Business Shifts Demand Capability Shifts
By Fred Geyer
Many business leaders are making important strides in transforming their marketing strategies to address changing competitive environments, emerging product and service categories, and evolving customer needs. They’re thinking in terms of solutions rather than products, stakeholders rather than customers, and redefining rather than upgrading. To be sure, these are significant advancements. Too often, however, leaders expect new marketing strategies to be successfully executed with old marketing capabilities. The fact is that great strategic plans have failed in the absence of capability shifts.
Imagine a company asking its print team to launch a digital marketing strategy. The SVP tells her team members they need to shift from targeting customers to engaging stakeholders; from one-way taglines to two-way dialogues; from a defined set of print properties to the limitless bounds of the online and mobile space. And they need to start demonstrating a solid return on this digital strategy’s investments by early next quarter. Could they do it? In some form, probably. Job retention can be a highly motivating force. But could they do it in an informed and effective way? Probably not. With the right building blocks, however, business leaders can advance their companies’ marketing capabilities to give promising strategies the support they need to succeed.
The marketing capabilities required to support meaningful business shifts fall into four key categories. The first is competencies. Marketers must have the right functional, technical, teaming, and leadership skills to build and activate differentiating customer solutions. Such skills can be introduced in variety of ways, including in-house development and external talent acquisition, but it is critical that they directly align with emerging business strategy. The next category is processes. Leadership must institute replicable approaches and frameworks for the range of value-creating activities that teams undertake to deliver customer solutions. Such processes will ensure consistent execution of these activities as teams adapt. The third is tools, encompassing the systems, information, assistance, resources, and metrics that teams need to work effectively. The success of tool-based capability enhancements depends largely upon leadership’s insight into the evolving needs of its various teams, and its ability to identify the tools that address those needs. The final capability category is organization. Without the structure, governance, roles and responsibilities, and mindset that enable accountability as well as decisive action, a business shift will flounder.
How to Get There
A capability buildout of this nature and scale requires significant time, energy, focus, and resources on the part of leadership, as well as buy-in and dedication on the part of team members. Prophet has identified five foundational methods for capability development, each of which will contribute to an emerging business strategy’s chances of success.
- Launch Pilots: Introduce new capabilities or enhance existing ones by starting with small, central, in-market impact examples for the rest of the organization to leverage. Take a highly regarded group that has bought into the new strategy and usher it through a high-visibility capability shift. Other groups will be encouraged and inspired by the pilot group’s success.
- Evolve Management Routines: Lead by example, starting at the top of the organization and incorporate the solutions-shift into the way the company does business. Leadership can much more effectively request change from others having proactively undergone change itself.
- Promote Knowledge Sharing: It’s often not sufficient to ask teams to change. Leadership must provide examples that demonstrate what successful change looks like. By sharing best practices from inside and outside the company, teams have a defined and proven roadmap to follow.
- Develop Talent: Sometimes the capability requirements of the current business strategy will translate directly to the new strategy, but in most cases a new talent development process is required. Talent can be fostered internally, hired externally, or some combination thereof, but either way, a system must be built to fill talent gaps and leverage relevant strengths.
- Shape the Culture & Mindset: Change can be intimidating. Employees may not know where they stand relative to the strategy, or whether their legacy capabilities will remain relevant as their roles evolve. To maintain focus, it is critical that leaders work to evolve perspectives and incite passion for transformation.
It Ain’t Easy
If shifting the capabilities of a company’s entire marketing function sounds daunting, it’s with good reason. This is not a small undertaking, and there are several common pitfalls that can undermine a company’s efforts. One is allowing internal focus on the transformation to obscure the company’s delivery of benefits to customers.
Customers don’t want to feel the growing pains of a strategy shift; they simply want to experience its positive impact. Companies should take care not to give customers a reason to look elsewhere while they work out the kinks.
A second common pitfall is adopting a “one-size-fits-all” approach to capability development across the business. Some teams may have a more relevant existing skill set than others, and teams will respond differently to various skill-building methods. Companies should consider each team’s individual circumstances when designing capability development plans. Another pitfall is failing to build the case for transformation internally. Leadership can be so eager to enact change that it forgets that individual team members were not part of the strategic process that brought the business shift about in the first place, and so may not understand why it’s necessary. Company leaders should work to build understanding, buy-in, and enthusiasm for the business shift if they want employees to be engaged with and energized by the change.
Finally, leadership can underestimate the difficulty of the new business strategy, resulting in insufficient resources dedicated to implementing it, unattainable timelines, and unreasonable success metrics monitoring its progress. It is critically important to understand and appreciate all of the requirements of a marketing capabilities shift, and create an environment that promotes its success.
But You Can Do It!
Marketing capability shifts are substantial undertakings, but they are also the lifeblood of a company’s longevity, sustained relevance, and competitive differentiation. Such shifts are not only attainable, they are often necessary. Take, for example, a global adhesive manufacturer with which Prophet has worked closely. The company’s organic growth had stalled, and historical geographic expansion was limited. Additionally, the firm had minimal insight into end users’ behaviors and decision-making processes, it was taking a reactive rather than proactive approach with competitors, and it didn’t have a distinct point of view in the market. Its leaders, and Prophet, knew that better marketing could drive strategic growth. In response, a three-year Strategic Marketing Transformation was embarked upon, using a marketing council that spanned the organization’s divisions. The council leveraged internal and external best practices to identify the competencies required to ‘win’, created a tailored way of marketing that would establish the company as a market-driven organization, developed tools and training to build key marketing competencies internally, and built processes to ensure those competencies transferred across the organization.
The result? Over 1,200 new products launched globally resulting in nearly $1 billion in identified revenue. Margin improvements of over $38 million resulted from a product portfolio management pilot. And specific development programs have been established for over 400 marketers across the globe to ensure continuous learning and sustainable growth.
To truly be successful in achieving similar marketing capability shifts and in-market impact, there are five guiding principles to which organizations should commit:
- Focus on a few key business opportunities and demonstrate meaningful business impact.
- Concentrate on critical capabilities, emphasizing speed and quality of execution.
- Ensure tight integration across all marketing transformation initiatives and leverage building blocks already present.
- Start with “spearhead” programs and scale over time.
- Align with Sales and Brand Transformation efforts.
Many business leaders understand that strategy and capability shifts are necessary in today’s dynamic environment, and that the time between such shifts is growing increasingly compressed. The challenge is in navigating and executing these shifts successfully. Putting the building blocks of competencies, processes, organization, and tools in place, and being mindful of the pitfalls, is critical to spurring transformation and the resulting business growth.
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