thing, aligning themselves against those same channels – resulting in the rise of social firms, digital agencies, commerce types and mobile shops, etc. The problem with a siloed marketing department it that it forces the CMO to spend a lot of time trying to integrate all those groups so that they have one voice instead of focusing their efforts on what matters: How will I grow the business? How am I increasing share? How am I increasing margin? How am I taking share?

It also makes it difficult for the marketer to focus on the customer journey – from discovery to purchase and hopefully repeat purchase and evangelism. The customer does not think of a company as a set of siloed groups or channels and will engage with companies across all those channels at different stages of their journey. In addition, the customer will increasingly engage with touchpoints that are not controlled by the company – peers, friends and other tribal members that are out there making buying recommendations. When Lipman engages with their clients, they try to break those siloes by having every single expert at the table – the head of brand, the head of technology, the head of digital, the head of creative, and the head of media buying.

A new skill-set requirement for marketers in this digital age is the analytical skill-set – the ability to develop a 360 degree view of the customer as they go through their buying journey; the understanding that information is knowledge that gives you a competitive advantage; and the idea that raw data coming from the bricks-and-mortar transactional environments can shape R&D, as well as customer engagement, cross-sell and up-sell opportunities, and even shape customer loyalty. Most marketers do not reap the benefits from all the rich customer data that resides in their repositories. Understanding that opportunity will become as important for marketers as understanding the importance of the compelling story that will engage their customers and prospects. When CMO’s don’t have the wherewithal to deal with big data, they should team up with their CIO to make sense of it. The problem is that CIO’s often focus on storing the data, securing it and serving it up – not so much on providing services to help the business glean insights from it. At Lipman, Michael is trying to fill that gap by having his own Consumer Insights Group and by acting as a go-between between CMO’s and CIO’s. If you are interested in this topic, and are involved with Digital Marketing, you may consider taking the Digital Marketing 2.0 survey which we just launched with the Society for New Communications Research (or pass along the URL to the survey to a colleague - digitalmarketingtwo.com)

All that being said, marketing and advertising are not likely to be become pure technology plays – according to Michael – because what makes the difference is the content and the storytelling that you use to express your brand. Technology, which can be used to make us smarter about when, where, and how to engage with prospects and customers needs to be balanced with great content.

It’s important to understand culture, not only consumer cultures but also corporate cultures. For companies that have a considerable heritage that can be especially tricky. You want to build on that heritage, by pulling out those attributes of the heritage that are relevant in today’s marketplace, without building a museum out of your brand.  When it comes to consumer cultures, too many companies chase after the “cool factor” or the novelty – which can be very short-lived and which often detracts from building solutions that have a real purpose,relevancy, and are tied in with current initiatives.

On the future of how companies measure the impact of the relationship they have with their agency, Michael does not think that the push toward sharing risks and rewards will work, because agencies do not control the whole process that determines success. Marketers will need to monitor KPIs that the agency can actually affect, such as KPIs on the information side, and not the internal KPIs related to product success.

In closing Michael had the following words of wisdom for fellow marketers – don’t lose focus on the customer and their journey. While this may sound basic, with most companies being structured around functions and channels, and in some cases having the wrong skill-set,  that is not usually something that comes naturally.

Other things we talked about:

• How agencies have been successful at buying all the functional expertise through M&A’s but often failed to do a good job at the integration of all those functions.
• The importance of having stories that are authentic and transparent, because through technology the customer can see and hear almost everything you’re doing as a business
• How consumer data can give you insights into all aspects of the customer-buying journey – when they will buy, when they will leave you, etc.
• How most companies should focus on existing customers rather than new prospects that can cost as much as 10X in terms of customer acquisition cost
• How listening has to become a great shill for marketers
• How the trend towards purchasing creative through procurement is a real bad idea

CMO 2.0 Michael Mendenhall [ 51:26 ] Play Now | Play in Popup | Download (2504)

My first CIO 2.0 conversation with Shirley Cunningham, the CIO at Monsanto, was truly a 2.0 conversation. Shirley has a rich background. Hailing from Scotland, she held many positions in MIS departments (Management Information Systems) across various industries before joining Monsanto in the late 90′s through an acquisition. She became the global CIO 3 years ago.

As CIO at Monsanto, Shirley is a member of the strategy team. Becoming a member of the strategy team came with a change in role for  IT – that from being an order taker to a strategic partner sharing responsibility for the business’s growth. They morphed from being the implementers of ERP systems and other technologies to a team that now worries about customer space transformation though information and technology, advanced decisioning, and customer and product pipeline. And while the IT department at Monsanto supports all functions, most of its resources are dedicated to R&D and the customer space.

Being a strategic business partner rather than a support organization requires a deep understanding of the business – that is why over 35% of Monsanto’s R&D IT group has science backgrounds with 10% having PhD’s. They don’t just support the product development process – they are a key driver of it. This shift from being a more traditional IT department not only required a whole new level of leadership; it required a complete mindset shift. If you would have asked a random person in IT what they were doing a few years ago, they might have answered “I am an Oracle DBA.” Today, you are more likely to get the answer “I support a system that helps us collect $3.5B in revenue.”  People now think of their jobs in terms of the value that it delivers to the company, which is not just great for the company, but also energizing for the individuals. And therein lies a virtuous circle – when people are more energized, you have more innovation, more creativity and thus more energy and excitement.

They have a metric-driven culture. Not just one where they focus on understanding the cost of transaction and other classic metrics, but one where they measure the outcomes and values of technology usage. So they will measure the value of being able to assemble a genome on their product pipeline and their ability to commercialize products. A dedicated, and very agile, enterprise information management group helps them do that.

Word of mouth is very important in the agricultural space – with most of it happening in coffee shops. As some of those conversations are moving online, it will be very important for Monsanto to have a seat at those virtual coffee shop tables. That is one reason why Shirley thinks there is a lot of value in having employees be active in communities and social media. They are still in the early days, but plan on developing this capability in the future.

Monsanto is of course known for its culture of innovation – which is driven by its overarching goal to double the yield in agriculture within the next few years. They are passionate about innovations that impact sustainability and they think really big when it comes to their mission. This “change the world”  type attitude makes for a great innovation culture – one in which people constantly think beyond the boundaries. It also helps with the type of people they attract to the company.

Monsanto actually started an innovation lab – which is unencumbered by corporate standards – and where people can work on getting early proof of concepts. Employees first submit ideas to peer review, after which a VC-like board approves funding for further development.

Innovation at Monsanto is not contained to its corporate walls – they also co-innovate with suppliers and academia. Cross-enterprise innovation takes a lot of effort on both parties, and there always needs to be clear win for both of them.

Another interesting aspect of Monsanto’s culture is the fact that they are  non-hierarchical. They have been operating that way for 15 years and they seem to be one of the only companies that has been able to achieve this at scale. Solid lines and dotted lines like you would find in typical matrix organizations are non-existent – everyone has multiple solid lines. Those employees that come from more structured organizations take a while to get used to this non-hierarchical structure, but ultimately it makes for a great place to work. People know that they can walk in and talk to anyone, including the executives.

In closing Shirley had a few words of advice for executives at other companies – CIO’s need to step up and take ownership for things that they traditionally would not have done before so that they can have a bigger impact on the business, and they need to take more risks.

Well said – Shirley is clearly a 2.0 CIO.

Other things we talked about include:

• What worked and did not work with the “two-in-a-box” concept of pairing up a business leader with a technology leader
• The consumerization of IT and how all companies will have to be ready for that
• How they deal with risks, like IP leakage risks, through awareness and education
• The importance of being active on a local community basis while being a global company
• The role of rewards and recognition within an innovation culture
• The importance of a successful collaboration culture in an innovation culture
• The role of values and the importance of reinforcing those values to ensure a good corporate culture

CMO 2.0 Conversation with Shirley Cunningham [ 54:02 ] Play Now | Play in Popup | Download (2810)

My CMO 2.0 Conversation with Tom Nightingale, the CMO at Con-way, a $5B publicly traded transportation and logistics company, was very enlightening to say the least. When I spoke with Tom, he had been the CMO at Con-way for 5 years, where he overlooks public relations, web and digital marketing, product marketing, lead generation, events, direct marketing, new product development, customer satisfaction and voice of the customer – generally what you would expect the responsibilities of a CMO to be. He is also responsible for internal communications and enterprise sales management. One of the things that was intriguing, and that I think we will see more of as part of a CMO’s responsibility in the future, is that he is responsible for recruitment marketing, a major effort as they recruit over 6,000 drivers a year at Con-way (Note: we will be launching a research project on recruitment marketing in partnership with Monster.com — more on that later, email me if you have an interest in participating).

When Tom talks about being in charge of recruitment marketing, he talks about having the responsibility to fill the funnel, which then gets processed by his partners in HR. His role is to bring in quality candidates who align with the Con-way brand and their employment value proposition. Being in charge of employee communications means he communicates with employees from the day after they process through the HR funnel till the day that they leave.

Like most CMO’s, Tom has seen some big changes in marketing over the past few years, with the two most notable being the rise of social media and the decline in effectiveness of TV and print advertising. Another big change is the increase of content curration across all channels.

As in most industries, word-of-mouth is an important vehicle to reach customers, prospects, and prospective employees. At Con-way they make sure that the content they create can easily travel and be used when friends recommend them as a potential vendor or employer. A good example of that is how they share their job feed on their Facebook page for others to see and share with friends.

As said earlier, social media has made a big difference in Tom’s job over the past couple of years. While on the commercial side of their business the use of social media is still in the early stages, they see it playing an increasing role in customer service related inquiries as well as in requests for proposals and quotes. They also use social media internally, one example being the use of twitter to connect truckers with their load boards.

An interesting challenge facing Con-way marketing is that they have thousands of customers with whom they have a pretty shallow relationship, in essence moving freight for them from point A to point B, and which differ from one another on a regional basis. They also have several hundred customers with whom they have very deep relationships – those that outsource their entire supply chain to Con-way, and who have needs that are different based on industry. Tom is convinced that the latter group presents a bigger opportunity to connect customers with one another using social media or social CRM – ensuring that the collective becomes smarter than the individuals. When he thinks about a community for those customers, he also envisions hyper-local and face-to-face components – which is the right way of looking at customer communities when you have that opportunity.

We also talked about accountability and metrics – a topic that is top of mind for many marketers. At Con-way, marketing is accountable for three things – reducing the cost to acquire and retain customers, attracting and retaining the best and brightest employees, and positioning the company for growth. All metrics that are being used at Con-way support those three overarching goals.

The conversation then switched to the role of culture in a services company like Con-way. Con-way has a simple set of values that they truly live by – integrity, commitment, safety, and excellence. With a business where the brand is impacted by lot’s of employees who interact with customers, it’s critical to  the brand to have simple values that everyone can live by.  That is also why the employee brand and the customer brand have to be the same – if employees are the ones that will influence the brand promise in customers’ minds, they need to live that brand promise. The values at Con-way are so important that they are discussed every day during pre-work meetings with 8,000 drivers who interact with an average of 25 customers every day.

We closed the conversation by talking about innovation. At Con-way, they make a distinction between process innovation and product innovation. Process innovation is key when you have to constantly increase efficiency in a low margin industry to maintain profitability, while maintaining very high levels of customer service. Product innovation at Con-way is based partly  on Voice of the Customer and partly on trend spotting to see where the industry is headed. Launching new products in a service company like Con-way can be a tricky proposition. Unlike with product companies, where they can launch a product that is 80% complete and fix it later, in a services company the product has to be 100% perfect when you launch it.

It’s really interesting to see how the issues of a CMO in a more traditional business are not all that different from those in more recent industries, like for example the high tech space.

Other things that we discussed include:

• The importance of alumni  in marketing and new employee training
• More detailed conversation on how the overarching goals drive metrics
• The integration between sales and marketing
• Marketing content co-creation with sales
• The use of social media for internal communications
• The importance of content curration and thought leadership
• How you need to adjust your business practices to the local culture
• The differences in employment marketing in different cultures

CMO 2.0 Conversation Tom Nightingale [ 55:51 ] Play Now | Play in Popup | Download (1183)

I truly enjoyed my CMO 2.0 conversation with Karen Quintos, the CMO at Dell. Karen has somewhat of an unusual background for a CMO at a high tech company. She spent almost half her career in the pharmaceutical industry and did a stint in the financial services industry before landing at Dell 11 years ago – a rich background that was clearly reflected in the conversation. Karen also has a passion for being close to the customer – a good trait for any CMO.

We first talked about social media, a topic we had discussed at length with Erin Nelson, the previous CMO at Dell, and Manish Mehta, the VP of social media and communities, during an earlier CMO 2.0 Conversation. Karen confirmed that social media absolutely has to be built into the fabric of the company and that the (social) customer has to be at the core of everything. In fact, Karen believes that customer centricity is key to win in the marketplace. At Dell, they leverage social media as part of everything they do – product development, sales, marketing, HR, IT, finance, and service and support.

Karen then described the evolution of IdeaStorm, the Dell innovation communities, and how they now include Storm Session – focused and directed customer feedback sessions bound in time. Examples of successful Storm Sessions included discussions with CIO’s around virtualization, sustainability, and data center-type solutions – where customers could discuss how they think about ROI and total cost of ownership rather than just talk about technology deployment issues.

The Dell Social Monitoring Command Center, which was launched last year, is set up for employees to monitor, respond, and trend the conversations that are going on about Dell all over the world. On any given day they get upwards of 25,000 different conversations about Dell. A small team of people triage the conversations  by coding them red, orange or green, and feed them into processes like product development. Karen made the point that when it comes to social media monitoring companies need to realize that it should not be about hearing, but about listening and making sense.

“Leveraging social media cannot be a bolt-on strategy,” said Karen, “it has to be built into the culture…it cannot be someone’s second job, it cannot be something that they think of once a week. It has to be something that’s integrated into their day-to-day operations.” Right on! But amazing to hear that and then realize that more than 60% of those companies that participate in our Tribalization of Business Study (co-sponsored with Deloitte and the Society for New Communications Research) have 1 or less than a full time person associated with these efforts. Those companies need to wake up and listen to truly Hyper-Social organizations like Dell.

There are of course risks associated with social media. One of the early risks that Dell identified was to react too quickly – either latching on to negative comments first or latching on to proposed product ideas that very few people want. Sounds a lot like not giving in to the “tyranny of the minority” and instead reacting to real trends. Another risk they identified early on was around transparency – especially when eager employees don’t disclose that they work for Dell. Karen believes that many of the risks can be mitigated through training and education.

As many other CMO’s at successful Hyper-Social Organizations, Karen pointed to the importance of having simple values to ensure consistency across the multiple employee touch-points that they have with their customers – in their case be open, be transparent, be simple, and be caring.

Next we switched to the topic of culture, which Karen believes is, if not the most important, one of the most important elements in a company’s success. She considers Dell’s culture fairly young at 27 years old, but truly believes that is what guides behavior and brand. She also believes that it is extremely important to link your own culture(s) with that of your customers – especially in the B2B and public sector space, which make up 80% of Dell’s business.

An important part of culture is the culture of innovation. Over the last two years, Dell has fueled innovation not just from within but also through acquisitions. Interestingly enough, but not surprising (the world is not flat after all), Dell sees aquisitions from major innovation centers like Silicon Valley as being totally key to continue to bring the spirit of innovation within the company.

We closed the conversation by talking about a super-cool program that Dell is doing in partnership with the University of Texas – the Dell Social Innovation Competition. It’s open to higher education students around the world who have a passion for taking a social issue that they see within their community and coming up with a plan to address it. They submit ideas, business plans and videos which get voted on. The best ones get to travel to Austin where a finalist gets selected. With kids from India, Nigeria, France and the United States competing with one another, they are able to create a cauldron of diversity of thought necessary for innovation that would be hard to create in any corporate environment.

That is definitely something I would want to tell my 16 year old son about!

Other things we talked about include:

• The recommendation for companies to listen and engage with the both the good and the bad in social media, and how the sooner you engage the more successful you will be
• How Dell has training programs in place to teach people (9,000 people trained so far) how to listen and how to engage
• How to ensure that the proper experts get involved in deeply technical discussions
• The importance of trusting employees to do the right thing
• The importance of being able to trend conversations and launch more in-depth discussions with customers about important topics
• The importance of hiring people with a passion to win
• The importance of tying compensation and rewards to a set of behaviors – not just “what” behaviors, but also “how” behaviors
• The importance of social rewards in fostering the right culture
• The importance of employee rotational programs to foster innovation

CMO 2.0 Conversation with Karen Quintos [ 52:02 ] Play Now | Play in Popup | Download (2267)

If you want to meet a truly insightful CMO 2.0, meet Ted Smyth, the Executive Vice President, Corporate Affairs at the McGraw-Hill Companies. Ted has a really interesting background that started with a 15 year long  career as a senior Irish diplomat. He then switched over to the world of business by joining Heinz, where he spent 20 years before joining McGraw-Hill 2 years ago. One of the main lessons learned from this diverse background is that companies have to embrace performance with purpose – you don’t want to achieve profit goals at the exclusion of what’s good for society. Young people especially, will not want to leave their persona’s at the company’s front door, they will want to continue to do good for society while being at work. Another obvious benefit of mixing do-good with company performance  is that as a company you will increase the passion of your employees in the context of their work – which is clearly a win-win proposition.

We quickly delved into the topic of innovation, a hot topic at McGraw-Hill, where many of the industries in which they operate are undergoing tectonic shifts, and many of their businesses are going through the classic innovator’s dilemma. Innovation and customer focus are two major initiatives at McGraw-Hill. They strive to delight customers and prospects, and seek out people who are brilliant, courageous, curious, competitive and driven to do so – both inside and outside the organization. Innovation at McGraw-Hill is both a grass roots as well as a top down initiative, and celebrating wins, benchmarking themselves against other innovators, and developing an understanding of societal needs is all part of their culture of innovation. Ted is a firm believer that innovation needs to be structured and attached to people’s work routine. It needs to be disciplined to succeed and you always have to be on the lookout to not just innovate according to your capabilities, realizing that sometimes you need to upgrade your capabilities to develop what customers want.

Next we talked about education and learning, an important part of McGraw-Hill’s business, and a perfect example of what Ted meant when he talked about achieving business success while also doing good for society. Learning and education are clearly becoming digital activities that can help fix the current system, which is failing our kids – with kids who are slower than average falling behind and those who are faster than average getting bored. Digital courseware helps alleviate these problems. In digital environments, teachers and educators are freed up to become coaches with the ability to provide one-on-one help for the kids. While digital learning can remove some of the social barriers that sometimes inhibit learning (e.g., humiliation for not getting it), digital learning needs to be a very social/collaborative activity in order to succeed.

We then talked about the changes in how people consume content and where they get their buying recommendations from, and how that impacts marketing. The way McGraw-Hill thinks about marketing and advertising has obviously changed, with much more activity shifting towards  thought leadership and relevance in social media. Just like other Hyper-Social Organizations, McGraw-Hill realizes that you can only ensure consistency across all the different touch points that you have with your customers by living your mission and values. They have a very clear mission - need for knowledge, need for capital, need for transparency -, and a set of values that are easy to live by – objectivity, integrity, candor, diversity (especially of thought), and independence.  These simple concepts unite all employees across all divisions and help drive consistent decision-making across different markets with different customers.

Ted finished the conversation with two words of wisdom for marketers – we need to introduce more humor and emotions in communications and better articulate great societal causes. In closing he quoted some lines from an Irish poem by Nobel Laureate Seamus Heaney from the Canon of Expectation that got recited at a St. Patrick’s Day event he attended the day before our interview: “I yearn for hammerblows on clinkered planks, the uncompromised report of driven thole-pins, to know there is one among us who never swerved from all his instincts told him was right action,who stood his ground in the indicative, whose boat will lift when the cloudburst happens.” That is where we as individuals, communities and companies need to be, we need to stand our ground in the indicative, and our boat will lift when the cloudburst happen. We need firmness of purpose and be able to express it emotionally, poetically and humorously – that is where communications needs to be in order to be effective in this cluttered world.

What a great way to close a conversation with a truly great human being. Thank you Ted!

Other topics we touched on:

• The importance of the fundamentals of conflict resolution in business
• The role of training in fostering innovation
• The balance between understanding unmet needs and prospects vs existing customers needs
• The importance of serendipity in innovation
• The lessons that can be learned from game designers in education
• The need to bring down silos in stimulating innovation and learning, both in education and businesses, and the importance of social networking in doing so
• Generational differences in learning
• The importance of content curation in the publishing industry
• The dynamics of the current knowledge economy

CMO 2.0 Conversation with Ted Smyth [ 58:26 ] Play Now | Play in Popup | Download (3143)

My CMO 2.0 Conversation with Eran Barak, the SVP of Marketing and Community Strategy at Thomson Reuters was a good way to restart the series.

Eran has been involved with social technologies for a very long time, dating back to the precursor of ICQ (sold to AOL) when he was in college. He joined Thomson Reuters in 2004, just about the time when blogs and podcasts were becoming very popular – turning everyone into a content creator, and potentially a competitor. He quickly realized that social media was a great way to interpret content – and not just a way to syndicate/filter user generated content. Using the “Who Wants To Be A Millionaire” game show analogy, Eran described how social media allows financial analysts to now have three lifelines instead of one – call on experts, call on people they trust, or rely on the crowd to analyze situations.

It’s very clear that for Thomson Reuters, Social Media is all about the social and not about media – an interesting perspective coming from a company with deep media roots. They use social media to connect their customers with one another, and not to try to raise awareness about their company in the markets they operate in.

At Thomson Reuters they take the social seriously,  applying lessons learned from the wold of epidemiology and sociology to their sales and marketing processes. Specifically they leverage the friendship paradox to penetrate accounts and to make their marketing messages go viral. The friendship paradox says that if you recommend a friend, that person will be more connected (i.e., have more friends) than yourself. So by having their sales people ask prospects to recommend others within their organization that they should talk to, they get closer to the center of decision making than by navigating through the traditional hierarchies. Thinking about the social in business outside of social media is a trend that we increasingly see happen within successful organizations. Humans have always been social, but for some reason we leave our social being at the front door of our companies. Bringing that back in business the way Thompon Reuters does it with their sales force is a powerful business driver.

The two “must have” criteria for the social to succeed in financial related businesses, according to Eran, are trust (knowing that the person you are talking to is indeed who she claims to be) and security of the interaction between people (knowing that what I am talking about and sharing will only go to who I want it to go to).

We also talked about risks associated with social media and how it is better to deal with them by educating people and make them risk intelligent rather than developing policies and rule books to try to control every possible risk contingency.

Every industry is faced with accelerating change, but the ones in which Thomson Reuters operate are seeing their core foundations shift. The innovator’s dilemma is not just a periodic occurrence, it’s a constant. Eran talked about how you innovate in an environment like that – by hiring really smart people, allow them to do crazy things, and by developing a sound acquisition strategy. At Thomson Reuters, they also leverage social media to crowdsource business and product ideas with customers.

We wrapped up the conversation by talking about the fundamental changes that are happening in marketing. What is important to Thomson Reuters’ marketing is making sure that they develop content that travels among their customers and prospects. Eran truly believes that the messages that you put out in the marketplace need to be short and simple – so people can remember them and repeat them in conversations. You need to be able to distill your value proposition to one or two sentences. If you want to turn your customers into word of mouth engines, the story needs to be so unique and compelling that people want to tell their friends. If they don’t retell your story, your marketing dollar stops with the few people that are listening to you. Spending on traditional, old school advertising and marketing programs is something Eran really cannot wrap his head around in this day and age. Marketing needs to embrace simplicity and differentiate on the basis of emotion.

Eran, who truly deserves the CMO 2.0 title,  ended the conversation with some final and very valuable words of wisdom for fellow marketers – when thinking of social media, don’t start with social media (e.g., we need a Twitter feed or a Facebook page). Think through what your strategy is and then see if you can leverage social media as part of that, and ask yourself whether you can develop a message that is compelling to the point that people will want to retell it to all their friends.

In a lot of ways not all that different from what we say in our book The Hyper-Social Organization: find you tribes and what makes them tick, and engage them where they hang out.

Other things we discussed include:

• Social media in heavily regulated markets
• The importance of having social media policies that are encouraging rather than discouraging
• How you keep a good balance between providing high quality professional content and being a curator for user-generated content and how to use social filtering to deal with the increasing “infobesity”

CMO 2.0 Conversation Eran Barak [ 56:29 ] Play Now | Play in Popup | Download (2300)

My CMO 2.0 Conversation with Erin Nelson, the CMO at Dell, came with a bonus in that Manish Mehta, the VP of Social Media and Community for Dell joined us as well. I hope you will enjoy this CMO 2.0 Conversation as much as I did.

Erin is responsible for Dell’s Global brand strategy, social media, global communication, as well as for the talent development of the Dell marketing teams – where she focuses on reinvigorating the way Dell marketing works. She has been with Dell for 11 years, while Manish has been with them for 15 years. Manish is in charge of social media and communities, including dell.com, their intranet and their extranet.

One of the first things we discussed was the role of social media and communities within Dell’s business strategy – and how they got to become one of the leaders in social media adoption. On the one hand, dealing with customers directly through social media is a natural extension of what the Dell brand has been all about for the past 25 years – having a direct relationship with the customer. On the other hand it was also precipitated by what has come to be known as “Dell Hell”, when prominent blogger Jeff Jarvis and others had some not too flattering things to say about Dell in public forums. The latter incident gave them no choice but to jump full force into embracing the social on a large scale. As Erin said, it wasn’t a question of test, learn, and measure, it was actually a question of survival – with their brand under severe pressure. In hindsight, Erin believes that this has been a huge benefit for Dell, saying that you cannot get into social media by just putting a toe in the water – you are either all in and it becomes part of your culture, or you’re not.

As we argue in our upcoming book, the Hyper-Social organization, we could not agree more. Companies that successfully embrace the social are those, like Dell, that make it part of the fabric or DNA of everything they do – it cannot just be managed as bolt-on programs to existing strategies. It is also interesting to note how companies like Dell and IBM, which have managed to totally transform themselves, were able to do so only after “near death” experiences (and those are my words/observations, not Dell’s). Dell truly rebuilt itself with the customer at the core of everything they do – how they sell, how they market, how they service and support, how they communicate, and how they design new products.

The scale at which Dell interacts with customers online is staggering – with billions of connections every year through the purchase path, the support path, and through the community path of learning how to use technology and achieve more with it. All that cross-functional customer interaction required them to set up a cross functional governance council, with member representatives from across the entire company – business units, marketing teams, service organizations, and product organizations. They meet on a regular basis to share the learnings, and to make sure that the learnings become embedded within all company processes.

Next we talked about the lessons learned from listening to what is being said about the company in the marketplace and from deciding how and when to engage in those conversations. As many other successful Hyper-Social organization CMO’s told us, they do not always engage. Listening is incredibly important, but often times hearing, learning, and acting upon what is being said are the real keys to success – not direct engagement. It is also important to realize that in this new world, notwithstanding that you can have a common brand spirit, you cannot really have a singular voice of the company anymore. At Dell they have 100,000 team members who are experts in what they do and who will speak out in their own voice.

We also spent a fair amount of time talking about how best to measure the impact of social media and community initiatives – especially in view of the recent announcement that Dell sold $6.5M worth of products through their Twitter channel last year. Obvioulsy being engaged in social channels such as Twitter is not all about generating revenue (although that is a nice side effect). At Dell they try to gauge many other things, including level of engagement/connectedness, sentiment, the value that they are adding in the customers’ buying decisions, and whether they add value in how customers utilize their technology better.

Lastly we talked about some of the recent changes that Dell made to their IdeaStorm environment, and how they felt the need to expand their successful online suggestion box concept with directed and time-bound innovation jams called Storm Sessions through which they ask the community questions in real time, sometimes for days, sometimes for weeks, and sometimes for hours. They have found this real time learning capability, which they use both inside and outside, to be extremely powerful.

Other things that we discussed include:

• The importance of assigning roles to employees who engage in social media – making sure, for example, that technically unqualified employees do not attempt to respond to tech issues
• The challenges associated with integrating acquisitions within your corporate culture (specifically the acquisition of Perot Systems, which increased the number of employees at Dell by 40%).
• How making the social part of the fabric of the way they do business changed the way they think about market segments – thinking more about customer clusters or tribes rather than classic demographically based segments
• The importance of ratings and reviews in leveraging the social as part of your business
• The two types of customer interactions that happen online – disgruntled ones where you need to turn their sentiment from a negative to a positive, and fans, who are brand amabassadors and who you want to engage to influence the influencers
• The importance and risks of status in communities
• How talent acquisition shifted from looking for people with existing expertise to people who can develop new capabilities

As usual, you can listen to the full podcast below.

CMO 2.0 Conversation with Erin Nelson [ 48:44 ] Play Now | Play in Popup | Download (18347)

I had a very insightful CMO 2.0 conversation with Christa Carone, the CMO at Xerox. As with many other CMO’s I interviewed on this site, Christa has had a pretty long tenure at Xerox – 14 years to be exact, with the last 1 1/2 years as CMO.

Being the CMO at Xerox is a unique position in that the company is in the business of helping its customers market themselves better. So not only do you need to market your company, you also need to serve as a best practice for your customers – you need to walk the talk.

Early on in the conversation we talked about the dramatic changes that social media brought to customer communications and go-to-market strategies. Christa described how Xerox is very active in social media and how they have a real cross-functional approach to social marketing. They found that the cross-functional team that they put in place, which consists of existing social media enthusiasts, is keeping a much higher level of energy than typical cross-functional teams. Part of the reason for this is that they enlisted people who had a personal passion that they could now put to work on behalf of their company.

They obviously listen to what is being said about themselves, and they pay a lot of attention to what conversations  to participate in, and perhaps more importantly which ones to stay away from – realizing that sometimes participating in conversations can hinder more than help. An interesting problem that they face in listening to what is being said about them is that the term Xerox is often being used as a verb and returns a lot of content that isn’t relevant to them.  They also get the fact that sometimes you can start a conversation on your own platform, but that often times conversations already exist somewhere else and that in these cases it is better to engage people where they are rather than try to attract them to your own environment. As Christa said, you can build it, but if nobody shows up, you are not getting any return on your investment. Unfortunatelly, and according to the results of our yearly Tribalization of Business Study, most companies do not realize that – resulting in many dead company-sponsored forums and communities littering the web.

At Xerox, they encourage every employee to become part of the voice of the company. They developed friendly guidelines that empower employees and encourage them to use social media on behalf of the company. By tapping into employees’ passion they are achieving a level of virality with new product launches that they never saw before. In order to do this they had to give up some control, but the benefits are tremendous.

Next we switched the discussion to some more traditional marketing issues – including how to deliver a consistent brand experience through a complex distribution channel, and the impact of the economic downturn on the marketing mix.

Xerox has over 10,000 resellers and more than 6,500 authorized sales agents – making for a lot of customer touch-points. While they are incredibly disciplined on branding, they, like everyone else, are losing some control of how the brand is being perceived by the customer. What perhaps keeps  the brand perception across all those touch points the most consistent is a shared passion for the brand by both employees and channel partners.

The economic downturn and the associated reductions in marketing spent has had three major effects on Xerox’ marketing mix. First they doubled down on cross-media customized content (one-to-one) as part of their direct marketing campaigns – dramatically improving their rates of return from their target markets. Second, they redefined marketing programs for which they had long standing contractual obligations like sports sponsorships – turning them into business functions where the customer hospitality actually has a business purpose. Not only did they get business value from it, the hospitality piece allowed them to strengthen the relationship with their customers. Third, and they are still working on that, they developed an integrated communications/messaging platform that has tentacles across all lines of business and that is more than just a tag line or ad campaign  for the company.

Another interesting part of the conversation was when we talked about how Xerox transitioned from being a research lab-driven bastion for innovation to a customer-driven innovator. They still have their research centers, but even the researchers get out of the labs and participate in the periodic “dreaming with the customer” sessions that are now at the core of the Xerox innovation process.

We closed the conversation by talking about the need for new marketing metrics in this new socially-enabled business world. As some other CMOs said in previous CMO 2.0 Conversations, Christa reminded us that there is a certain level of subjectivity that goes into what we do in marketing. There is this gut check that says that something’s working, especially when you are looking at brand based marketing that is not intended to have a direct and short term revenue-generating objective to it.

Other things that we discussed include:

• The role of one to one communications in marketing
• The challenges associated with shifting marketing resources to social media marketing (discretionary budgets vs. headcount)
• How to use Facebook as an extension of your employee communications strategy
• How to strike the right balance between being taken hostage and spending the right amount of energy with those people who have the largest social media megaphones
• The importance of surrounding yourself with people who can make good judgment calls on behalf of the company
• The changing role of market research in defining the marketing mix
• The importance of employee passion in getting things done

As usual you can listen to the full podcast of the CMO 2.0 conversation below.

Standard Podcast [ 55:17 ] Play Now | Play in Popup | Download (9762)

My CMO 2.0 Conversation with Larry Flanagan, the CMO at MasterCard was a good one.

As is usually the case with these interviews, Larry started off by giving us some context to the career that led him to become CMO at MasterCard – in his case a background that includes a stint in the advertising business, as well as client side experiences with Proctor & Gamble and L’Oreal, where he was involved with major acquisitions. He joined MasterCard 13 years ago when the brand was in dire straits, and became CMO 5 years later. Not surprisingly, one of his main yardsticks in managing global marketing campaigns for MasterCard is Marketing ROI.

MasterCard has an interesting and fairly complex business model. On the one hand, they deal with partners, for the most part banks, but also merchant partners and non-financial institutions, who are basically franchisees. On the other hand they deal with consumers, who are the carriers of the cards. That makes for a business that is not just into B2B or B2C, but also into B2C2B and B2B2C – resulting in interesting and unique challenges as it relates to balancing the marketing mix and branding.

We then talked about the challenges associated with delivering a consistent brand experience when you have as many customer touch-points as MasterCard has – most of which are not in the company’s control. Brand is especially important for MasterCard as it is fully intertwined with the value propositions to their partners. At MasterCard, just as is the case with many other companies, branding has undergone dramatic shifts over the last decades. Larry described how branding went from being a process that consisted of a one way dialog in which companies told the consumers how they should think about the brand, how it’s differentiated from competitors, what the key benefits and value proposition are, to a many-to-many process in which the brand exists in the consumer’s daily experience, and is influenced not only by what the company says, but also by what is being said in consumers’ social networks, and what friends are telling them. Larry calls this a consumer inside-out view of the brand – one in which the brand truth lies with the consumer.

What that means for marketers is that they have to think differently about the channels through which they try to influence consumers. Sometimes the best way to have a dialogue with the consumer is through third party influencers and stake-holders who enjoy a high level of trust within their communities and networks.

In Larry’s view, social media and digital technologies have ignited a revolution that has leveled the playing field between individuals and corporations. In a way, it has enabled word of mouth, which has always been one of the most successful means of influence and decision-making, to become word of mouth on steroids, with everything being amplified and traveling much faster than before. That is true in all aspects of business, not just in marketing, but also in the way we recruit and manage talent, and how job applicants select the companies they want to work for. And while we may not fully understand the long term impact of social media on our business – one thing we know for sure is that as companies we have to be part of those conversations.

One of the challenges facing marketers who are investing in these new channels and leveraging these new-found opportunities to engage with consumers, partners, and competitors, is how to measure the impact of those programs, and how to attribute value to all those new behaviors so that we can influence the ones we want. Clearly there are no good models out there to do that and Larry believes that many companies will develop proprietary models.

We then talked about an issue that is very specific to the financial sector, yet applicable to all industries – that of trust. It’s no secret that the last economic downturn have severely damaged the trust that consumers have in their financial institutions. When you are hit with a trust confidence crisis like this – how do you overcome it and how do you regain that trust? According to Larry, the key to overcome this is by first listening to the marketplace and truly understand what is going on. Next is to engage with the marketplace in a manner that is transparent and value driven. Specifically for financial services companies that means convincing consumers that they want to make their lives easier while not hiding the fact that they are for-profit commercial institutions and not charitable organizations.

Other things that we discussed include:

• The changing role of reputation management in a social media world
• The importance of listening to what is being said about your company and how to select the conversations in which you want to engage
• The skill set of people needed to successfully lead you through the current changes
• The importance of mobile applications in the marketing mix
• The role and valuation of impressions and engagement in paid media, earned media, and owned media
• The balance between global/local needs in the marketing mix

As usual, you can listen to the full podcast below.

Standard Podcast [ 46:35 ] Play Now | Play in Popup | Download (5838)

My CMO 2.0 Conversation with Gail Galuppo, the CMO at Western Union was both fun and refreshing. Talk about the challenge of being in charge of a legacy brand that totally had to transform itself, with the added complexity of serving 15,000 distinct customer communities. Not an easy task, for sure, but one that Gail and her team seem to enjoy thoroughly.

As usual we started off with Gail giving us some context by describing her background. In her case, she learned to put the customer at the center of all decision making while being trained on Six Sigma at GE Capital. She then had a career that took her from financial services to retail and back into financial services and which allowed her to experience various places worldwide. At Western Union,  she deals with offices in 202 countries and 400,000 retail locations – six times as many retail locations as McDonald’s, Wal-Mart, Starbucks, and Citibank combined. Talk about a challenging footprint to deliver a consistent brand experience worldwide. As mentioned earlier, they serve 15,000 distinct customer communities, who behave very differently from one another – from Ghanaians in France, to Kenyans in the UK, Filipinos in Dubai and Guatemalans in the US – just to name a few. Their customers are work emigrants who send money back home.

The first marketing challenge we talked about was that of international marketing – how to operate as a global brand, while being relevant to your local communities. The job gets further complicated by the fact that even within their distinct customer communities, there are fundamental differences in needs, expectations, and lifestyles. A migrant from Puerto Rico who immigrated to the US 30 years ago has a very different lifestyle and other needs than one who’s in the country for 3 months or 3 years. And if you thought that was it – think again. They also need to appeal to both senders and receivers of money. With this many permutations and message requirements, nobody could blame you for having a marketing conniption. The way they resolve this seemingly insurmountable and massively expensive problem is in two ways – through a hyper-national brand campaign based on common consumer tribe attributes for all immigrants worldwide combined with a hyper-local set of programs focused on the separate customer communities within each country. Worldwide, their research found that the common attributes that binds all immigrant customer tribes together are pride, sacrifice, adventurism, dreams for their family members, positivity and can-do spirit. Based on that they created the Yes! campaign, the first global brand campaign for Western Union. At the same time they also continue to celebrate the differences between their consumer tribes by having hyper-local programs (like concerts with bands from their native country) that are led by people from those consumer communities – so for example, they have Chinese, Kenyan, and Togolese employees leading the local marketing efforts for those groups in France.

It would be interesting to see if you could harness this consumer tribal behavior  into a true global online community. Members would be attracted to the community by what unites them worldwide and would remain in the community by what makes their own tribes unique. They could hang out in sub-communities with their own people and help one another get adjusted. Western Union could strengthen the relationship with their customers by recommending community-specific products, and services, and by providing advice. From a technology enablement perspective it certainly would work as 90% of their customers have cell phones and are over-indexed on the Internet – the community would have to have a strong SMS component to it.

Another interesting aspect of the Yes! campaign is that the primary audience for the campaign was not the actual customers, but the employees and the Western Union partners who operate the storefronts.The effort, called “Project Galvanize,” was actually meant to change the culture from one where people were thinking of customers in terms of transactions into a much more customer-centric culture. When you have 400,000 customer touch-points worldwide, it’s hard to deliver a consistent brand experience if you focus on the transactions rather than the humans and their motivations.

We also talked about the role of social media in the marketing mix. While Western Union is in the early stages of leveraging social media and communities as part of their marketing – they do have a initiative on FaceBook called World In Motion – they definitely intend on expanding that. They are monitoring what is being said about them in social media, but here too they want to take this to the next level.

Lastly we talked about growth – and whether they focus on expanding the array of services for existing customers, or look for new markets first. The answer for Western Union is both. They are coming out with a series of new mobile applications for existing customers and are also getting into the small business market – not just the generic small business market, but that part of the small business market operated by immigrants. A new consumer tribe that probably would thrive online as well.

I can totally see how Gail thinks she has the best job in the world.

Other things that we talked about include:

• The details of the Yes! campaign and how they measured progress and success
• The importance of a values-based system in managing all the possible agent scenarios worldwide
• The role of customer analytics in marketing
• The importance of integrating marketing with customer service
• The challenges related to recruiting a true diverse workforce worldwide

As usual, you can listen to the podcast below.

CMO Conversation with Gail Galuppo, CMO at Western Union [ 55:01 ] Play Now | Play in Popup | Download (13716)

My CMO 2.0 Conversation with Ted Gilvar, who is the global CMO at Monster (and also a customer of ours), was a really interesting one as I have a fairly high level of familiarity with their business. It is also fascinating to see how some themes, even though they are sometimes called by different names, are recurring among CMO’s – even when they are operating in very different lines of business.

As is customary with CMO 2.0 Conversations, Ted started off by talking about his background and the business challenges he is facing. In his case he had a life-long career on the agency side before taking on the role of CMO at Monster 2 years ago.

Having come into existence by being a classic business model disruptor, we quickly started talking about where the next disruption might come from and how to leverage innovation to get prepared for it. Not surprisingly, the biggest shift on the horizon is the advent of social media and how this allows “the social”  to become part of the talent acquisition and development process again.

When they think of innovation at Monster, they think about it both from a product point of view as well as from a marketing point of view, says Ted. The biggest recent innovation on the product side was to add semantic search to refine searches – and that innovation came to Monster through an acquisition. On the marketing side, one of the more recent innovations was getting people to trial the service – even though Ted did not really call it that. That happened when they organized the “Keep America Working” tour, which offered a a free career fair to any employer who had jobs. In marketing, Ted believes that success cannot be predicted based on what happened in the past – and so you need to be willing to innovate all the time, even when looking at traditional marketing programs.

After this we spent a fair amount of time talking about the impact of social media on the talent acquisition and development process – a process that is inherently social to start with. One of the cornerstones of their social media strategy, community-based talent acquisition and development,  happened through the acquisition of Affinity Labs. They host affinity-based communities centered around professions – where members can network with like-minded professionals and get inspiration to help one another further their careers. With this community-based approach, they are transforming the relationship that they have with professionals from an episodic transactional-based relationship, where you interact with them only when you are looking for a job,  to an ongoing peer-to-peer community-based relationship. With the most recent recession, and people being forced through painful job/career transitions, the reciprocity that powers those communities – people wanting to help others and be helped – has been very strong. Other benefits of this community-based approach include:

• The fact that people’s profiles will not just have static career/job information but will now also contain some social context – which is very powerful.
• The fact that besides search based-matching, the process of matching people to opportunities now has an added social filter.

Another important lesson that we can take from Monster is that while they have a destination site, they also realized that they need to supplement that by being other placdes job seekers are, and so they syndicate their content to other sites. A federated approach like that allows them to get a larger share of attention from job seekers – and especially from the coveted passive seekers.

Next we talked about the impact of Monster audiences becoming increasingly digital on market segmentation and marketing programs in general. Not surprisingly, most marketing budgets at Monster are focused on digital marketing – giving you a quick and accurate sense of what works and doesn’t. Moving forward, community based marketing is expected to play an increasing role in the marketing mix.

Ted also spoke about the importance of social media monitoring and engagement as part of their marketing strategy. Seeing the fusion of marketing and customer service in social media was one of the most interesting learnings from engaging in those conversations, he said. If done properly they see social media based customer service as an opportunity to diffuse an issue before it becomes one.

We also talked about the importance of content in all aspects of marketing. When peer-to-peer communication is becoming the most important form of communication, companies like Monster need to think differently about content – developing it so that it travels in the networks that matter.

Ted also pointed to the fact that marketers should spend more time monitoring the quality of the content that they put out, not just the strategic fit. People vote on the quality of your content with their time and attention, and that is why you need to produce content worthy of consumption. It will be interesting to see the increasing role of user generated content as they go further into community-based marketing.

Other things that we discussed include:

• How they connect their traditional marketing programs with social media
• The halo effect of social endorsements in the recruiting process
• The potential benefits of adding hyperlocal community activities to their affinity-based communities
• The challenges of segmentation when you have a mass appeal and limited budgets
• The think locally act globally strategy for international markets
• The changing profile of people who staff successful marketing departments
• The dynamics of the emerging Gen Y workforce

As usually you can listen to the podcast below and soon we will be publishing a transcript as well.

CMO 2.0 Conversation with Ted Gilvar, CMO at Monster [ 59:10 ] Play Now | Play in Popup | Download (6657)

My CMO 2.0 Conversation with Marty St. George, CMO at JetBlue was truly enjoyable – especially since I am intimately familiar with the service they provide and biased in that I am a big fan of the company. JetBlue managed to turn what has essentially been a commoditized service by other airlines into a brand that is far from a commodity.

JetBlue’s original mission was to bring humanity back to the airline industry. So the first topic we tackled was how you can humanize a brand when there are so many employee touch points that can make or break that brand promise. It turns out that for JetBlue, the most important ingredient for success is having a values-based culture – one in which every single employee bases his or her actions on those values. Not surprisingly, the values that drive the JetBlue culture are fairly straightforward and easy to live by:

• Safety (the most important of course)
• Caring
• Integrity
• Fun
• Passion

All employees get screened against those values during the hiring process, go through extensive training on it after they get hired, and get constantly reminded of those values throughout their career. The end result is that everyone at JetBlue feels part of a big team, single-mindedly focused on improving the customer experience and by proxy the JetBlue business. Front line crew members are empowered to make independent decisions based on those values, and because of that values-based approach they end up with a self-enforcing culture that has built-in organizational learning. Off course, and in order to make true empowerment work for a company, you also have to have a tolerance for failure.

Marty further talked about the importance of transparency in forming a cohesive workforce – one that focuses on them (the customers) and not us (the employees). Briefing employees on how the business is doing and addressing their concerns in a timely manner is at least as important to JetBlue executives as it is to deal with investors.

Surprisingly (or maybe not because it is an effective marketing strategy in just about any other industry), one of most effective marketing techniques at JetBlue is getting customers to try the service. I say surprisingly because I would have never expected an airline marketing executive to talk about trials. But if you look at the All You Can Jet program (#aycj on twitter), where people can fly as much as they want during a 30 day period for $599, or their “JetBlue Cheeps” program (@JetBlueCheeps on Twitter), where they announce cheap fares between selected locations every Monday, that is exactly what they are doing – getting people to try the product. The results are very good because they are confident that once they get someone to fly with them, they’ll get them back again.

As usual we touched on the marketing mix impact of the fact that most of their audiences have gone digital. And since 80% of all JetBlue tickets are sold on JetBlue.com, it is not surprising that most of their marketing spend is online – with very strong marketing metrics as a result. Even though I would consider JetBlue a strong adopter of social media-based  marketing and customer service, Marty believes that there is still a ton to learn and plenty of unearthed opportunities for them (and others). Twitter is an especially successful channel for them – providing both a window into the brand and as said before a tremendous source for trials and customer service-based interactions. As they engage with disgruntled twitterers they constantly have to make sure that they don’t undermine the decisions made by empowered front line employees – they do not want twitter to become a court of last appeal. Fortunately that is where a values-based culture comes back into play – they can predict 99% of all decisions made by front line employees and reinforce those decisions where needed on twitter without having to check with those decision makers.

Lastly we spend some time talking about the importance of innovation as part of JetBlue’s success. While the innovation process is informal and organic, it is part of everyone’s job to think about innovation. They also have a few avenues for customers to get involved in innovation. According to Marty, one of the key ingredients to make innovation with customers and employees work, is to be a good listener and to always provide a response – positive or negative – to every suggestion. As with many other CMOs we interviewed Marty does not believe that you need a reward system to incentivize innovation – it should all be based on a social contract.

On a closing note, Marty mentioned the simple mission statement that he has for his marketing team, the 3 B’s – “Brand, Buzz, and Butts.” You got to love simplicity when it works like this.

Other things we talked about include:

• The pros and cons of adding social media information as part of your CRM profiles
• The importance of internal review teams to allow for lateral communications and sharing of best and worst practices
• Their social media monitoring and engagement process
• How you have to stay small as you become a big company
• The importance of customer privacy and the impact of social media profiles on that privacy
• How their JD Power award, which they have won for multiple years now, is going on tour to all their local centers, much like you would have a hockey trophy going around
• Other ways through which to create passion for your brand

As usual you can listen to podcast below and soon we will publish a transcript.

CMO 2.0 with Marty St.George, CMO JetBlue [ 58:43 ] Play Now | Play in Popup | Download (6148)

As usual I had a great deal of fun conducting this CMO 2.0 Conversation with Rob Spencer from Pfizer – this one focused on innovation.

Rob started out by providing some context around his job and the innovation processes he manages at Pfizer – although he does not call them that, preferring instead “collaborative problem solving.” He helps people from all over the company tackle challenges through electronically facilitated problem solving techniques – and he does that for all sorts of problems, not just drug discovery related challenges.

The underlying process used for problem solving is actually an old one – one that he calls diverge/converge. First you define the problem, you lay out some clear goals, and you broadcast it widely . You then set up a  review teams that includes technical reviewers as well as business people and you make sure that you have a good balance between people who will benefit from the solution and those who are willing to pay for any future solution. This latter concept is a very important one if you want to ensure that your solutions will get funded. Rob will typically assemble problem solving teams ranging from 200-4000 people, and occasionally will run problem solving challenges with tens of thousands of people.

Next we talked about the difference between collaborative problem solving and a social innovation process. You collaborate with people you know and they do it because it is part of their job. A social innovation process is one where people help you solve a problem without knowing one another and without it being a part of their job. Rob uses different language, based on Chris Anderson’s Long Tail concept, to mean the same thing. He talks about the head of business problem solving – which involves those people whose job it is to solve a problem in a very directed way – and the tail of problem solving – which involves electronic media to greatly expand the scope of people who may participate to groups whose job it is not to solve those problems. At Pfizer they use both the head and the tail, although there is a dominant use of directed innovation with the head of problem solving.

When we talked about breakthrough innovations at the edges Rob reminded us that innovation in health care is heavily constrained by the human genome – which is actually very small. Being bound like that by nature limits the innovations at the edges – most innovations in the health care space come from within the genome. This  is why directed innovations work so well in the pharma space.

An interesting concept that Rob brought up is the importance of individual thinking in problem solving. While there are great benefits to be had from collaborative problem solving, collective individual problem solving is an important component of innovation as well. At Pfizer they try to have people first come up with individual ideas and only after that do they ask others and groups to build on and review these individual ideas.

As we have in other conversations, we also touched on the role of rewards in innovation. Rob uses recognition instead of reward. Of course there is an inevitable dichotomy when you deal with employee teams, especially with those at the head of business innovation. For them it is their job and therefore they get both rewards (in the form of salary and bonus) and recognition for solving problems. That being said, Rob reminds us that it is important not to monetize what are essentially social contracts. Monetary rewards can also be very distracting from the core business challenges at hand and add unnecessary bureaucracy to the business environment.

We also spoke about the role of constraints imposed by government regulations and patent law. Without constraints you have runaway innovation with people falling in love with every single idea that is being proposed.

Other things we talked about:

• The importance of technology to scale innovation to the far corners of your organization
• The need for proper framing of the challenge that is being considered – and the need to constraint the problem as well as expand the scope of the problem
• The benefits of scale in innovation
• How altruism may be a level above the highest level in the Maslow pyramid
• The importance of details and hard work in innovation
• How you could leverage fear to trigger altruism, but only occasionally – as opposed to good behavior which can be done chronically
• The importance of flexibility to change in promoting and recruiting people

As usual you can listen to the podcast below and soon we will publish a transcript.

CMO 2.0 Conversation with Rob Spencer, Pfizer [ 56:01 ] Play Now | Play in Popup | Download (5754)