CMOs must become systems thinkers and culture champions

There are few companies that are witness to The Great Digital Transformation of the world at the scale of IBM.

And as that transformation overtakes the marketing department — an epic collision of cultures like no other in the history of business — I envy the court-side seats they have seeing this play out across many different organizations, in many different industries, all around the globe.

So I was excited by the opportunity to interview John Kennedy, IBM’s Vice President of Corporate Marketing, on his perspective of this transformation — both with their customers and within their own organization.

Can you start by telling us a bit about your background and your current role as VP Corporate Marketing at IBM?

I’m IBM’s Vice President of Corporate Marketing, where I’m responsible for the company’s global brand development and marketing programs. I also lead marketing for IBM’s “Smarter Planet” initiative, which will reach its 5th anniversary this fall.

I started my marketing career at Procter & Gamble, where I worked on brands such as Downy, so my career has run the gamut from B2C to B2B.

I often quote IBM’s CMO study from last year stating that marketers felt they were facing enormous complexity and that many of them didn’t feel prepared for it. Would you say that’s still true today? Why?

Yes and what’s more, we’re still at the beginning of this journey. The digitization of business and the growth of mobile commerce are in their infancy, especially when you look at emerging markets. For a few years now, IBM has been describing this concept of the world becoming more instrumented, interconnected, and intelligent — that the planet is getting smarter. We are now seeing this happen.

“IBM has been describing this concept of the world becoming more instrumented, interconnected, and intelligent.”

Businesses are performing at new levels as a result of data — much of it customer data. This growing amount of data — which customers are generating from an increasing variety of sources — present a huge opportunity for CMOs. Marketers are analyzing big data to gain nuggets of insight into what customers want, which enables companies to deliver better products and services.

That changes the role of the CMO. So rather than focus on advertising campaigns and promotions, today’s CMOs can use big data to understand how people connect, what they desire, and what motivates them to make a purchase.

We’re seeing the marketing function change in three powerful ways. Marketers must get to know each customer as an individual; they must create what we describe as a “system of engagement” to create seamless experiences for customers across channels; and finally, marketers need to create a brand and company culture that are authentic and inseparable.

This is a big change from the past, when marketers planned and executed on the basis of aggregated demographics and broad campaigns. Big data provides marketers new visibility to their customers at the individual level, and to make marketing feel like a welcomed service instead of a promotional pitch. Content-oriented marketing models enable this shift since marketers are connecting with customers in new ways beyond demand generation and brand awareness.

“This is a big change from the past, when marketers planned and executed on the basis of aggregated demographics and broad campaigns.”

How is the organizational structure and talent composition of the marketing department changing to adapt to this complexity, especially around its increased dependency on software and data?

Data-driven marketing is still in its infancy and some industries, like retail and banking, have a head start. Don’t forget that marketing is probably the last C-suite function to be integrated with its own enterprise IT stack, playing catch-up to areas such as finance, HR and supply chain.

But CMOs are responding by integrating new kinds of capabilities on their teams. We’re seeing new job titles. Not just to analyze and model information, but to create insights in new ways and better understand preferences. Within IBM, my teams are now working much more closely with IBM Research on areas like front-office transformation and social media. We’re working with several scientists right now to understand the evolution of commerce and to improve our ability to quantify the business outcomes from some of these trends.

“CMOs are responding by integrating new kinds of capabilities on their teams.”

How does this affect the relationship between marketing and IT?

It is creating a new partnership that is becoming essential to the company’s performance. Technology is increasingly determining the customer experience in almost every industry.

This is driving CMOs and CIOs to align their strategies and create new working relationships. It’s also helping CMOs and CIOs gain new visibility into the new realities of their mission — CIOs must move beyond a “firewall mentality,” and CMOs must become “systems thinkers” so their ideas can scale across multiple customer sets, markets and countries.

“CIOs must move beyond a ‘firewall mentality,’ and CMOs must become ‘systems thinkers’ so their ideas can scale across multiple customer sets, markets and countries.”

Since last spring, IBM has convened hundreds of CMOs and CIOs at events here in the U.S. and Europe. What we’re hearing is that CMOs and CIOs know they must join forces. Because of their lack of technology training, CMOs are finally starting to look in-house to their CIOs to get a better handle on this new landscape. Conversely, more CIOs are looking for ways to work with CMOs as marketing continues to evolve.

So despite their different backgrounds and cultures, CMOs and CIOs need each other more than ever. We’re definitely seeing that.

How are these changes impacting the culture of marketing?

Certainly, marketers are maturing as “technologists” and you can see that from the kind of work we are doing.

But there is another another aspect that is getting more attention. Because of the transparency of social media, CMOs are beginning to realize that they have to become involved in building a company culture that’s in sync with the brand.

Every day, consumers are judging brands by what they do and what they say, and people don’t hesitate to tell their friends — or tell the world — about gaps between the marketing promises and the actual experience. So much of a company’s operations are shaped by its culture. As a result, we’re finding more CMOs engaged in discussions about the company’s culture and how this impacts the brand.

“So much of a company’s operations are shaped by its culture.”

If I may ask, what has that transformation looked like at IBM? Can you share one of the challenges and how it was overcome?

A cornerstone of our transformation is to make IBM a social business in every aspect of the organization. This improves our ability to collaborate and innovate, to stay connected with clients, partners, universities and other communities, and to train the next generation of leaders.

This dates back to 1997, when IBM recommended that employees get out onto the Internet, at a time when many companies tried to restrict access. In 2005, we encouraged employees to embrace blogging, and in early 2008 became the first big company to issue social computing guidelines for employees. Today, we have the largest presence on any social platform you can think of, and we continue to provide resources, training and encouragement for the global workforce.

It’s also transformed the way we reach out to clients. There’s a lot of noise in social media, and it’s a challenge to translate social touch points into sales leads. IBM has transformed its sales organization into a social selling juggernaut. In addition to lead generation and market basket technologies and active personal engagement on channels such as LinkedIn and Twitter, we use social listening tools such as sentiment analysis to identify opportunities and sales leads.

If you could offer just one, 30-second piece of advice to CMOs today, what would it be?

Reach out to your CIO. Help influence your technology strategy to migrate from the back-office to the front-office. Raise the awareness of your C-suite colleagues on the impact of a company’s culture on customer experience and therefore the brand. Be a role model for change and transformation since that’s the only constant on a smarter planet.

“Be a role model for change and transformation since that’s the only constant.”

Thanks, John.