CMOs: Digital makes it your responsibility to challenge the business model

It’s the marketer’s job to stretch and challenge the business model of their organisation in the face of digital disruption in order to foster innovation.

Speaking at Forrester’s Summit for Marketing Leaders in Sydney today, VP and principal analyst, Shar VanBoskirk, encouraged marketing leaders to take more responsibility for ensuring their organisation employs agile working practices to meet modern customer expectations.

To do this, VanBoskirk pointed to four fundamentals behind building an agile, digitally-oriented organisation. The first thing to remember is that everything is a point of interaction, and interactions override process, she said.

VanBoskirk also advocated launching quickly then testing to improve, noting that “trial developments are better than blueprints”. Thirdly, businesses must collaborate with internal and external advocates, encouraging stakeholders and employees to contribute to innovation development.

The fourth pillar for Forrester is adjusting based on market conditions, and supporting a continuous development process. So why is all of this marketing’s responsibility?

“This notion of digital disruption is changing all dynamics of business,” VanBoskirk said. “Because you sit closest to the customer, it’s your job as marketers to stretch the business model of your organisation. It’s not about tearing the fabric of the brand, but letting yourself free of existing constraints of what your brand stands for.”

VanBoskirk then took attendees through key ways of making an agile organisation a reality.

The first was to foster a culture of digital innovation. As an example, VanBoskirk pointed to one Spanish bank which made every business unit responsible for innovation from their own staff and budget. This helped empower individuals within the business and lifted their pride in the brand, she said.

“They’ve also based innovation not on traditional ROI metrics, but how they will appeal to customers they try and serve,” she said.

Secondly, organise teams to deliver digitally enhanced experiences. “This is not about coming up with the ideal organisational structure,” VanBoskirk said. “It’s about creating a structure that has processes and communications in place to connect all stakeholders invested in digital strategy.”

To illustrate the point, VanBoskirk pointed to ING Direct (now branded to Capital One), which initially put in play an organisational ‘digital centre of excellence’ pulling in marketing, IT and other business resources together globally.

“ING found that this didn’t work for its culture, and didn’t create collaboration or creativity,” she said. “So the company disbanded it, put tech folks back in tech where they were more at home, but focused specifically on tools and processes that facilitate communications, which is what they hoped would happen in the digital centre of excellence.”

The third area of focus vital to coping with the digital age is to identify when and how to use external partners. As an example, VanBoskirk pointed to BMW, which offers non-owners the opportunity to drive its cars on an hour-by-hour basis but didn’t have the logistics to manage such a service. Instead, BMW partnered with rental car company, Sixt, to move its fleet of cars from one location to another.

VanBoskirk’s fourth piece of advice was to enable with technology. This is about enabling innovations through technology, she said. One way this was done by US public transport provider, MBTA, was by opening up APIs and location specific data to third-party developers. That has resulted in hundreds of apps now helping consumers to have a better experience on MBTA’s bus network, VanBoskirk said.

Another Australian example is Deloitte Australia, which introduced the Yammer collaboration tool to tackle the challenge of accessing best practices and thinking across the organisation. As well as improving agility and innovation, an unexpected result was that Yammer employees became more loyal and stayed 10 per cent longer with the business than non-Yammer users.

Read more: Deloitte CMO David Redhill on the new economy approach to brand participation

VanBoskirk said organisations must also underpin decisions with customer-centric metrics.

“This is not just tracking results from marketing programs. You have to underpin all decisions around innovation with customer-oriented measurement,” she said. One way could be tethering Net Promoter Scores results to the bonus system of all your employees, something Australian telcos, Telstra and Virgin Mobile, are doing.

As a final note, VanBoskirk said modern marketing ultimately comes down to acting on insights and best practices to make the customer experience better.

“As marketers, you build your reputation on what you are doing, not what you say you will do,” she added, borrowing a quote from Henry Ford.

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