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Archive for the ‘Management & Leadership’ Category

Churchill ClubSAP’s CMO stated, “you are dead if you aren’t a customer led organization,” while Intuit’s CMO stated “Intuit’s marketing team serves as growth officers.” An interesting discussion ensued around marketing’s role in shaping the customer experience and the related organizational implications at the CMO Agenda 2013 Summit in Santa Clara on July 31, 2012. Distinguished speakers included Jonathan Becher (CMO, SAP), Nora Denzel (Senior VP, Big Data, Social Design and Marketing, Intuit), Anne Globe (CMO, DreamWorks Animation), and Lorraine Twohill (VP Global Marketing, Google).

One of the pressing issues CMOs face this coming year is whether or not their organization is truly customer centric. Two years ago, I covered the topic of the [Global] Total Customer Experience at the Smart Seminar on Globalization, which led to a feeling of deja-vu as I listened to the continuing customer experience challenges these CMOs discussed. In short, the total customer experience represents the consumer’s brand perception through the total accumulation of experiences that an individual has with the brand across every interaction point. As the number of touchpoints have increased, such as with the introduction of social and mobile, brands have less control over their message. Furthering this problem, poorly aligned and fragmented organizations can easily introduce policies and processes that result in needless friction in the user experience. This has upended marketing and created an organizational gap – who should own the total customer experience? Once that is determined, it is much easier to create brand experiences that go beyond simple utility and truly delight the customers with deep, emotional benefits that transform them into avid fans and loyalists.

Evidence that marketing is attempting to become more customer-centric abounded at the talk with questions raised such as:

  • Should marketing own P&L responsibility?
  • Will marketing disintermediate sales?
  • Does marketing have a role in defining product experiences?

There was considerable support behind making marketing accountable for P&L, while there was an appreciation that marketing would not make a hostile move such as taking over an organization role such as sales. What is clear is that organizations within the firm must work much more closely together to deliver a total customer experience across product experience and marketing channels, which means the separation of such roles will become murkier over time. Traditionally, marketing often assumes the role of being the outside voice of the customer even if there is no clear mandate in place. Now with a near consensus that organizations must pay attention to the total customer experience, the issue of organizational ownership has been raised. If marketing takes ownership over the total customer experience, how do we as marketers define the role and measure its success? Although there are few “C” level positions focused on customer experience today, the numbers are expanding and I expect the role to evolve. Perhaps more importantly, we may want to ask the question: what do we do while we wait for this new corporate position to be introduced into our organization, given we know its importance.

In an upcoming blog, I will address three things you can do to make your firm more customer-centric before your “C” suite is in order:

01. Include your customer in design.
02. Build a healthy relationship with your customer before setting sales targets.
03. Establish an agile marketing organization.

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Ever since his passing on October 5th, I had the strong desire to see where he had lived. I took the opportunity to stop by Steve Jobs’ house in Palo Alto before my Saturday yoga class nearby. The neighborhood is very tranquil and his home is rather understated for the leader of the biggest tech company in the world. An early morning jogger stopped by to admire the memorial. She said she didn’t even realize he lived there after all the years of jogging past his house.

Steve Jobs' House

Steve Jobs' Palo Alto Home

The memorial around his house was an emotional site to witness. Candles were still burning 4 days later and more half eaten apples than I could count surrounded me. An apple orchard surrounds his small yard. Something tells me he didn’t work to attain status, but rather worked hard to make his dreams a reality. He didn’t seem to lead the opulent lifestyle that he could have. A friend said that she saw him just 6 – 8 weeks ago eating sushi by himself on California street.

I wasn’t a die hard Mac fan from childhood. I was raised on an 8086 IBM clone that I saved for in 5th grade. I switched to Mac at the time that I considered the Windows OS to be in decline – the dreaded Vista years. Tired of the hassles and lack of reliability of Windows, I gave Mac a shot when a friend of mine at Apple extended his friends and family discount to me. Since then, my house is filled with beautiful Apple products that help me do a lot more of what I want to do.

I’m sad that he is gone, but nothing does last forever and Steve had an incredible run. He did things on his own terms and had a vision that will always captivate me.

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Electronic Arts LogoThere is a lot of emerging competition for traditional video game makers. For instance, Zynga’s estimated $10B valuation is larger than EA’s, yet the firm only has a tenth of the revenue in contrast and a possible over-dependency on Facebook. This almost sounds like the dot com era again to me. How will this story end?

This is the question that my class discussed with Peter Moore, President of EA Sports, when he visited my class on May 16, 2011.

Peter opened by saying digital is the growth driver in the gaming industry. The gaming industry is expected to grow an estimated a 5-10%* from the years 2010 to 2014; while digital gaming alone has grown at a 67% pace to $20B in just the last two years of business. It sounds great, but there is a big challenge – growth isn’t coming from a single digital source.

What is inspiring about EA’s approach to digital is that they are taking it on with enthusiasm – no heads are buried in the sand. Everyone knows that they adapt or become irrelevant. The digital transformation for EA means that they must face disruption on multiple fronts. New revenue generating business models include micro-transactions, downloadable console content, game add-ons and advertising; shifting revenue away from traditional physical disc sales. Platform proliferation dictates an expansion strategy that crosses just about anything that enables true ubiquity for the gamer; allowing them to play where and when they want.

With such a wide array of changes and challenges present, Peter doesn’t ignore the business case for making smart digital decisions across ecommerce, merchandising and device platforms. His rigor is demonstrated in the ability to deliver 30% margins as an operating business unit.

Peter Moore in John Schneider's Spring 2011 MGMT 162 Class

Peter Moore's visit to John Schneider's MGMT 162 course

With Peter’s second visit over the past year, one thing becomes evident. EA and the gaming sector are in for a wild ride. It is truly exciting to watch a large firm embrace Schumpeter’s theory of creative destruction; one that encourages the opening of new markets by tearing down traditional business models and placing emphasis on redesigning industry boundaries as new technologies introduce tremendous growth opportunities.

* Source: PwC Global Entertainment & Media Outlook 2010-2014

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Robbie BachRobbie Bach, recently retired President of Microsoft Entertainment and Devices Division, visited my Business Capstone class at Santa Clara University on February 11, 2011. Robbie’s experience spans an array of amazing accomplishments including his role as CMO of MS Office and leading the effort to bring Windows Mobile 7 to market this past Fall.

One of the most interesting discussions was related to the introduction of the Xbox. Robbie was tapped to bring Microsoft’s first gaming console to market at a time when Sony and Nintendo dominated that space. This may be hard to remember now that Microsoft is a dominant player with approximately 25% marketshare. Having no formal experience in console gaming, Microsoft recognized the prospective power of this space with respect to fulfilling the vision of “the connected home.” Microsoft knew they needed a seat at the table.

Robbie focused on two key principles for ensuring he had the right organization in place to enable innovation and commercialization of this new product. What struck me the most was his emphasis that “a more disciplined process might have killed the project” and so he really had to strike a balance that ensured they could think like entrepreneurs, while executing manufacturing and distribution on a global scale. The following are the principles he outlined in the discussion:

Separation from the core
Robbie and his leadership team made it clear that they would not join the effort to introduce the Xbox unless they had independence from corporate headquarters. They could not operate effectively under its structure and needed the flexibility to organize the way a game manufacturer operates, rather than the way a computer software company such as Microsoft historicaly operates.

Measuring the market and then setting internal goals
The first order of business for Robbie and his staff was to run game theory simulations to understand how the industry players might react when Microsoft made its debut. By knowing the potential outcomes, he was able tailor his go-to-market strategy. This effort followed with what he called the “3/30/300 documents.” First, he had a 3 page document outline the core principles of the initiative. Second, he had a 30 page document produced that outlined the execution strategy. Finally, the team produced a 300 page document that was the detailed specification for the Xbox console.

The rest is history. Robbie successfully introduced the Xbox in only 18 months from the time he received the assignment.  As a result, he was able to gain 25% market share and build the platform for subsequent console releases.

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Hulu's logoFor Q4 2010, ComScore reported that Hulu is watched twice as much as the 5 major TV Networks online combined. Just as this report was released, my class was fortunate to have Tom Fuelling, Hulu’s CFO, visit class to talk about the video rebroadcasting industry and Hulu’s market position.

Tom opened up with Hulu’s mission statement, “To help people find and enjoy the world’s premium content when, where and how they want it.“ A mission statement focused on the end consumer of their product was definitely expected; however, he went on to say: “as we pursue our mission, we aspire to create a service that users, advertisers and content owners unabashedly love.”

What a great statement for my class to hear. At the heart of competitive strategy is an understanding of the industry forces driving profitability and what, if any, resources and capabilities a firm can cultivate to establish a leading position. Born out of industry disruption caused by the ability to distribute video over the Internet, Hulu was somewhat formed as a defensive posture by Fox and NBC to protect themselves against YouTube and other sites illegally

Tom Fuelling, Hulu's CFO

distributing their content. That being said, Hulu understands no one wins if users, advertisers and content owners don’t all obtain value out of the venture.

Hulu, under the working title “NewCo.,” was laughed at when it started out due to the poor history of major media companies working together to deal with such type of attacks.  This was epitomized by its nickname “ClownCo.” From the time Jason Kilar, the CEO, started, the goal was to release a beta product in 10 weeks. To this end, he removed the cubes, modified the refrigerator to house a beer keg, moved out of the corner office and into a room adorned with whiteboards, and wrote a 1,100 word “culture manifesto” aimed at establishing a frugal meritocracy

The rest is history. They now have 30 million users and revenue of $260 million. And that is just 36 months after starting out in Fall of 2007. Ads on Hulu are 55% more effective than the same ads on traditional channels, making a compelling case for advertisers to pay attention to them. To sum it up, TechCrunch ate its words when it released an article, “Happy birthday Hulu. I’m Glad You Guys Didn’t Suck.”

Now Hulu has new challenges. The owners no longer fear YouTube the way they used to in 2007. Consequently, ABC has now created its own iPad App ton control its own distribution, and other networks are more hesitant to concede control of their most popular content to Hulu. And then there is the success of Netflix as a competitor.

Hulu is at a crossroads so to speak. It has already moved to a hybrid advertising and subscription model. Does it now move towards a cable operator model? How will international expansion work? Does it IPO and gain independence from the major networks? Time will tell, but it sure is great having the opportunity to listen to visionaries tell their story such as Tom Fuelling did in my class on February 9, 2011.

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Photo courtesy of GigaOM

Debra Chrapaty, SVP and GM of the Cisco Collaboration Software Group stated, “You must have the people, process, and technology in place to enable effective collaboration.” She intentionally held technology in third place because you cannot successfully utilize innovative technologies without the right people and processes in place. Her presentation was exceptionally well suited as an overarching theme for the Net:Work 2010 Conference hosted by GigaOM on December 9th. The following are three of the major themes I heard during the event.

Executive decision making and compensation models will change to encourage collaboration. Marc Benioff, CEO of Salesforce.com, is shaking up both his compensation structure and executive planning meetings to improve collaboration within the company. He stated that any employee can earn the same salary as an SVP within his organization moving forward. Compensation will adjust based on performance and he believe some of the best thinking in his company stems from those outside his leadership structure. Most interesting was his recent change to executive offsite planning meetings. He said the executive staff appeared as if they were the “Illuminate” going off to perform some rituals when an executive offsite meeting occurred behind closed doors. Now, he streams his entire offsite meetings live and provides a recorded version of it for all individuals to learn from and collaborate on during the year. His planning sessions are now “live” throughout the year.

Understanding identity and relationships is rudimentary at best with current tools. Jeff Bonforte, CEO of Xobni, discussed the point that explicit data, the type we find on a LinkedIn profile or Facebook page tells us very little useful information about a person. He went on to state, “Implicit data will redefine identity and relationships.” Xobni acquires this information by performing statistical analysis on the messages in a person’s inbox. Most important about the market position his young company is taking is that there will be a revolution in productivity tools when this much greater level of insight is revealed to everyone.

Segmentation matters in the enterprise. Segmenting user behavior based on demographic, ethnographic, and psychographic research isn’t just for establishing strategies to win in the consumer marketplace. A few interesting facts discussed at the conference include the point that Gen Xers are the most likely generation to want to start their own business and that only 33% of North Americans embrace use of video in collaboration tools versus Europe at 66%. These differences in behavior matter and they must be understood. Based on the statements above, I expect very simple and inexpensive collaboration tools to dominate amongst Gen Xers starting their business; whereas, more sophisticated collaboration tools with the use of video to perform better in Europe as a whole.

In wrapping up my summary of the experience, my favorite quote of the conference was that, “we are in the business of connecting people to people, not people to data.”

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Help WantedEarly in my career, when I worked at Seagate, they ran me through an extensive mentoring program where I had direct access to a senior director of the company. More often, I find that there is a tremendous shortage of mentoring programs and people acting like mentors within corporations.

Often the issue is that time is too short or budgets are too tight.

And far too often, managers are promoted and told to manage large teams while retaining the same responsibilities they held as individual contributors, and with no additional management training.  I frequently hear young managers saying “I remember how nice it was to be an individual contributor” or “I don’t like babysitting.”

How sad.

Before we all give up and say “if the company doesn’t care about mentoring, why should I?” How about we say, “let’s bring back mentoring, even if the company doesn’t recognize how important it is to its long-term success.

Here’s my help wanted advertisement that should serve as a reminder of the purpose of mentoring for any of you that have never had the privilege of being part of a mentoring relationship, or hardly remember what it was like, because it was so many years ago.

Help Wanted… Seeking inspired individuals that want to make strong connections at work.

Anyone that wants to apply, must support the following goals:

1)   Help needed educating individual contributors about the strategic direction of the company to ensure alignment between executive management goals and the work actually being done.

2)   Help needed taking top raw talent of the company and turning them into future leaders.

3)   Help needed creating deeper, more satisfying relationships at work to foster camaraderie and employee retention.

How does that sound?

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