From the beginning of here tenure with Crayola, Vicky focused on making sure that the company was capturing and articulating what the Crayola brand stands for, what business they should consider themselves to be in, and what higher purpose they might have as a company. Her current focus is still on how to make the brand and brand idea come to life as well as how to engage customers in a more personal, hands on, and emotionally relevant fashion than they would otherwise experience simply by buying the product.

It’s not as if Vicky had to go through a re-branding exercise, as the Crayola brand has always been very strong and most loved amongst moms for years. What needed to happen is to redress what happens with many fast growing companies — they lose sight of what they are about, why they exist, and what their higher purpose is, or as Vicky calls it, their true north. Successfully articulating their “true north,” which is well represented in the Crayola Inspire video, led to some fundamental business changes — exiting certain lines of business and redefining the corporate culture. This whole effort also positively correlated with the performance of the company.

In the past, Crayolians (that is how they call themselves) would have described themselves as being in the business of color or safety and trust. But those are simply brand attributes; they are not your higher calling. Crayola is about kids, and their mission and purpose is to help moms and teachers raise creative and inspired kids. It is also about allowing kids to express their ideas and thoughts in very visible and colorful forms.

Defining their “true north” was, of course, a cross-functional effort that was moderated by an outside firm. The whole process took three to four months, not including the internal and external launches.

Launching the new “true north” internally required them to look at how their new manifesto and brand needed to come to life across all parts of their business. Culture was a big part of that. First they re-articulated their shared cultural system of beliefs — making them all compatible with the new branding language. So instead of saying that they were “be risk-oriented,” they changed that to “last one in is the rotten egg,” or instead of being consumer-focused, they now say “best friends forever.” It’s all inspired by kids — how would a kid say it?

Extensive cultural and branding training and orientation programs for existing and new employees also become part of the mix to make sure the whole organization’s culture became aligned with the external brand. Office spaces were redesigned to look more like playgrounds, and employees were given the choice to have their phone greetings recorded by their own kids and their email signature pictures be pictures of themselves when they were kids. It’s not as if they want people to act like kids, they want the whole culture to be inspired by kids.

With so many different beliefs systems floating around as it relates to raising kids, it’s no wonder that understanding consumer cultures is very important at Crayola. It also drives how they communicate with their consumers — e.g., they never define success, nor do they ever tell parents or teachers what’s right and wrong. They help parents and teachers achieve their goals. The only strong point-of-view that they take in their communications is that creativity is really an important part of a child’s development — it helps with critical thinking, it helps with communications, and it helps with problem solving. Creativity is a skill that can be learned and is needed later in life to be successful.

Social media has affected Crayola in positive ways. There is now much more user-generated content available to help moms and teachers make critical decisions about educational methods and tools, and that only benefits a company like Crayola.

Trust is another important brand ingredient at Crayola. It reflects itself in the physical product — no matter where you put it, it will not have any toxic effects — as well as in the brand as a whole and in the internal culture — where there is a decision-making culture that engenders employee trust.

Other things we discussed include:

• How to actually launch with a re-articulated “true north.”
• The marketing challenges associated with the buyer and the end-user not being the same.
• How to measure how well employees keep living the cultural values.

The CMO role at Schneider Electric was created as part of an interesting transition — one in which the company transitioned from a corporate holding company with multiple sub-brands to more of a large well-recognized brand that can drive the economies of scale that allows for cross-organizational innovation needed to capitalize on fast-changing markets and opportunities.  During this transition they went from 130 different brands to 10 associated brands — brands that can keep using their name in association with the Schneider Electric brand — and a few that can keep operating on their own for competitive or market amplification reasons. Those brands that survived as associated brands had to be the number one or number two brand in their space.

At Schneider Electric they truly live their brand values as part of their organizational culture. With sustainability being a cornerstone of their brand they also happen to be one of the top 20 sustainable companies in the world. They gamefied their internal process of sustainability — resulting not only in a better bottom line, but also in a more collaborative culture, one in which people work more closely together across functional boundaries.

For Aaron, one of the most exiting changes in marketing was caused by collaborative technology — Facebook, LinkedIn, etc. Those technologies allowed for widespread intimacy — a contradiction of terms, but clearly a reality. What he is even more excited about is bringing those technologies in-house allowing his organization to compete not just on price but on agility.

Aaron has an interesting approach to making sure that new marketing channels, processes, or technologies do not lead to silos in marketing. First off, whenever something new comes on the horizon, he rarely forms a dedicated team Instead he tasks a trusted person from one of his competence centers to go and become an expert on the topic, and to report back to the team with recommendations in 3-6 months. If something becomes real he will always try to make it part of the genetics of the marketing organization, and he forces it through training and KPIs.

For example, everyone on his team is knowledgeable about SEO. He also tries to anticipate which technique or function will likely be cannibalized or eliminated if something new becomes real. He then gives that team the responsibility for the new function or the new tool — thus making cannibalization more natural and avoiding silos fighting with one another. Another technique to avoid silos it to constantly force people to have a much broader view of the marketing mix than their own area of expertise — be it demand generation, social, or events.

The advent of social media has forced a shift in marketing content development, one which Aaron describes as a shift from polished content, the way you would create a brochure, to more raw content, the way you would send an email to someone. Social amplifies raw content, not polished content.

Aaron is a firm believer in the premise that culture trumps strategy. At Schneider Electric they are trying to foster a culture that’s mostly driven by speed and a willingness to fail, but to fail fast. They also have a measurement culture, which makes for a self-correcting system. You screw up, you fix it, and you move onto the next thing.

If you do not have speed as part of your culture, and this is true especially for large companies, you can end up with situations where your strategic implementation cycle is longer than the strategy cycle itself — and you fool yourself if you think that your strategy is what the market is actually feeling.

Like with many companies that I recently interviewed, at Schneider Electric they try to have a unified corporate culture that trumps the local cultures, the age-related cultures, or any other culture layers that people bring to work.

The benefits of having a great culture include brand building, employee retention, and less failure of new employees.

Changing or creating culture in a large company is much harder than in a small company. The advantage that they have at Schneider Electric over other more unified competitors is that at those competitors it already means something to be a company person while it’s much more of a blank slate at Schneider Electric. They just need to get people to stop talking about their shared local history, great stories, and local lessons learned and instead focus on talking about the shared vision and how they are going to work moving forward.

In terms of talent acquisition, there is a generational aspect at Schneider. Many of the big problems that Schneider Electric has identified will not be solved in a year — they’re all 15 and 20 year problems. So knowing that a person’s peak in the corporate world is 40-50 years old, it is the 30-year-olds that are going to change the world.

Other things we discussed include:

• How to change a legacy brand and make it relevant while not losing the benefits of the legacy.
• How everything new in marketing, with the exception of the fax is additive.
• On the use of Centers for Competence for various marketing functions.
• The importance of depoliticizing failures and encouraging people to fail fast but document what they did so others can avoid it.
• The importance and real benefits that companies derive when they create cultures of trust.
• The need to measure people not just on KPIs but also on cultural traits.
• How to develop metrics integrated success metrics to avoid friction between sales and marketing.

From all the CMO’s I spoke with, Mads took perhaps the most unusual path to becoming a CMO. He started off as a fisherman, but then realized that the Danish weather was too cold for him, and fishing was actually way too hard. So instead, he went to business school, and started working at LEGO 22 years ago. Mads’ responsibilities do not only cover marketing, but also product development, innovation, and all of the commercial activities.

Digitalization and gamification of their consumer base, trends that have been accelerating since the first introduction of the 8-bit Nintendo machine in 1990, present both threats and opportunities for LEGO. Digitalization has affected all parts of their business, including marketing, retail, and the whole play experience. Marketing campaigns are now always integrated with digital dimensions, e-commerce has become a dominant retail channel, and LEGO so far has sold over 100 million video games developed in partnership with TT Games, which is owned by Warner Brothers.

A major innovation effort at LEGO right now is to bridge physical and digital play, as they believe that is where the future of play will be in the next 5-10 years.

One of the big changes that LEGO had to make as they became more digital was to accept that they could no longer strive for the same level of perfection that they had grown accustomed to in the analog and physical world — the speed of change in the digital world just does not allow that. That does not mean that they compromise on consumer perception and experience, and certainly not on child safety — they just became faster at new products iterations and allowed their corporate product development heart beat to increase significantly.

At LEGO they don’t consider themselves in the business of toys or games; they consider themselves to be in the business of play. That is why Mads uses terms like communicate, socialize, and play when talking about his customers, and not toys, or games. While the concept of being in the business of play was on the mind of the founding family, the Kirk Christiansen family, they did not articulate it explicitly until five to eight years ago as they were emerging from a business crisis. Starting to consider themselves in the business of play, instead of being in the challenging and non-growth toy business, proved to be a very liberating experience. The business of play is right up there with food and love — one of the most important activities in people’s lives.

At LEGO they feel like they never know enough about children and shoppers — agreeing that if they were to know everything there is to know about their customers it would lead to the company becoming arrogant.

While children may display very similar play characteristics across different cultures, the people who buy them LEGO products — the mothers, the teachers, the grandparents, etc. — do not — they are much more shaped by the local culture than the kids are. That makes for a complex marketing challenge for a global company.

LEGO is very much a substance brand — meaning that the essence of the brand is built around the experience and the longevity of that experience. In fact, LEGO products, which are not a cheap play experience, often get more than a 30-40 year lifetime — much more than most other products in the world. LEGO is also a legacy/heritage brand — one that many parents and grandparents grew up with as children. It stays consistent, yet relevant to modern times, by having a digital component as well as a storytelling component while also having a compatible building system and design style with the LEGOs from 20 years ago.

Next we switched to the topic of culture. As you can expect, the LEGO employee culture is a very  strong one — with people sharing a passion to make a positive difference in children’s lives. There is also a strong correlation between the internal cultural values and the brand values — and many employees consider themselves brand guardians, without being tasked to act that way by management.

While they do have a strong-shared beliefs system, they do not expect employees to memorize those. They think of their belief system as the smell in the bakery — if you like the smell of the bakery, you will know immediately that you belong. If you don’t, you don’t need a belief system to know that you don’t fit in. One of the ways the belief systems comes to life at LEGO is through storytelling. Storytelling provides the emotional bond that drives the world much more so than paychecks and orders. Employees are also encouraged to bend the rules and processes if it means improving the experience of a child.

LEGO is successful in multiple national and regional cultures because it appeals to a very ancient set of cultural traits — the need for humans to play and innovate. You can then add other cultural layers on top of that, like national cultural elements, or pop-culture elements (e.g., Harry Potter, Star Wars, etc.), but it is the deeper and more ancient human cultural connections that makes LEGO universally successful.

Another interesting aspect of play is gender based — boys like conflict play while girls like socializing. When boys see LEGO, they often ask themselves: What does it do? Can I kill anyone? Can I win over my enemy? Girls, on the other hand, are much more apt to ask themselves: Is it pretty? They don’t have the need for it to do something. They want to create platforms for social interactions.

Other things that we discussed include:

• The importance of content marketing in the marketing mix.
• The role of online communities and social media in the marketing mix.
• How they do not focus on the quality of the building blocks or the games first, but the quality of the experience.
• The differences between marketing LEGO in Western cultures vs. Asia.

After getting a degree in Physics, Peter started his career in marketing and sales at IBM, even though that was the furthest from his aspirations at the time he started to work. After stints at PictureTel he ended up with Nuance, where he has been for the past nine years — seeing it grow from $150M in revenue to more than $2B in revenue this year.

Peter believes that marketing has become more strategic in the past few years — especially in the tech sector, where it had not been seen as a strategic piece of the business on par with some others. It has also become much more technical — involving optimization, lot’s of data, and digital capabilities. However, fundamentally, marketing is still about connecting people with the right product.

Even in B2B environments, marketers need to realize that it is people who are buying products, not companies. Another huge change in marketing has been caused by social media, which allows a marketer to have a different and deeper kind of conversation with their customers. It also allows your customers to have conversations about you without you being there. In fact, engaging in social conversations may be the biggest sea change in the marketing mix.

Nuance has grown primarily through acquisitions, and in the nine years that Peter has been there, there have been around 65 acquisitions. The good news of being in constant integration mode is that there is a good relationship between marketing and IT — a requirement for success as marketing is becoming more and more technical. That being said, marketers also need to beef up their technical capabilities internally.

Part of Nuance’s brand is to humanize technology — they sell, after all, technology that can hear, talk, reason at some level, see you, and have memory and context, — so having a humanized brand, especially the ability to listen to social conversations, comes almost natural to them — it’s part of their DNA.

The role of marketers has really shifted to one of being connectors rather than communicators. Marketers no longer need to consider themselves the spokespeople of the company in market place but instead need to think of themselves as the company advocate within the company.

When it comes to branding, companies need to be honest — and honesty means many different things. It is about connecting the right audience with the right product — not some kind of made up hyperbole. Marketers need to communicate very precisely what the product or service does in the terms that are interesting and relevant to their audience. Honesty is also something marketers need to have when engaging in social media conversations — which at scale are really good at outing falsehoods.

Next we talked about the importance of culture in marketing — both employee culture and consumer culture. As many other CMO’s I interviewed recently, Peter is convinced that there cannot be a dissonance between the internal employee culture and what the brand stands for. You cannot come up with a brand attribute and make it happen — it has to be part of your true essence and your values for it to be perceived as real in the marketplace.

The way Nuance deals with the various cultures that come through acquisitions is by celebrating diversity — including diversity of culture — as part of their culture. They don’t try to strip new groups of their personality or their individual group culture, but they instead understand how that links to the overall corporate message and culture. Peter compares it to marrying into a family that comes from a different culture — you do not want to completely throw out the old culture. You want to bring it along and add it to the mix and change it a little, but also recognize the fact that there’s this broader thing that has a set of values and a culture that they are interested in.

Other things that we discussed include:

•  The importance to having a good core set of technical vendors as partners to marketing.
• Understanding the role of the marketer in social conversations — when to engage and when not to.
• The changing role of content marketing in the age of social recommendations.
• The challenges for marketers that have products embedded in other people’s solutions.
• The future applications of speech recognition, and the possibilities that open up when you combine speech recognition with data.
• How to walk the fine line of promoting “do good” applications as part of your marketing mix when you in fact help people with disabilities and other impairments.
• What to do when the culture of partners is different from your own culture.
• The importance of understanding consumer cultures as part of marketing.

Based on his background in neurosciences and marketing, we started the discussion around what the perfect academic background might be for understanding and predicting consumer behavior. We settled on a mix of neurosciences, behavioral economics, cultural anthropology, and the arts.

With customers becoming increasingly digital and social, and taking recommendations from peers while tuning out corporate messages, marketers need to focus on becoming conversationalists and think about the value they deliver within those conversations. Marketers also need to become better listeners — and listening does not just mean listening for what customers want so you can add it to your next marketing offer. They need to listen to what the customer really cares about and then decide whether or not they can add value by becoming participants in that conversation. Marketers also need to become better conversation starters. They also need to realize that the most important conversations are not necessarily those conversations between the brand and the customers, but the conversations among customers and prospects.

Now that the most important content about products and services flows between customers, marketers also have to think differently about the content they put out there — ensuring that the content they create is re-tellable and can make its way into those customer-to-customer conversations that matter. They also need to think differently about their target markets in order to identify these conversation flows that matter.

In the legal space, 76% of customers who seek legal advice will use online resources to identify an attorney that will suit their needs. Being a business that has traditionally been fueled by word-of-mouth, with lawyers recommending one another and passing clients among themselves for ages, it is surprising that they have not been innovators in helping fuel the customer word-of-mouth that now leads to a majority of their new business.

Marketers don’t just need to do a better job at listening — they need to find the actionable insights that may lead to better products, better programs, and better relationships with customers. Marketing in general, needs to become more insights-informed.

When it comes to market segmentation, LexisNexis has thrown away the firmographic segmentation model in favor of a behavioral segmentation model, where they are coupling a segmentation model based on needs, attitudes, and behaviors of buyers with buying personas. Those buying personas are then the starting point for campaign development.

There are 4 fundamental metrics that LexisNexis is focused on when looking at social channels — strength, sentiment, passion, and the reach of a particular customer in a particular social channel. The strength refers to the percentage of brand mentions in a social channel. The sentiment is the ratio of positive and negative mentions. Reach refers to how many people are talking about your brand, and passion refers to how passionate they are — are they, for example,repeatedly talking about you.

As many other CMO’s I interviewed recently, Steve too is convinced that the fundamental premise of employees being the brand ambassadors only works when there is alignment between the internal culture and the brand value. If there is a dissonance between the two, the difference between the voice of the brand and the voice that’s put out there to represent the brand will cause confusion in the marketplace. Eventually consumers will shut down the communication rather than try to understand what the brand stands for.

Steve believes that marketers have had to go through a harsh set of realignments and realizations as to the ownership of brands. You can put out information about what your brand stands for, but it is the consumer that will disseminate that information, either positively or negatively, and thus control a good part of your brand. While companies still have ways to influence their brand, the brand’s influence over its own brand is not nearly as strong as it was in the past. In that process, marketers cannot sit back — they need to go and participate, in an authentic way that represents the core values of the brand in the consumer-to-consumer conversations that happen about their brand in social media.

We closed the conversation on the need for CMO’s to have good balance: Balance among our efforts to drive demand for our products and services, balance to deliver on brand promise, and balance in terms of the amount of effort that you put in customer retention. These all need to be weighed against the appropriate channels that CMO’s need to leverage to achieve their business objectives. CMO’s also need to become strong partners with the CEO and translate strategy into fundamental tactics that will support the business.

Other things we discussed include:

• How law firms leverage social media as part of their business.
• Where potential new uses of social media are in the legal market.
• The importance of a having a well-developed content strategy.
• What the proliferation of consumer choices means to consumer behavior.
• The importance of keeping things simple.

The CMO survey, which has been conducted since August 2008 and happens twice a year, seeks to get the perspective from 500 or so top marketers in organizations on where markets are going, what companies are doing, what some of spending patterns are, and how companies track marketing excellence. While the interview happened before the new February results were published, you can review the latest results of the CMO survey here.

Here are some of the top findings that Chris picked  for further commentary in our discussion.

Social Media Spend

Social Media spend, which was at about 7.6% and projected to grow to 18% in the last survey is now at 8.4% and projected to grow to more than 21% in this latest survey, is clearly becoming a considerable chunk of marketing budgets. The interesting part of this budget item is that there are very few in-house people who are actually allocated against it. In August, that number was 3.6 and in the latest findings, that number came down to 1.7 people. So for a fairly sizable portion of the budget, there are very few people engaging with that strategy. Chris thinks that it could be that companies have not quite caught up in terms of building their human capital around this particular strategy.

Interestingly enough, many successful companies are not approaching social media as another marketing silo — instead integrating it as part of the other marketing functions (e.g., lead gen, thought leadership, innovation, customer support, etc.). Even though those companies are probably in the minority, and with the survey showing that most organizations are not well integrating their social media with their marketing strategies, it could account for why the number is lower than what it really is.

Big Data

The next topic we covered was that of marketing analytics. Companies in August reported they were spending 5.7% of their budget on marketing analytics and that number was projected to go up to 9.1% ( 6% and going up to 10% in the February survey). It is interesting to see a predicted 60% increase in marketing analytics budgets even though overall marketing budgets have only grown by 8.3% in the last two years.

Now keep in mind that this does not include budgets that might be spent in IT to support marketing analytics. Chris believes that when IT departments take over marketing analytics, they spend a lot time creating the infrastructure for it but then don’t spend an equal amount of time and effort on making sure that the information is getting used by decision makers. In fact usage is a problem with marketing analytics in general, with managers not using the analytics that are available to them or that have been requested 62% of the time. Chris is not surprised by this number, as her research in the past 25 years has shown a general tendency for managers to ignore market research. Interestingly enough, when companies have an evaluation process for the quality of the marketing analytics data, the date has a much higher likelihood of being used.

Performance Metrics

Performance metrics is another area of the CMO Survey that Chris finds interesting. The survey measures a lot of performance metrics, including growth, marketing leadership, and others. They do a really good job at looking at growth rates across multiple geographic areas — finding for example, not surprisingly, that companies were growing strong in China.

A real interesting exercise that they went through, and which Chris describes in one of her blog posts, is how much risk companies are willing to take with their growth strategies. As the economy has tightened up, they have not found an increase in low risk growth strategies, such as market penetration strategies targeting existing customers with existing products and services , but instead found an increase in more risky growth strategies — like launching new products or entering new markets.

Another growth strategy, found especially in the tech sector is — tech, software, and biotech, — through acquisitions. What is interesting in that space, as Chris describes in another great blog post, is that many companies are doing acquisition to acquire patents which they ultimately do not show an interest in developing — so in effect using acquisitions as a defensive strategy.

On the other performance metrics front, many of the metrics are pretty dismal. Customer retention is down, customer acquisition is down, and brand value is down. That trend continued in the latest February CMO Survey. Note that the numbers are still positive with companies still acquiring customers, but the fact that the growth has slowed shows that there clearly is a lot of negativity and uncertainty going around.

Marketing Spending

Despite the tough economic times that we are going through, a lot of marketing indicators are on the rise — including overall marketing spending. Not surprisingly,  the CMO Survey also found that investments in traditional advertising is on the decline. Somewhat surprising is the investments that companies were making in marketing knowledge, developing knowledge about how to market, although that number dropped in the last survey.

The CMO Survey also has a great set of interviews with CMO’s that can be found here.

Other things that we discussed include:

• How lack of integration of the various marketing channels leads to not being able to track the customer journey.
• How marketing analytics really should be supported by both IT and Marketing.
• Why Apple has consistently won the CMO Survey Award for Marketing Excellence.
• How customer priorities are shifting towards price and what that means for marketers.
• Top rated skill sets that marketers were looking for in their new hires.

We discussed the long term benefits of investing upfront in the employee base and how unfortunately, public companies, driven by Wall Street’s relentless search for cost-cutting,  cannot always make those investments. For Jim, there are three types of relationships: the company-customer relationship, the customer-employee relationship, and the company-employee relationship; which is where most people fall down. At SAS, they are convinced that if you can satisfy the last leg of that relationship triangle, the other two will work well as well. Or as their CEO, Jim Goodnight, says — “If the employees are happy, then the customer is happy and if the customer is happy, the business thrives.”

While the cultural SAS Way and attitude in terms of how they treat people  is the same all over the world, employees in different cultural regions have different expectations of what it means to work for an exceptional employer — hence the need to execute a little bit differently depending on where you are in the world.

Realizing that people spend the majority of their waking hours at work, they treat their employees as family. A great example of that was what happened when the global financial crisis hit in 2008. Instead of hunkering down and laying off employees, as most companies would have done, the CEO did a global webcast and said, “I want to tell you something right now: I promise you I will guarantee no one will lose their job. I just need you to look after the company, look after the expenses and continue to produce quality software and build great relationships with our customers.” As a result, employees did not rush to update their LinkedIn profiles, and instead watched out for the business — resulting in the most profitable year in SAS’s history.

Next we talked about the impact of customers becoming increasingly digital and social on marketing plans and strategies.  Gone are the days of marketing getting the message out. Instead marketers now need to focus on listening and responding to the sentiment of the crowd. Marketers no longer need to be the company advocate in the marketplace — customers will do that, — but they instead need to become the customer advocate within their company.

Next we switched to the topic of big data and big data analytics. Jim described the various big data problems companies have and mapped them out in a two-by-two matrix that includes Business Intelligence (BI) and Big Data BI, both focused on reactive analytic capability; and Big Analytics and Big Data Analytics, both focused on proactive analytic capabilities. Jim has a great blog post detailing the different big data problems that companies may have.

Big data didn’t just happen. We have always had it. What was missing was the ability to gain meaningful and actionable insights from it to allow us to proactively make future marketing, product, and customer decisions.

We also talked about the benefits of real-time analytics, which has recently become in vogue. When you can place real time analytic models in line with the process by which we’re communicating with the customer, amazing new  up-sell and cross-sell opportunities present themselves.

In a recent poll SAS did with 800 executives at their Premier Leadership Series conference, 81% of respondents said that they are not doing a good job in terms of real-time, fact-based decision making. While we are still in the early stages of maturity, big data is definitely going mainstream, often driven at the board level.

In order to truly capitalize on the promise of big data, CIO’s and CMO’s need to work hand-in-hand. A good way to make that happen is to make sure that the CIO and the CMO have shared metrics for success. If the CMO is measured on customer retention or customer response or cross-sell, up-sell, then the CIO needs to be measured on those same metrics, not uptime and fall within budget. Here again, we are in the early stages of seeing this marriage between CIO’s and CMO’s happen, with many CMO’s still going at it on their own.

Lastly, we talked about the need to develop a fact-based decision-making culture — one in which human decision making gets supported by analytics and data modelers. If the human decision maker gets replaced with analytics and modeling, then we are in for big trouble — just look at the derivatives and the subsequent financial collapse.

Other things that we discussed include:

• We briefly reviewed the results of the Social Workplace Trust Study that Human 1.0 produced with The Great Place to Work Institute, IABC and the Society for New Communications Research.
• How they do not differentiate between consumer brand and employee brand.
• The benefits of not being a public company with a quarterly time horizon.
• How SAS has a deep culture of innovation and what that means.
• How agencies are struggling with the decision to get into data or not — with the value of how you address the customer not being available in external data.
• How to leverage social media data as part of Big Data solutions.
• Metrics used by the SAS CMO to gauge progress and success.

Like many CMO’s I spoke with recently, David is a true marketer. He spent 14 years at Apple in a variety of marketing jobs, had a few stints with startups, and returned to the corporate world to run marketing communications for Nvidia and HP. He joined Lenovo 2 1/2 years ago.

Branding is one of the top three initiatives at Lenovo and so that was one of our first points of discussion. David explained how Lenovo, driven by the industry-wide consumerization of IT, where employees increasingly bring their own devices to work, is now trying to become a leading consumer brand — not just a B2B brand which is what they have historically been known for. To be a leading consumer technology brand means that you need to appeal and be relevant to the youth market. They are the ones that care about technology in an emotional way, and they are the ones who determine what’s cool and what’s not. According to David they are also the generation that cares the most about their brands — they expect their brands to not just enable them to do what they want to do, but also to share their social values.

To appeal to the youth market and be relevant to them, Lenovo focuses, not on the computer itself, but rather on what you can do with it. A lot of the attitude and personality of their latest branding campaign centers around celebrating the cool things that people can do with the technology. Interestingly enough, they can have a somewhat uniform campaign around the globe because they found that culturally youth have more in common with one another worldwide that they have with their local cultures.

Because consumers prefer to get their recommendations from peers rather than from companies, Lenovo had to rethink how they communicate with their audiences. David told a real cool story to illustrate his point. They have computers that will now boot up in 10 seconds and had this idea to throw a computer out of a plane with the computer controlling the parachute. If the skydiver could not boot up the computer in less than 10 seconds, there would not be enough time for the parachute to deploy and it would hit the ground. In the old days you would have faked the scene and produced the ad as cheaply as possible. They actually did the whole stunt and had two guys that had done a lot of films for MTV document how they did it. That movie went viral. So in effect they got people to watch the ad by having the meta-ad go viral. Pretty nifty if you ask me. Marketers now have to develop content in such a way that it will be used and travel as part of peer-to-peer recommendations.

Just as in past interviews, David too believes that you have to live the brand inside before you can credibly portray that brand in the marketplace. Their aim is therefore to have a unified employer and consumer brand.

David then explained his three principles of marketing. The first one being balance — with the need to balance between short term and long term impact. The second one is simplification — where the simpler something looks from the outside, the better it is. The third one is that you should always try to “wow” the customer — and they have to notice it. It has to stand out, and it has to be differentiated. If you cannot have the wow factor, don’t do it.

Next we switched to the topic of culture — a topic near and dear to Lenovo. Being a truly global company and growing through mergers and acquisitions all over the globe,  it has always been important for Lenovo to have a unified culture — they call it the Lenovo Way, which is embodied in the slogan “We do what we say and own what we do.” It is a culture of commitment and one steeped in the Human 1.0 characteristic of reciprocity. As with other successful companies that have strong internal cultures, Lenovo makes the four shared values that lead up the culture part of the annual HR review process.

As with most technology companies, innovation has always been a big part of the Lenovo culture. It has changed over time in two aspects. First, by recently becoming the leader in the marketplace, they had to start thinking about doing things differently. As a challenger you tend to focus more on execution whereas a leader you need to focus more on innovation — which also means having a different risk profile. The other cause for change is that they now want to rely on all employees and customers for innovation, not just the technology geeks in R&D.

As usual, we closed out the conversation with a discussion around metrics. At Lenovo they track the usual metrics for demand generation — number of leads, price point at which you’re selling, etc. For branding, which has a longer term consequence, they use two metrics — purchase consideration, with the goal of being in the top three, and brand premium, which looks at what percentage of the dollars you are getting in any market category.

Other things we discussed include:

• How content that you put out about your brand has to be genuine and authentic — and what that actually means
• How to let go of the need to control the message as a marketer
• How Lenovo leverages its 27,000 employees, who in many cases are also customers, as part of their marketing efforts.
• How companies have to focus on tribes rather than market segments
• The importance of keeping a balance between ongoing continuous improvement innovation and breakthrough innovations.

According to John, the main causes for the recent changes in marketing come from the digitization of business and the increased interconnectness of people. The fundamental change that marketing has undergone is that it has once again become a social science — it is about understanding how people connect, what they aspire to, and what motivates them to do what they do.

At IBM they use three lenses to understand how the marketing function is fundamentally changing — knowing the customer, knowing markets, and knowing audiences. In the past marketers were mostly limited to understanding their customers in terms of big demos and big psychographics. Now, big data allows marketers to understand their customer at the individual level. Big data also gives marketers the ability to serve market segments better — moving from a transactional focus to a much more customer-centric conversation around the benefits of products and services.  The last lens relates to the fact that both companies and customers now have a much higher visibility and transparency into one another’s business —  with customers who now being able to see behind the firewall and assess whether the way a company operates actually matches with what it promises through its marketing.

Like other leading marketers that I interviewed recently, John too believes that the brand is not just embedded in the promise that marketing makes about its products and services and how well those products and services deliver against that promises, but it is also embedded in the culture of the company — how the company actually behaves behind the firewall. Along those lines, IBM has done a lot of work in humanizing its brand by allowing the IBM brand to be defined by the IBMer. They see themselves as an intellectual capital company, with their employees delivering the value that gets created and offered for their customer.

Next we talked about the shifting advocacy role that marketers need to embrace. They increasingly need to take all the learnings that they develop about the customer and bring that back to the C-Suite rather than think of themselves as the corporate spokesperson in the marketplace. While marketers will continue to have the need to communicate messages to the marketplace, a majority of the content about a company’s products and services now flows through word-of-mouth.

Once again, marketers need to become more inter-disciplinary, and be concerned about more aspects of the company’s operations than they have traditionally been involved with. With the brand being impacted by so much more of the company’s operations, marketers need to think way beyond the four P’s when they think about their role. Not only do they need to become more knowledgeable, they also need to rely on more of their C-Suite counterparts to help execute the brand. And with marketing becoming increasingly technology-enabled, which is especially true of their relationship with the CIO.

Marketing in the future will not feel like marketing. It will increasingly feel like a welcome service. With marketers developing a better understanding of consumer behavior, both through social sciences and data, marketers will be able to deliver a whole new level of value to their customers. In order to so, however, marketers will need to develop a level of “digital empathy” — by not only contacting customers with the goal of achieving commercial results.

Following this conversation on the changing role of marketers, we switched to the topic of culture. According to IBM research, leading marketers are focusing more on corporate character than on the products they sell. As I said before, marketers have to become concerned with not only how a company comes across in its marketing, but how the company actually operates — and that is called culture, or in IBM parlance corporate character. Culture, of course, is the externalization of shared corporate values and beliefs.

We closed the conversation on the topic of measurements and ROI, which is increasingly tricky as marketing contributions spans both the range of hard things and soft things. Marketers are going to have to be careful to select those key analytics in this growing amount of information that best represent their contributions.

Other things that we discussed include:

• How market researchers need to shift their thinking from consumer segments to consumer tribes.
•  How to leverage social media and communities as part of marketing.
• The importance of listening to what is being said about your brand and gauge the sentiment of those conversations.
• The importance of matching internal tribes with external tribes.
• The changing need for talent within the marketing department.
• How the promise of gaining actionable insights from big data is still very much in the early stages.
• How to transition from a transactional customer relationship to one that is focused on the customer journey.
• How to balance an historic/iconic brand like IBM with having a brand that appeals to new generations and consumer tribes with the example of Smarter Planet as a platform to make that happen at IBM.

Aon grew primarily though acquisitions — 419 acquisitions in fact. They range from startups to companies that have been around for more than a century — making for a rich mix of cultures, but also resulting in a tough job to brand a unified company. They built the brand from the inside out and spent more than two years making sure that everyone inside the company lived the brand promise before embarking on an external branding campaign. Phil truly believes that the 62,000 Aon employees are the ones that have the biggest impact on their brand. That is why they made the five qualities of the brand (e.g., teamwork, innovation, etc.) also an integral part of their HR system — with employees being evaluated by the same characteristics that are important to their clients. They truly “humanized” the Aon brand.

They account for local cultural difference in marketing through a program called Jazz — in which a global marketing platform gets developed and locally customized. One such platform was the sponsorship of Manchester United, one of the most recognizable soccer franchises in the world. In fact, more people have conversations about soccer than about religion, politics, and family — hard to believe. They developed a global marketing program whereby a football would go from one office to the next until it reached London, but what happened at the local offices when a football reached that office was totally localized — some might have a feast while others might have a show with native dancers for their customers. So they achieved global consistency while staying locally relevant.

Aon has not quite reached the level where they can do heavy customer segmentation based on behavior-based segmentation, which is one of the promises of big data, but they do know what makes a difference at different stages of the sales cycle.

Phil then explained how they have been moving from a more traditional insurance conversation to one that is centered on what we term “risk intelligence,” or he calls “empowering people’s decision making.” The main reason for this move is that their overall product footprint is now too large for the brand to stand for any particular offering.

Content marketing is a very important element in Phil’s marketing mix. It allows them to let the customer see how they think, it furthers their image and reputation, and it helps explain the depth with which they are approaching the problems in both risk and people. When they think about content, they use the acronym CUTT. Which is, Is the content compelling? Is it useful to the person? Is it timely? Does it lead to a transaction, or is it information about things you actually sell?

Next we delved deeper on the topic of culture. Phil being an anthropologist by training, of course, means that he focuses much of his marketing thinking on human behavior. He looks for hierarchies and symbols that dictate behavior, he looks at what gives people status and power, and always tries to understand social roles. He is also very aware of consumer cultures, and how you can sometimes influence those cultures. Internally there is a global work culture at Aon, one that emanates from their internal branding efforts mentioned earlier. Shaping culture can be very effective — in the absence of rules or the absence of a management decision, for example, culture dictates you what to do.

Lastly, we talked about the need for measuring the impact of marketing, and the difficulty associated with measuring some of the softer elements of marketing that we talked about. Phil thinks that marketing cannot be faith-based and wants to be able to measure everything. He will not embark on a program that cannot be measured. Measurement-based marketing is the only way to achieve consistency in marketing. The soft stuff, like the fact that a 15 year old will always see Aon as a big company in their life because of the Manchester United sponsorship, has to be a bonus — it cannot be the reason you embark on a marketing program. Good metrics include unification of the company, number of leads created, awareness increase, renewal rates, shortening sales cycles, etc.

Other things that we discussed include:

• The importance of excellence in marketing and branding
• What it truly means to have a team-work based culture
• The importance of having a global brand on marketing budgets
• How marketing is a mix of quantitative analysis and creative
• The findings of the Social Workplace Trust Study

Next we discussed the biggest change that Martine has seen in the world of marketing – that of course being the shift of media into the digital space and social space. The pace at which the shift happened is astounding. The shift in technology, the shift is how people use it, and the rise of millenials all have forced marketers to challenge themselves to stay ahead of the curve.

Macy’s does an especially good job at integrating the digital space with the bricks and mortar stores. There are clearly no walls between the digital marketing efforts and the marketing efforts for the stores — it’s all one integrated branding campaign. They focus much effort in making sure that people have similar experiences online and in stores — something many companies could do a better job at. There are challenges in doing that — stores don’t have the rich navigation capabilities that online environments have, and online you cannot really recreate the richness of merchandising displays that you can have in stores. So they focus on taking best of both worlds and making sure that both worlds have the best of each other. They put technology in stores to enable customers to share potential purchases with friends, and they are making online navigation real easy by adding hints and rich media to allow the online customer to put their whole outfit together.

The next topic we tackled was branding – and how Macy’s deals with the fact that while it is a national brand, it also needs to stay locally relevant. They deal with that in three ways – through marketing, products, and local events. On the marketing front, they have dedicated regional marketers who have their own budgets. They integrate with national marketing campaigns but also add a local flavor. So, for example, while they may be marketing a national fall fashion event; California may be talking about sandals and sleeveless dresses for the fall while Oregon may be highlighting fall boots and coats. They divide up the country into cold, mild and hot for seasonal events. Another way to stay locally relevant and be a real part of the community is by celebrating local events. So, for example, they celebrate the Kentucky Derby by buying Derby hats and marketing those locally with a tie in — “Come to Macy’s for Refreshments after the Derby.”

Another marketing challenge that Macy’s faces is that while they are a national brand which has to stay locally relevant, they also need to stay relevant to different generations, different genders, different ethnic groups, and different type of buyers (e.g., value-conscious buyers vs. fashion buyers). They do this by making sure to balance the marketing calendar with big store-wide events that would appeal to all and other events that are very targeted to millenials, or the beauty customer; or just a men’s customer.

Martine then talked about how in the last three to four years they have been able to leverage customer data to come up with a better customer segmentation system. So, for example,  they can now focus on women that like to buy fragrances and jewelry versus the ones that like to buy for the home and children. They also have identified new types of customers, like the service seeker. Those are the people that want hands-on sales associate interaction. They want to be taught how to apply their makeup. They want someone bring them three different shoes, or they want someone to tell them “if you like this, you might also like this.” Another example is the practical spenders — those who, like me, just get in and out when we need to replenish something.

The promise of big data surely seems to be realized at Macy’s. Mining the rich data that they collect through many channels allows them to become more customer-centric and also to be able to focus more on the customer lifetime journey rather than just the transaction. That is especially powerful for Macy’s considering that when they start engaging with a customer at 18-19 years of age, they generally keep them for life. So, being able to follow a customer throughout their life is important — college, first job, first home, holidays, etc.

The last topic we tackled was that of balancing the iconic brand, which dates back 156 years,  with the need to develop a brand that also has a future and will appeal to future generations. Using the heritage of the brand allows them to instill trust, loyalty, and credibility in the mind of the customer. At the same time they are an entertainment brand and use their heritage in new and innovative ways to continuously be part of pop culture. A good example of this is the 85-year-old Thanksgiving Parade, which they have been able to keep new every year, with new licensed characters or new artists.

Other things that we discussed include:

• The importance of content and user generated content in marketing
• The importance of listening to customers
• How to leverage the fact that shopping is a social experience
• The importance of loyalty programs in the marketing mix

Next we discussed Jonathan’s views on the changes that marketing has undergone in recent times. For SAP one of the biggest challenges is the need to change the legacy perception that they are the big expensive German ERP vendor, when in reality they now play in five distinct product categories and have price points that are all over the map. Another big shift in marketing is that we have to move away from the notion that we can control the message to a mindset where we orchestrate the conversations. Jonathan also feels that being in B2B or B2C is an arbitrary distinction. Buildings don’t buy from buildings, people buy products from people, and so marketers need to focus on people, not B’s or C’s.

In order to change positioning in a world where you cannot control the message anymore, you need to take on an outside-in view more so than an inside-out view of the marketplace. That means developing an understanding of what people already believe and what they are already saying, and developing stories that describe impact that will be able to fit within the existing narrative and travel among networks of people who do not work for you. At SAP, they are trying to turn every single employee into a brand ambassador who can tell such stories, not just the marketing people.

People have always been social and making a buying decision has always been a social process. What changed is that the technology and media have become social, allowing the social for which human beings have been hardwired for eons to scale. People can now make social buying decisions about anything without having to rely on the vendors that sell the products. Jonathan quoted research that says that 80% of customers do not visit corporate web sites prior to making buying decisions – leaving marketers to wonder whether to put a lot of energy in their own web site or engage where people are. At SAP they do both, but they have a goal of having 50% of their own website content authored by third parties in the future.

Jonathan believes that in the future Marketing will be responsible for 5 things: represent the voice of the market, be the champion of the overall experience, the steward of the brand, the evangelist of the future, and the integrator/force multiplier. Representing the voice of market is bigger than representing the voice of the customer: It encompasses what your competitors are talking about as well as people who never bought from you.

Next we switched the conversation to a favorite topic of Jonathan, which we actually share – that of culture. Internal employee cultures can stand in the way of strategic initiatives and external customer cultures can stand in the way of successful product launches. Jonathan gave several internal examples of cultures that stood in the way of collaboration, and at the end he says, many teams achieve a local maximum without ever achieving a global maximum. We talked about the importance of shared beliefs and shared objectives in creating cultures that are more conducive for collaboration, and more acceptant of change, and which are requirements to make new strategies work. One of the strong shared beliefs they have at SAP is “All Brains on Deck” – meaning that when you see a problem, even if it is not within your area of responsibility, you own it.

Passion in the workplace is important, but if it is not connected to productivity it can be useless. Passion needs to be organized, it needs to be channeled, and otherwise it can become misdirected compared to where the company wants to go. Another reason why passion needs to be channeled and connected to productivity is because traditional hierarchical management structures are set up to measure KPI’s, not passion.

On the consumer culture side of things, SAP has started taking consumer cultures into consideration for their product positioning as well. Right now they do it primarily around regional cultures. For example, Americans like analytics for the exception management capabilities that it brings, while Germans use it to bring order to chaos. We also discussed the challenges with finding transnational tribes that might have a shared passion, shared interest, or shared pain – such as people who share a passion for sustainability worldwide. One of the issues is that if you do not get deep enough into the essence of the passion, you may be focusing on tribes that are too nomadic. So, you might have focused on the Star Trek tribe only to realize that when the show stopped, most people left the tribe. If you had focused on the Sci-Fi Tribe instead, then people, who were Star Trek fans and left, are most likely still part of the Sci-Fi tribe.

We finished the conversation by talking about the changing nature of measurements in marketing. While people at SAP are huge believers in analytics, Jonathan cautioned that not everything that can be counted counts and not everything that counts can be counted. Measuring the wrong thing can be as detrimental as not measuring it.

Other things that we talked about are:
• How to retrain internal people to tell compelling stories that can easily be retold.
• How to measure the success of social media exchanges.
• Why social should not be used as a shouting platform, but rather as a listening platform.
• The three rings of social.
• The changing roles of sales and marketing.
• The new methods for market segmentation.

The vision for the company came from Bill Kimpton, the founder of the company who loved travelling and staying in small hotels that had great food and good wines. From the get go, the way he managed was to empower his people to make sure that every guest had a terrific experience — no matter what it takes. That allowed them to rely on word of mouth to grow the business and to never have to focus on advertising. Steve considers it a good part of his job to make sure that the legacy of Bill Kimpton lives on as the company keeps growing and as they hire more people. His primary goal is to inspire people and make sure that the spirit of creativity is alive in everything they do — from the wake-up call to how to greet the guest at the front desk, how to say goodbye when they leave, and so on.

Kimpton is a very people-centric company which focuses first and foremost on the well-being of their employees. In fact, they don’t necessarily see themselves being in the hotel and restaurant business, they consider themselves being in the business of people. They realize that if an employee is not happy, then the guest won’t be happy and the investors won’t be happy. That is why in the last Fortune top 100 companies to work for, they came in number 16. They also realize that you can only empower people, and achieve consistent emotional connections with customers, by having a shared set of strong values, not rule books or scripts. In their case the values are: focus, passion, creativity, integrity, commitment to self-leadership and continuous improvement. All this employee-centricity leads to very low employee turnover, and very high investor returns.

At Kimpton, humanizing the brand is not an empty slogan — they truly want the personalities of their employees to come through and to be the representatives of the brand — not some faceless corporate personality. One of the important tools that they use to successfully achieve this is Kimpton University – where senior executives spend at least a quarter of their time training others. A formal mentor program in which at least 300 senior level managers are being mentored forms the other part of the investment they make in their employee commitment to continuous education. Another promise they make to their employees is that they’re going to have a safe workplace — one in which people feel comfortable coming to work and one where they feel comfortable with the people they work with.

Next we tackled the topic of creativity — which is hugely important for the company — dating back all the way to its origin. Interestingly enough, Steve is convinced that creativity can be taught. Creativity at Kimpton is focused on how to do things differently so that “when customers finally make their Kimpton stop on their journey of trying different places we want to blow their hair back, we want to stop them in their tracks.” It centers not just on big things but also on small things like what to tell the customer when they get out of the cab, or how to make the wake-up call more memorable. Everyone has to be creative at Kimpton — you cannot have employees wait for the marketing department to become creative.

Next we switched to some more traditional marketing topics — including branding. Originally Kimpton Hotels was branding every property differently — with its own style, its own restaurant and its own local environment. As they grew, and since they do cater to a business audience, they developed the need to provide customers with an umbrella brand. In developing their corporate brand they went from zero to 100 overnight and it actually resulted in a significant uplift in business — with customers now easily finding the boutique hotels they wanted, but with consistent corporate promises like being pet friendly, having kids’ programs and wellness programs.

If you doubt whether people-centricity can pay off, think again. 60% of all their first time customers are there because of word-of-mouth — that compares to 20-25% being considered successful in the industry.

Other things we talked about include:

• How to maintain a startup mentality in a 31 year old company
• How Kimpton built in guerrilla marketing as part of their culture
• A successful corporate wide ideation campaign they are currently running
• The importance of loyalty programs to focus on individual preferences

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

Many companies try to innovate by asking customers and employees for ideas – not a good practice when it comes to innovation. As Steve explains, when you ask people for ideas you end up with a whole bunch of really bad ideas. The signal to noise ratio in open ended idea generation campaigns is typically very low. The sheer volume of ideas that needs to be sifted through to find the good ones would stretch the organizational capabilities of most innovation departments – creating frustration among those who have to manage the process. Not only that, but the low number of ideas that typically gets implemented also frustrates the idea submitting community, who feel like they are not being listened to. So frustration all around and poor results – maybe it’s time for companies to STOP asking for ideas.

Instead what companies should do is focus on giving employees and customers business challenges – problems for which you are actively seeking solutions. A good example of that is when Netflix launched its $1M Netflix prize to get outside teams to help them refine their recommendation engine by 10%. Not only did they only pay for results, they also outsourced the failures that are typical with the serial trial and error nature of  innovation processes. In the podcast we discussed the differences between innovation tournaments and innovation bounty campaigns and when to use one over the other or when to set them up as competitive challenges versus collaborative challenges.

We also talked about the power of the crowds in innovation, and how crowds are notoriously bad at helping you find the good ideas among a mountain of ideas. If you use the simple voting up and down system, like the ones that are very popular in crowd-sourced innovation programs, you often end up with the most popular idea – not the best one. A better use of the crowd is to have them help you identify the duds – something they do really well.

It is amazing to realize that the main reason for new product and service failure is still “not meeting customer expectations.” While companies are getting better at doing market research, most need to change as their “market research really sucks.”  Instead of asking people questions that make their conscious part of the brain find an answer, which is not the part of the brain that makes buying decisions, companies should use anthropological techniques and metaphor based methods to uncover people’s unconscious needs. They also need to get out there and talk to non-customers instead on blindly focusing on their in-house customer data.

Motivators are another important factor to understand when managing innovation – and companies should understand the limitations of monetary incentives to stimulate proper behavior.

Steve closed the conversation by talking about USAA and how they found a way, through an innovation center for excellence and innovation ambassadors within the business units, to make innovation part of their DNA. This should be the ultimate goal of companies looking to change their practices. As an organization, you need to create an adaptability to change that will match the rate of change that is happening outside your corporate walls.

Other things we talked about include:

• How companies who are 2nd or 3rd in their markets need to change the game in which they are playing rather than to play by the rules of the leader
• VC like boards in innovation management initiatives
• How Innovation Centers and giving people 15 or 20% of their time to innovate outside of their area of responsibility is better for recruiting purposes than for actual innovation
• How measurements can kill your innovation initiative
• How you need constraints to foster innovation
• How expertise and innate cognitive biases can kill innovation
• The importance of culture in innovation

You can listen to this podcast on the Collaborative Innovation Community.

Dan has 30 years of experience managing global technology organizations, mostly within the financial services industry. Having first entered the job market when the debate between mainframe and desktop computing was raging, Dan has seen his share of technology innovation battles – which made it particularly interesting to discuss this latest battle between innovation and control taking place within most companies around adopting new technologies.

According to Dan, that balance between innovation and control has remained the hardest balance for CIO’s to manage. Between the increasing demands that organizations put on their IT departments and their CIO’s, the accelerating pace of change, and the ease with which employees can now bypass their IT department – that balance will become harder to manage, not easier.

The consumerization of IT, which refers to the phenomenon that consumer technology innovations are increasingly driving enterprise tools development, and also to the fact that many employees now expect their personal tools – their phone, tablet and home laptops – to work within their work environment, is clearly here to stay. The user experience that enterprise tools provide sorely lacks the experience that consumer services provide. Think of doing a Google search vs searching for content in your corporate knowledge management system, compare your corporate procurement process with the Amazon buying process, or look at how your corporate software provisioning differs from the experience you have in the iPhone or Android app stores. There is no comparison, and it is that difference in experience that leads to the consumerization of IT. CIO’s react to these forces in different ways – some say NO, and some put their head in the sand. Clearly neither one of those strategies is a workable strategy. Both will leave your users dissatisfied and relegate your IT department to irrelevance. CIO’s need to partner with key constituents and business unit owners and decide on strategic technical directions that match the culture of the company and deal with the risks associated with those strategies – human resource (HR) risks, compliance risks, legal risks, reputation risks, security risks, IP leakage risks, etc.

Risks are a thorny issue for many companies, and one that can stop innovations in their tracks. Many people, who by nature are averse to change, will hide behind potential risks, often unreal ones, to avoid having to deal with that change. In assessing risks, Dan suggests that people look at the Netflix manifesto about their culture, where they talk about a concept called the waterline. The way they look at decision-making and risk is that they think of their company as a boat, and they think of decisions being above or below the waterline. If a decision is below the waterline, then the risks of having something go wrong is much higher than if the decision is above the waterline.

We then talked about the changing role of IT and CIO’s as it relates to shifting their position from order takers to strategic business partners. CIO’s need to be the leaders who understand technologies and how they apply to the business. They need to be the ones that recommend and provide guidance on how to leverage social computing, mobility, universal access, cloud computing and “big data” as part of business processes.

Social computing should be on every CIO’s agenda, not because it’s a fad, but because eventually it will have to become part of every enterprise process and the systems that support them.

On the topic of measurements, Dan believes that there are two types of measurements – hard measurements and the anecdotal comparisons with peers. And while Dan is not a big proponent of hard benchmarks, which would require the ability to compare apples with apples, something that is virtually impossible in diverse organizations,  he does believe that comparisons with other people and companies in your industry are important. This makes sense in a competitive environment where the winner is the one that can stay ahead of the others. One of the most important measurement criteria for IT departments should be customer satisfaction, but that needs to be balanced with metrics that reflect the increasing strategic partnership that needs to exist between IT departments and the business units.

Culture trumps all and CIO’s should be thinking about culture as part of everything they do. It is what motivates people to do what they do, and it is what ultimately determines the effectiveness of all organizations. Dan believes that companies should listen to Daniel Pink when he says that people have three motivations, autonomy, mastery and purpose. They want to have a say in their destiny, they want to be recognized as a master in certain fields, and they want to be connected to a higher purpose. It’s important to have a culture that understands and promotes those values, both for your employees and also for your customers.

To create or change a corporate culture, you need to articulate where you want the culture to be, communicate it clearly with your employees, walk the talk, and reward and recognize behavior that supports that culture. The latter is especially important for IT departments, where metrics around on-time delivery and zero tolerance for failure have often stood in the way of creating a collaborative and innovative culture.

Dan ended the conversation with a few pieces of advice for IT professionals – don’t just focus on the bits and bytes, but focus on humans, their cultures and their biases; reach out to other disciplines like psychology and economics; think beyond your technical expertise when you think about the competencies that are needed to get your job done.

Well said.

Other things that we discussed include:

• How smart companies now deal with risks through a combination of education and guiderails rather than through policies alone
• The importance of e-discovery and archival systems in regulated markets
• The positive aspects of operating in regulated environments where everything gets recorded on business communications
• The importance for CIO’s to stay abreast of what happens to their industry by networking with peers
• How companies and individuals deal with innate human/cognitive biases like the confirmation bias

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

The first topic we tackled is that of marketing in a world where everyone, including executives, is increasingly overwhelmed with the amount of information that is coming at them. Tom is convinced that most executives need to pause and rethink their purpose and how they will execute that purpose. While the priorities of marketing have not changed all that much  - drive top line growth and grow marketshare -, those are results that come from understanding and feeding the hungers of your audiences and the customer insights, and from better defining one’s brand and how to deliver a differentiated value proposition. Marketing executives cannot optimize their way to success by measuring everything and everyone to death. They need to care deeply about their audience and create unique value that improves their audience’s lives. You cannot expect results from spreading messages all over the place hoping that somehow you will connect with the feelings of your audience – you have to really care.

Marketers also have to rethink their content, and develop it in a way that it will travel in those circles where buying recommendations are being made. That means that we have to understand what value people will derive from using the content we develop with others. After all, most people only do what they value – and that is true for making recommendations and reusing vendor content. Marketers need to switch from their traditional inside-out perspective and start looking at everything they do through the eyes of their audiences.

People need to realize that everything in the marketplace has changed – the amount of products and services is overwhelming, and the amount of information is overwhelming, buyers’ attitudes about how they filter and process information and how they are making their decisions has changed.

Next we switched to one of Tom’s favorite topics – branding. Branding is of course something that exists in the mind of a customer – it’s an expectation of value that gets created through interactions in the marketplace. Those interactions can include advertising, pricing, social exchanges with other users, packaging, financing options or interactions with company employees. As you can see, many of these interactions are happening with touch points that are somewhat controlled by the company. So to say that the consumer owns the brand is a fallacy. Tom wishes we would have a Deming-like figure in the branding space – someone who could influence how everyone in a company feels responsible for the brand.

About engagement, Tom said: “People at successful companies love what they do, they believe in what it is they get up in the morning and go to work to do every day. Secondly they love who they do it for; the’re interested in in their audience and what they’re all about and how to improve their lives and how to make things better. And the third thing, is which I call engagement, is that they like the process of keeping what they do and what they love connected to others: others’ interest and others’ values. They love the idea of injecting energy into their idea and bringing it to life for everyone’s benefit.” How is that for a definition of engagement? Much better than most definitions being bantered around in the agency space if you ask me.

Continuing on the topic of engagement, Tom described the three steps you need to follow to engage people – three steps that are described in more detail in his latest book “Opportunity Screams: Unlocking Hearts and Minds in Today’s Idea Economy.” The first step is you want to engage people’s conscious attention. How do you get someone to stop and think about what’s being presented? You do that by charming them and by providing some cue to value. Once you feed their hungers and you’re reflective of them and their self-identities, you entice them to participate. All they want to do then is believe, and you can help them believe in what you do by conveying purpose through your actions, by stimulating interaction and sharing like you discuss all the time. But you always have to have value and unfortunately most businesses don’t believe in the distinctive value they add to people’s lives.

You cannot have a conversation with Tom without talking about culture and so we talked about this whole notion that culture trumps strategy, and what that means for older companies that may not have ideal cultures to roll out new strategies. In older companies you often have what Tom calls cultural immune systems that end up blocking new ideas and new perspectives. Leaders need to be aware of this and be willing to take off their cultural glasses and expose themselves to new ideas (Note that we will be conducting a research project on culture and strategy in partnership with the Schulich School of Business at York University, email me if interested).

“Business is about people, it’s about culture, it’s about feelings, it’s a way to help people feel prosperity and well being. It’s not about numbers,” said Tom, and I must say that I could not agree more.

We talked about a lot more things than can be captured in this blog post. I hope you will find the time to listen to the podcast.

Other things we discussed include:

• How Drucker’s moto that business is marketing never materialized
• The importance of the last transaction on the brand perception
• How the expectations that we have from brands has soared
• The role (or lack thereof) of agencies in meaning making
• How engagement is not the same as sustained attention
• The resistance of middle management to cultural changes
• Ways to change corporate cultures that do not involve a near-death experience
• The importance of finding meaning at work and being able to bring passion to work

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

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

Grant has always focused on contemporary American Culture, making his knowledge a real treasure trove for marketers who are trying to understand people’s buying behavior rather than shoving products down people’s throat. His interest in economics comes from the fact that when you study American Culture, you quickly see that it comes from the interaction of culture and commerce.

Having so many definitions of culture out there, we started the discussion by defining what culture means for Grant. Forgive the technical nature of this part of the conversation (and also the fact that Grant was cut out for a bit – we my rerecord that part in the future), but being a new student of Culture, it was important to me. Grant does accept the classic definition of culture as presented by Geertz – which says that culture if a transmitted pattern of meaning embodied in symbols by which people communicate, perpetuate and develop their knowledge about and they attitudes towards life.

Grant then took us through the evolution of culture over time. In hunter gatherer societies, culture was very egalitarian, like language – everyone shared it and nobody had a disproportionate influence over it. In more developed and structurally more complicated societies with hierarchies, we saw the creation of elites who decide what meanings should be and what shape culture should take. In Western societies and all the way into the 20th century we had magazine editors, the keepers of mass media, marketers, and agencies that shaped public opinion and cultural meaning making. In the last 10 years, we have entered a new era, one in which the production of meaning and culture became more egalitarian once again. A kid with $2,000 worth of computer equipment in his parents’ basement can now influence public opinion as much as the elites do. A question in Grant’s mind is whether, with the democratization of culture and the emergence of the long tail, we may lose the centricity and shared-ness that Geertz was talking about and end up with a solipsistic world when everyone is their own universe. We both agreed that while it is structurally a possibility to end up there, we probably will never see that happen.

Next we talked about the importance of culture in business – and started with the example of Coca Cola, which without culture would be nothing more than sugared fizzy water. In the early days Coca Cola had the world to itself, with Pepsi not showing up for another 30-40 years. At the time, Coca Cola’s advertising shaped America’s concept of itself and even influenced how we think about Santa Claus. But then came the competitive phase , and a market crowded with alternatives. Brands now had to keep up with contemporary culture rather than shape it – you would pick a trend and ride that wave into mainstream acceptance. Now that world has completely gone as well. With culture coming from so many places, in so many forms, and lasting such a brief time. It’s like a perfect storm out there, you pick a trend and it’s gone before you know it. And so many companies end up engaging in a desperate game of catch-up, which means that they don’t really have any strategy at their disposal.

That is why Grant makes the case that every company should have a Chief Culture Officer (CCO).

We then talked about the role of agencies in the marketing and meaning making mix and how Grant believes  that  30 seconds spots are still powerful tools in shaping meaning. Contrasting a Volvo ad with the Ford Fiesta Movement program in social media, he argues that the Volvo ad did great things for the brand that could not be achieved in social media. In fact, and while the Ford Fiesta Movement was a brilliant program, it did not sell any cars.

Next we talked about slow culture vs. fast culture, and how most companies forget slow culture. Fast culture comes from the cool hunters who know only the hippest things. What they don’t understand is that 80% of all the meanings in our culture are relatively ancient – they come to us from the 19th or 16th century, or even beyond that. Focusing on the 20% cool hunting or fast meanings is what causes everyone to play the desperate game of catch-up he talked and to constantly repudiate their own brand.

I could have written a book with all the information that flowed during this conversation. You will have to listen to the recording to hear Grant talk about some of the other things we discussed, which include:

• How many companies have lots of CCO kinds of people on staff, but no-one in the C-Suite
• How agencies will have to adapt moving forward and how cultural intelligence is so important that you cannot outsource it to them
• How successful brands are a set of meanings that are exquisitely responsive to the consumer and delicately and brilliantly crafted by the tactician, the brander, the marketer or the ad agency.
• How brands are bundles of meaning that need to be manufactured and can be a conduit for sociality
• The lack of culture training in business education
• Whether co-creation of meaning making with consumers can work
• How the older generation had multiple group memberships while teenagers have multiple selves
• How social status no longer plays a role in American culture and how it was replaced by celebrity culture
• How Gen Yers get their security from their networks where we got it from the workplace

As usual, our conversation started with Paul giving us some background on his career. Paul spent most of his career as a technology journalist before he turned his whole focus to social media and published his first book, The New Influencers in 2007.

We then moved on and discussed the need for a B2B-specific book on social media. It was my experience that the lessons to be learned from social programs in B2C or B2B were the same – since successful programs don’t involve B’s talking with B’s or C’s, but people talking with people. While that is true at the highest level, Paul and his co-author Eric Schwartzman make a good case for why there is a need for a B2B specific best practices book, and they do a real good job in providing guidance to B2B marketers. The main difference in B2B and B2C marketing that calls for a different approach lies in the buying process, which is collaborative and deliberate in B2B companies vs. individual and often impulse-driven in B2C environments.

One of the most frequently used social tools in B2B environments are corporate blogs, and of course it does not take all that long to look around and see that many corporate blogs are failures – corporate-speak-laden web sites that fail to capture comments and viewers, or sometimes don’t even accept them. Paul argued that most failed blogs come from organizations that consider them, along with Twitter, Facebook and LinkedIn, as channels through which to promote corporate messages, rather than social environments in which people have conversations with one another. Not only that, but in a recent study of resellers and system integrators, they only found 15 companies out of 100 that actually had a corporate blog – making you wonder whether those companies feel like they have nothing interesting to talk about with their partners, customers, and prospects…

Next we jumped onto the online trust issues and how some people claim that you cannot trust what you hear online. While true that it’s easier to tell a lie or spread a rumor online than it is in person, it is very hard to get a lot of people to believe it for a very long time. The crowd will usually “out” those falsehoods and that’s the reason why you don’t have big myths and big hoaxes going around online.

Social media should never be a goal, according to Paul,  and you shouldn’t have a social media strategy. Instead you should have business goals and business strategies that may or may not include social media.

If social media makes sense as part of your business strategy, then there are a number of ways in which you can sell it to your executives. One is what Paul calls shock-and-awe, where you show executives how people are already talking about you in the marketplace, and how your competitors found ways to join those conversations where you didn’t. For those companies that may be smaller and may not have a lot of conversations going on around them, a stealth or guerrilla approach may be a better way to get going. Another way is to do market research and bring back an overwhelming volume of case study evidence.

Paul did not necessarily agree with my assertion that in most social environments we would eventually see the Facebook effect, where over time one community per topic becomes dominant. He believes that fragmentation in many markets will continue to exist and thrive.

You cannot turn your organization into a social organization from the top down only, nor can you become one through grass roots efforts without the support from the top – becoming a social organization requires support from all levels of the organization. There are many different variants in which organizations transition from hierarchical organizations into social organizations, and Paul took us through some of them.

We also touched on the risks associated with social media and how companies need to develop social media policies that are encouraging use rather than discouraging it, but also need to educate and train all their employees on what works and what doesn’t.

We closed the conversation by talking about Social CRM, a topic that Paul writes and speaks about frequently. Paraphrasing Paul, he said “at its core CRM is about managing relationships with customers and whether those relationships involve social media channels or not should be irrelevant – so the social is really just an unnecessary adjective.”

Well said!

Other things that we discussed include:

• An in-depth discussion on the differences between B2B and B2C marketing, especially as it relates to social marketing
• Crowd dynamics and how crowds tend to be smarter than individuals, as well as the pros and cons of crowdsourcing in marketing and innovation
• The importance of using guerrilla tactics and knowing when it can and cannot work
• A more in-depth conversation of what happened with Dell
• The impact of new communication tools and open communication on business performance
• The consumerization of new technologies and how many social technologies come into organizations through the back door
• The importance of having values and living by them in empowering your employees

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

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”

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.

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.

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.

We started off by having Don give an overview of his latest book, which came out last year. At a high level, the book deals with the evolving landscape of business competition and the changes that are caused by the rise of social media – with customers increasingly talking with one another.

In it, Don and his co-author Martha Rogers argue that while businesses operate under a set of assumptions that sound logical, they are, in fact, fundamentally flawed. And, as the title of their book advocates for, it’s these rules that need to be broken.

The first one is that the best measure of success for your company is current sales and profits. They think that this is a false assumption because customers don’t just buy things from you today. When they do buy things they also have an experience that changes their impression of you or their affection for you, which in turn changes the likely amount of business you’re going to get (or not get) from that customer in the future. So, the customer lifetime value goes up or down based on current buying experiences, and that is the metric companies should track – not current sales and profits.

The second rule to break, or false assumption that companies operate on, is that with the right sales and marketing efforts you can always get more customers. In reality, they argue, we have a surplus of products and services, and a shortage of customers – customers are the new scarcity and should be thought of as a productive resource the same way we think of capital or labor as productive resources. You cannot just get more customers with more marketing – there is a limit. Note that Don and Martha are not attacking the whole notion of customer acquisition, they just don’t think that it’s the only way to create value.  The other side of this coin is that capital is an infinite resource – you can always get more capital.

The third rule to break, also widely accepted as truth by most businesses, is that company value can be created by offering differentiated products and services. Products and services don’t create value – customers do when they buy those products and services. Customers create value in two ways. Short term, by buying products from you now. Long term, by buying more from you later and by creating additional business for you through their referrals.  So you should think of customers as productive assets.

Don then talked about a new customer-based metric that companies can use to measure the efficiency with which they are using customers to create value – Return on Customer. Return on Customer is very analogous to Return on Investment. If I have a customer who has a lifetime value of $100 and I make $5 in profit on that customer by selling him stuff during the year, and by the end of the year I’ve been able to increase his lifetime value to $110, then my Return on Customer is 15%.

We also talked about customer acquisition strategies and how you need to evaluate the total customer lifetime value when you prioritize which customers to attract. The least valuable customers come in for the most valuable offers – so having a customer acquisition strategy focused on discounts is not exactly the smartest thing to do. Research that we found as part of research for our own book, about which I will blog about separately, showed that customers who are acquired through word of mouth have not only a higher lifetime value than those acquired through traditional marketing programs, they also bring in more new business through their referrals. So, when you calculate customer lifetime value you need to include the business that will come to you because of a customer’s positive word of mouth. That is especially true in light of other research that Don mentioned, which shows that your highest spenders are not always your highest referrers.

We then talked about another important topic in all of Don’s writing – trust. Customers make most of their buying decisions based on trust, and they think that you are creating the most value for them when they trust you. So if you want to maximize the value your customers create, you need to focus on earning and keeping their trust. And you cannot have a trustworthy business unless you trust your employees.

We closed our conversation with a discussion around the evolution of CRM, and how CRM systems will have to start incorporating people’s social profile, not just their buying history with the company. Don also warned that if companies think of their CRM system as a tool to sell more things, they will fail. CRM systems should be put in place to create more value for the customers – create better offers, better delivery, or whatever will increase value for the customer.

Don had an interesting parting piece of advice for marketers:

…in the era of social media you should always step back from whatever marketing policy you’re considering, whatever kind of new idea you have and ask yourself, ‘Gee, if this became public, would it be an embarrassment to us? Would we be proud of it? Would some of our customers hold it against us?’

Because, you know what? It’s a really good chance it will become public in today’s age and if you want to protect yourself then you really have to have clean hands, not just a good alibi.

Other things we discussed include:

• How trust is a combination of intent and competence
• The impact of technology on corporate hierarchies and processes
• How successful companies of the future will have a high degree of self-organization
• The importance of culture in successful companies
• How the most influential customers don’t want to be sold to

As usual, you can listen to the podcast below.

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.

As usual, we started by having Alan give us some context about himself – incidentally, one of his rules of thumb (#32  – “content isn’t king, context is king”). I had forgotten what the first cover of the magazine said: work is personal, computing is social, knowledge is power, and break the rules. Talk about being ahead of your time – that was 1995! That was a true manifesto which led to Fast Company becoming one of the fastest growing publications and the second largest acquisition in U.S. magazine history.

Rules of thumb pulls together 52 core lessons that Alan learned during his 40 years of working in government, academia and publishing at the Harvard Business School, as an entrepreneur at Fast Company, and as a globetrotting, global “detective,” as he describes himself, trying to make sense out of all the changes that are currently going on in business, politics, and society all over the world.

Next we touched on Alan’s Rule #15 – “every start-up needs four things: Change, Connections, Conversation, and Community” – and how that happened at Fast Company. Fast Company, of course, was one of the first companies to successfully leverage communities as part of their business model. Readers of the magazine formed a real tribe – one that wanted to hang together in the context of ideas and conversations about the trajectory of change in business, work, competition, and in individual’s careers. The tribe, as you may recall, was called Company of Friends – and like most successful communities it became a true movement, one that the company would have been hard-pressed to close down.

Bouncing around a bit we next talked about rule #42 – the survival of the fittest is the business case for diversity. Not only did they have tremendous diversity within their employee base, with people coming from all over the world, with different backgrounds, different educations, race, color, etc. , they also had a lot of diversity among their readers. The diverse employee gene pool allowed them to be very innovative – for example making them one of the earliest magazines to turn their customers into co-marketers by giving away their web content for free with the first “send this page to a friend” feature.

Next we spoke about a number of rules related to talent and leadership, including Rule #19, “memo to leaders: focus on the signal-to-noise ratio,” or Rule # 21, great leaders answer Tom Peter’s great question: “How can I capture the World’s Imagination?”, or (maybe my favorite) Rule #26, “the soft stuff is the hard stuff.” Alan sees a shift from leaders who have all the answers to leaders who know the best questions to ask. He thinks that in the wake of this economic crisis, many of us feel like we’ve been let down by those leaders who were supposed to make sound business decisions. The problem is that they did not ask the right questions and in many cases did not ask any questions. Good leaders, he explained, are those people who start out thinking they are not necessarily in positions of authority to give everybody answers. They’re in a position of authority to ask really tough questions that make their organization think very hard about what they’re doing and why they’re doing it. Good leaders in this period of economic retrenchment should have a mix of intelligence and humility – they don’t need to be the smartest person in the room, but they do have to be the person who’s willing to ask the hardest questions and insist on really good answers. As a leader you need to have clarity about your purpose, honesty about your values, and focus about your metrics.

Next we talked about the importance of  knowledge flows and how you absolutely have to have trust within organizations for knowledge to flow. We also touched on talent being one of the key drivers in successful business and the irony associated with the fact that while most leaders will agree to that, they will also promote CFO’s before HR VP’s, and at the first signs of trouble ditch the talent in order to get their stock prices up.

Alan then spent a fair amount of time talking about a new movement he sees emerging, that of social entrepreneurship and social innovation – a topic he covers in his book as well. People are no longer waiting for governments to come up with solutions to small and big social problems – they are assembling the best of business practices with a strong social mission to tackle the problems as for-profit, non-profit, or hybrid organizations.  They are baby boomers as well as young people right out of college. He believes that social entrepreneurship, which is a true global phenomenon, is changing the world.

In a way, Rules of Thumb is very much a book on leadership. It tries to get people to be leaders on their own terms, and to mint a new group of people who don’t look to others to provide the rules.

Other things we talked about include:

• The need to match left brain people with right brain people
• How most successful magazines mobilized a community that didn’t know it was a community until the magazine came out and gave it the organizing principles so people knew they belonged to a community
• How leadership is a test of character
• How you need metrics to show people how they are doing but how you cannot have too many metrics

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.

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.

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.

Dave started off by talking about the research that he and his colleagues, John King and Halee Fischer-Wright, did over a period of eight years and which led them to uncover five distinct organizational cultures. The context: as you move up through the various stages, everything you want – such as effectiveness, productivity, and innovation – increases, while everything that you don’t want – such as stress, anxiety, and even workplace violence – decreases.

Dave then took us through the aspects and details of the five tribal leadership stages and what the key motivator is for each. Worth noting: the reason they settled on a tribal metaphor is because they found that it is not the individual that determines a company’s culture, nor is it the organization as a whole. Rather the culture gets determined by ‘tribes’ – those naturally occurring groups of 20-150 individuals in organizations through which the work gets done.

Here is a summary of the five stages of Tribal Leadership:

• Stage 1 is motivated by the motto “life sucks.” This is the domain of workplace violence and it makes up about 2% of tribes.
• Stage 2 is motivated by the theme “my life sucks.” These tribes move very slowly, they don’t collaborate and they have very low performance – in fact they do the bare minimum not to get fired. They also have a high degree of cynicism (done that, been there) and they comprise 25% of the tribes.
• Stage 3 is where people think “I am great, but you are not.” Productivity and effectiveness in these tribes increases, but they need to verbally compete to operate.This stage is very typical of professions where knowledge or personal achievement is key – or where you need to outperform you peers to get ahead. Again there is very little collaboration at this stage and people talk a lot about themselves. They comprise 48% of the tribes.
• Stage 4 is where people are motivated by “we are great and they are not.” You find those cultures primarily in young organizations and high tech environments where there is little bureaucracy, making it easier to get things done. Because they are based on shared values, there is less politicking going on, less anxiety and much more collaboration. They make up 22% of the tribes.
• Stage 5 cultures no longer need rivals and their theme is “life is great.” It’s focused purely on values – e.g, curing cancer. This is where the breakthroughs happen and they make up 2% of the tribes.

As a leader, you need to stabilize the level that your tribe is operating before you can work on moving them up to the next level. If you do not push into a new level from a stable position at the previous level, your tribe will operate in a position of weakness and have a high likelihood of regressing back. Of course, that also means that you cannot skip a level. Dave used the example of many dot.coms to make that point. They deluded themselves into thinking they were operating at level 5 without having gone through the previous stages. When the bust hit, many of those tribes regressed multiple stages – some as far as Stage 1.

As he describes it, one’s goal should be to reach Stage 4 and then stabilize your tribe there. That requires you to constantly review the values that you share with your team – always making sure that you are still fighting for the same thing. You also continuously need to connect people with other people as Stage 4 is characterized by fused relationship – where groups of three operate as a single unit.

Organizational change can come by changing one tribe at a time, and if you want to change the level of an organization as a whole, you have to start with the most senior executive tribe first. That is especially hard considering that traditional management structures are very much designed as Stage 3 environments – the leader is great and most others are not, they are dominated by two-people relationships, and they are very political.

The most important leadership skills for tribal leadership are: 1) the ability to notice and identify tribes, and 2) the ability to assess tribal stages, which is primarily based on listening skills to uncover what language tribes are using and what values they share. Transparency is important as well. Without it you cannot build the trust to get to Stage 4 and 5.

Other topics we discussed include:

• Co-existence of the different tribal leadership stages within companies
• How people in Stages 1-3 feel threatened by people who are better than them and therefore hire people who they can control – and how companies at Stage 4-5 develop processes to avoid this
• Some simple techniques to help move an organization forward
• How people can belong to multiple tribes, some of which span the corporate boundaries, and what that means for companies.
• How good leaders get (re)defined by their tribes

As usual you can listen to the recorded podcast below and soon we will be putting up a transcript.

The conversation then moved to how some of fundamental changes in the industry – e.g., the fact that people are making their buying decisions based on information they gain online and in social networks, that they increasingly bring their own tools to work, and that mobile devices are more and more looking like full fledged computers – is affecting marketing. Mark talked about the blurring lines between consumer and business applications and about the need to not flail as a marketer when it comes to integrating social media as part of your marketing mix.

He also talked about the need to segment customers differently and how deep consumer research allowed them to uncover six customer profiles that help them better answer the questions: “what do we stand for?”, “who do we serve?”, and “how do we win?” Interestingly enough (and we see more and more marketers follow this trend), much of the segmentation was based on behavioral characteristics of potential buyers and not traditional market segment data. Other information that came with the profiles include data on where those people like to hang out, how they prefer to receive and consume their information, who else they are listening to, and more. All of this allows them to create and distribute content – both online and offline – in a much more effective way than what they were able to do before.

We then talked about the challenges of developing a recognizable brand when you do not manufacture your own products but instead distribute those of companies that may have pretty strong brands themselves. The way CDW tackles this complex problem is by being “technostic” (meaning technology agnostic) and by positioning themselves as a trusted solution partner. They also realize that buyers establish trusted relations with people more so than with companies or organizations, and so every customer gets a dedicated account manager. With a maniacal focus on customized personal service for every customer they hope that this is what will allow them to deliver against that “trusted partner” brand promise.

We also talked fairly extensively about CDW’s commitment to and use of social media. They had started a small business community but then decided that they would be better served by engaging, as participants as well as sponsors, in places where people were already hanging out. (It is always good to speak with a marketer who resists “the not invented here syndrome” that we have witnessed so many times when companies deploy communities as part of their business processes. They feel like the only way to be successful is by hosting the community on their own platform, even if a strong community already exists on some other platform.) Mark sees social media as a meaningful way to engage people in the context of customer support, but he thinks there is a scaling issue when it comes to leveraging it for lead generation. This is something we have heard from other marketers who need hundreds of thousands, if not millions of customers to be successful. The key here may be to develop a comprehensive leader/ambassador strategy and to understand how those people will help amplify everything you do across the various platforms where your customers, prospects, and detractors hang out.

Although, as usual, we ran out of time, we did get to talk about the types of people that Mark is looking for in staffing his marketing department. Besides finding people who are a good fit from a corporate culture point of view, Mark is looking for well rounded people who, while they may not yet have the full battery of skills one might desire, can be trusted to learn them as well as embrace future skills that we don’t yet know will be valuable. Another important hiring criteria in Mark’s business is diversity. Mark is also convinced that a CMO has to increasingly become a well rounded generalist, with knowledge that goes well beyond marketing.

Other things that we discussed include:

• The importance of face-to-face meetings in customer relations
• The importance of good customer service in brand building
• How they are monitoring what is being said about them in the social media space and how they are engaging
• The importance of understanding “human 1.0″ in explaining what is happening in a web 2.0 world
• The importance of appealing to the altruistic part of the brain instead of the pleasure side of the brain when running communities
• The impact of the “green wave” on technology sales
• The importance of ROI, customer loyalty and other marketing metrics

As usual you can listen to the interview below and soon we will put up a transcript of the call.

John started off by explaining the meaning behind the name of the center which he co-leads with John Seely Brown – the Center For The Edge. For them, the edges are those areas on the periphery where you first see emerging new opportunities. The challenge with the growth opportunities at the edges is to scale them – either by connecting them to the core where all the money and all the people are, through collaboration, or through competition. There are many different types of edges, including geographic ones (think China, India), demographic edges (e.g., the younger generation entering the workforce), marketplaces with unmet needs, or technology edges. The key take-away for executives is to keep focusing on those edges as they are the places where future growth opportunities will first show up. They also need to realize that many of those edges are not part of their organizations or their existing ecosystems.

Next we talked about the newly released  Shift Index, a set of three indices and 25 metrics designed to make longer-term performance trends more relevant and actionable (you can download the full report here). The Index, which was based on a yearlong research project, helps explain, among other things, the intensification of competition that many companies are witnessing today, and which has lead to the mean for company survival to come down to 10 years compared to 75 years in the 1930′s. Other metrics within the index help executives measure the consequences of that intensifying competition and also allow them to measure their performance relative to others. The research also uncovered some concerning trends – one of which is that ROA (Return On Asset) in the US decreased by 75% in the last four decades. And that in the face of consistent increases in labor productivity over that same period.

One of the key conclusions of the study is that competition is intensifying and that companies are not doing so well – their existing management practices are not keeping up with the changes.

We talked about some of the things that companies can do in order to cope with the changes afoot. One of those is to shift from a knowledge stock mentality, where you aggressively protect and hoard proprietary knowledge, build scalable offerings around it, and then extract value from it for the longest possible time, to a knowledge flow mentality, where you realize that what you know today has rapidly diminishing value and where you refresh your knowledge stocks by participating in knowledge flows. One of the big challenges for companies is that unlike information or data flows, knowledge does not flow easily – as it relies on long-term trust-based relationships. So the key to success in this new economic reality is to move from a transactional world to a long-term trust-based world. Examples of taking on a knowledge flow approach include letting your key customers participate in product innovation, or turning them into affiliates to allow them to help one another.

In this increasingly fast-cycle world, John believes that the role of serendipity will be progressively more important. He defines serendipity as “unexpected encounters that are valuable and generate pleasure when you encounter them,” and rather than believe that serendipity is based on pure luck, he believes that we can shape serendipity – both by increasing quality and quantity of unexpected ecounters. One way of doing that is by selecting location. By choosing a “spiky” physical location where there is a high concentration of talent you are much more likely to encounter serendipity than if you were on a farm in Iowa. The same is true for the virtual locations you decide to hang out in – whether social networks or communities. Choosing location by itself won’t do the trick however. If you want to shape serendipity you still need to set yourself up so that you are attracting attention, and increasing visibility and findability for yourself.

Another thing that companies need to focus on to better deal with this new economic reality is to shift from a push model to a pull model – one in which you attract partners, customers and talent, instead of pushing out products and messages. John reiterated the importance of shifting from an intercept, insulate and inhibit marketing mentality to one of attracting, assisting and affiliating customers and prospects.

We wrapped up by talking about John’s evolving views about business communities since he wrote Net Gain almost 12 years ago (to date, and in my biased opinion, probably still one of the most important books on business communities). He would reaffirm that there are huge challenges to building communities, but that if you build them around the needs of the members they can be very powerful. He would also expand on the need for three distinct, and sometimes conflicting, skill-sets or cultures that  are required to ensure successful communities – centered around content, social interactions, and economic business models. Unfortunatelly, most communities only have one or two of those skill-sets engaged.

We also talked about:

• The need to shift from firewall around the company mentality to a modularized firewall around core company IP
• How you cannot participate in knowledge flows for very long if you are only a “taker”
• The importance of face-to-face in building trusted relationships
• The importance of having hyper-local face-to-face components in large online community
• The balance between the need to increase the number of partners we engage with with the need to build deep relationships in order to allow knowledge flow
• The talent Dilbert paradox and how talent is motivated by the talent development
• How you need a high growth strategy to attract and keep talent
• The importance of the “collaboration curve”  in scaling the organizational learning, which they described in detail on their new blog - The Big Shift
• The importance for companies to start adopting a federated view/architecture for their online community efforts

You can listen to the actual CMO 2.0 Influencer Conversation below and soon we will be putting up a transcript of this conversation.

Ram has an interesting take on the changes in technology marketing. He believes that the 90′s spoiled technology marketers. There was an unprecedented technology boom with plenty of IT  budgets to go around, so as a technology marketer the only thing you had to do was set up a pretty web site, put out some collateral and declare victory. In the last few years however, budgets disappeared, technology buyers became disillusioned with technology solutions, and new technologies turned traditional marketing on its head. Consequently, the marketers who did not keep pace are finding themselves in tough times.

One of Ram’s interesting points of view is that bonding is the new branding. You have to bond with 1000′s of people, and at any time…you can no longer plan for a launch, come up with nice messaging, launch and then forget about things until the next launch. In todays world we are facing launches that are on 24/7 and that require ongoing bonding to all of our constituencies.

Marketers need a good understanding of the technologies that are at their disposal to allow them to become better marketers. While he does not see much of a change in the type of people they hire in marketing, that is probably due to their culture of focusing on hiring people who are smarter than you – not necessarily people who have a lot of past experience. For Ram, past experience is no indication of future success.

We also talked about the fact that even though the number of different value propositions for different buyers keeps increasing and that the channels through which you can reach those buyers keeps multiplying, his job as a marketer has in fact become easier and cheaper. The main reason for that is that the most important conversations are no longer the ones you have with your customers and prospects, but instead those that happen among them.

That led to an interesting follow up conversation on their use of communities. They run both a customer community as well as a sales community. Early on they realized that by providing a platform for customers to talk with one another and to help one another, they could in fact make their own job easier. Plus it allowed them to reduce their cost of customer support in the process. They also understood that for the community to work, they needed to be ready to engage – so they encouraged all their engineers to engage with their customers through the community. On the sales side things, they found the same forces at work. By giving sales people a platform in which to help one another, they found that sales professionals started to actually do that across geographic boundaries. Not only that, they started modifying marketing materials and mashing up content to make it work for micro-segments that marketing could not have served in a cost effective way. In effect, they turned their sales process into a social process.

Of course we could not have had a conversation with the CMO of a technology provider who markets a sales and marketing analytics solution without talking about marketing measurements. As we have seen in previous CMO 2.0 Conversations, one of the most important metrics for Ram is customer loyalty. And while they are very metrics-driven, which could in some cases stifle innovation, they support marketing innovation through a dedicated marketing R&D budget.

Other things that we discussed include:

• Offshoring marketing
• How they use social media as part of marketing
• Integration between marketing and customer service
• The issues related to letting go of control
• The need for marketing to formalize sales enablement
• The shift from physical events to virtual events in the marketing mix

As usual, you can listen to the podcast below and we will be posting the transcript soon.

Dan started the conversation by talking about his past, and how a life changing event – having about 70% of his body burned  by a magnesium bomb that detonated close to him – led him on a path of human experimentation.

We quickly moved to one of my favorite topics – how people make decisions either in a market framework or a social framework, and how mixing the two, which inevitably happens in the world of business, is not a good idea.

People are inherently social creatures, and when we talk about money we create a different set of expectations than the ones we have in our social world.  The social world and the market world have different rules and regulations. What do you think would happen if instead of taking a bottle of wine to a dinner party you were to give the host cash so that she could buy her own bottle? It would no go over so well, would it?

In the business world we have no choice but to mix the two together, as we hire people in return for a salary, but also tap into social drivers that money cannot buy (i.e., an extreme example of that is firefighters putting their own life on the line, which could not be motivated by any amount of money). Too many companies try to put a monetary value on things where they would be better off leaving it in the social realm. They need to understand the trade-off between economic efficiency and social efficiency. Who would be more motivated to work overtime when you need it – the person who got a $1,000 cash reward for doing well or the one that was sent on a trip to the Bahamas worth $1,000? Research shows that it is the person getting the gift. The same is true for healthcare – why put a monetary value on the healthcare services that you provide to your employees? It does not buy you social efficiency which you could otherwise derive from providing them with that service as a social reward.

Next we talked about group dynamics, especially herding, and how that affects people’s buying behavior. People tend to herd – buy the music that got the most downloads, stand in line at the restaurant that has the longest line, etc. We also follow the herd of our own self, meaning that we buy things based on the way we bought before – even if that was based on a random act.

Dan also reviewed recent research that shows how we internalize the social. In an experiment he gave some people shirts with the term generous printed on it and others with the term stingy printed on it. After wearing the shirt in public for awhile people who had the generous shirts were behaving in a more generous way than those that had the stingy shirt. The interesting part of the experiment is that he got the same results when people were wearing shirts with the same terms printed on the inside of the shirt – so in a way that they were the only ones to know.

Another issue near and dear to many marketers is that of free trials. Free trials for products that are known quantities, i.e., Godiva chocolates, will not lead to the depreciation of value of those products in our mind. Free trials for products that we do not know, and do not assign value to, will diminish the value of that product so that when you start charging for it we will refuse to pay for it.

Other things that we talked about include:

• The dark side of social rewards
• How the feedback you get from focus groups can be very suspect because people have bad intuitions about their own behavior
• How ideation works best when other people can build on your ideas
• The importance of experimentation and business education in business
• How pricing is not determined by supply and demand and the importance of self-herding
• Behavioral economics and its impact on the economy and the stock market
• The honesty mindframe and its influence on cheating

As usual you can listen to the podcast below and soon we will be putting up transcripts of this CMO 2.0 Influencer Conversation.

As usual, we started the conversation by setting some context – in this case we are talking about a new airline which started flying just one and a half years ago, has 28 airplanes, and 1,400 employees.

The motivation for Virgin to start a new airline in the US was driven primarily by the opportunity that presented itself to redefine the category in the face of rapidly deteriorating customer expectations. I think that is putting it rather mildly – and would have categorized the state of the industry as one in which the service providers seem determined to make their customers lives’ miserable while they are with them. At any rate, it was a perfect fit for Richard Branson’s philosophy for Virgin companies to be customer champions.

We spent a fair amount of time discussing the essence of the Virgin America brand, and how they are making deliberate efforts to humanize the brand and the service. In order to ensure consistency of this experience throughout all the customer touch-points, and to get buy-in from all the employees, they have a very rigorous hiring and training process. Showing respect and a human face to the customer may seem like common sense, but it is a tough thing to scale – it requires the right culture and zero tolerance for mediocrity. Another important aspect of Virgin America’s success in humanizing their brand is not to brainwash people into telling the corporate story, but rather to empower them to tell their own stories. To support that personal passion they also continuously focus on making sure that they have a product that employees can be proud of – so it is a big closed loop system.

Porter spoke at length about the importance of social media in customer support, branding, innovation, and marketing. From how they monitor everything that is being said about them and deploy customer recovery actions when someone twitters or blogs about a bad experience during flight, to how they empower people to act as they see fit when they see some negative comment online. For some reason they attract a very tech-savvy crowd, which makes it a natural choice for them to social-media-fy their marketing, or to use Porter’s words “to explore the digital space, look at all of the trends that are happening, the social media changes, and find more ways to engage and have deeper relationships with people who love the brand through digital.”

Another interesting aspect of Virgin America’s marketing strategy is that they find themselves to be not just be an airline or travel company, but also a media company (which I think will be increasingly true for companies who are successful in harnessing consumer movements, communities and tribes). In the case of Virgin America, they were basically able to fund the launch of a new city through a paid media partnership with HBO.

Other topics we covered include:

• How there are totally new career paths in marketing
• How they are continuously trying to reinvent the category
• The importance of fairness in how you deal with customer problems
• How they focus hard on ensuring brand consistency throughout the travel “ribbon” – including the flight experience, the website, check-in, and where they can, even the terminal experience.
• How Wifi in the airline industry is a true game changer
• The role of advertising in awareness building when launching new markets and new offerings and  the shift to social media after awareness is created.
• How they were able to create a movement before they even flew – rallying people around the cause to let Virgin America fly

When you have an airline and passengers write to you to tell you that they wished the flight was longer, or that they rescheduled their honeymoon so they could fly with you – you know you are doing something right. I wish I could interview some other CMO’s from the industry to get their perspective.

As usual, you can listen to the podcast below and we will start posting transcripts next week.

We delved straight into one of Pete’s favorite topics, which is what he calls the great “Conversational Divide” that exists between marketing and customer service. Pete believes, and I agree, that is unfortunate that customer service is so frequently considered a non-strategic part of the business, with little integration between what companies know about their customers from their CRM systems, their social media strategies, the promises they make through marketing , and what actually happens in their customer service departments when they talk with customers. Pete’s take is that it is time for CMO’s to step up to the plate and define a unified conversational ecosystem. It makes no sense, he says, to have different rules in the different parts of the organization.

Companies should also start capturing information about their customers’ influence in their CRM system, i.e., do they have a popular blog, do they have a lot of twitter followers, etc. – especially since the people who typically use the customer service back channels are the same people who tend to use megaphones to express their dissatisfaction. If you do it right you could develop a so-called user contribution system, where consumers help one another and become advocates for the brand, reducing not only your customer support cost but also other costs like consumer research.

Pete talked a lot about the importance of credibility in the age of consumer generated media, and described in detail the six drivers of credibility: trust, authenticity, transparency, listening, responsiveness, and affirmation. He is convinced that trust is perhaps one of the most important competitive differentiators that companies can develop.

We also spent a fair amount of time talking about the benefits of building brand communities, and whether companies should all have their own or affiliate with one another to deliver better value to their members. And we discussed the community efforts at Intuit as we both have familiarity with Scott Wilder’s work – and especially highlighted the importance of setting up a cross-functional center for excellence to capture all the potential benefits of communities, as well as the power of a credentialing model to ensure quality control when customers help one another.

Other things that we discussed include:

• How Dell Hell could have been prevented
• The importance of emotion and fairness in word of mouth
• How the new customer service motto might be “this company is being monitored for quality improvements”
• How there is a real risk that bad marketers will spoil it for the rest of us
• The symbiotic relation between traditional marketing tools and social media based tools

We wrapped up the conversation by talking about the challenges that Pete is facing as a marketer, and how he measures progress and success. Not surprisingly, his primary way to measure success is by monitoring his client advocacy. Are customer willing to get on a stage with him? Are they willing to recommend his company?

We also talked about the challenges associated with competing in a world with many free offerings – and with Nielsen actually having their own free offerings. Interestingly enough, the way Pete looks at it is the same way you would look at it from a consumer packaged goods manufacturer’s perspective like P&G – which is that “sampling” does lead to purchases.

As usual you can listen to the recorded podcast below, and we will put up a transcript as soon as we can.