Advertising Age, July 14, 2008
by Laurence Knight
It's well-accepted today that innovation is important throughout an entire enterprise. Even in the marketing arena, this has prompted an opening of floodgates to let in a slew of innovative ideas that go far beyond new products. Spurred by everything from open innovation networks to cross-industry advisory boards to crowd sourcing, the deluge of ideas brings exciting potential for inspiring breakthrough concepts and for disruptive innovation. But with so many possibilities also comes the challenge and managing the exploding innovation process. Because of the critical role that marketing innovation plays in an organization’s growth, the question that arises is: How involved should a CEO be and when should the responsibility lie mainly with the chief marketing officer?
Both individuals must be aligned around their organization’s mission and vision for innovation. But it is the CEO who must establish a mandate and actively support a culture of innovation. In the role of top resource allocator, the CEO implicitly sets innovation priorities across the entire growth portfolio, from equities with mature leadership positions to those establishing new share positions; from improving weaker brands to strengthening nigh-growth positions.
That doesn’t diminish in any way the significance of the CMO role and, in fact, it demands that the role be carefully defined. In order to encourage innovation for both ongoing core businesses and for big breakthroughs, it may seem rational for CEOs to carve up the world into evolutionary and revolutionary innovation – evolutionary being step change under the CMO’s aegis and revolutionary being disruptive change managed by another top executive with a different skill set.
But strictly dividing up responsibilities in this way is often unfeasible. What CMO wants to be boxed into the world of incremental brand extensions, particularly when that often cannibalizes the portfolio he or she oversees?
So the CEO has another important responsibility: ensuring that the CMO, while being able to bring big ideas to the table, is not distracted from the primary innovation tasks related to the marketing of ongoing businesses. There are no hard and fast rules about how and where to draw any lines. It’s a complex assessment requiring insight on the part of the CEO: knowing how to leverage a CMO’s skill set and when to reassign time-consuming exploration of any revolutionary ideas for longer-term growth.
Meanwhile, the CMO has a full plate as the sole owner of innovation across a number of marketing areas, such as media, corporatewide marketing initiatives, new agency service models and marketing-centric brand innovation.
With the explosion in the ways marketers must communicate today, who better than the CMO to be the champion of media innovation? Proctor & Gamble, for example, have been open to – and has, in fact, encouraged – all sorts of experimentation. In just one fairly recent example of its continued innovation in social networking, P&G was an early participant in the U.K.’s online interactive drama series “Kate Modern.” Sponsoring brands included Gillette, Pantene and Tampax. P&G Global Marketing Officer Jim Stengel was quoted as saying that initiative was “an experiment to see what will happen” and thus provides continued evidence that his oversight and support of the innovation initiatives helps set priorities, avoids learning-curve duplication and helps to spread best practices companywide. Well-placed to set innovation priorities in media and to spearhead media initiatives, CMOs have the enterprise’s broadest perspective of agency performance in new initiatives as well as the most balanced perspective on portfoliowide interests. Thus, CMOs need wide latitude to create central innovations fund for media. A central fund gives a CMO real clout to strategically support the CEO’s growth objectives by injecting media innovation momentum at critical times. Brands can pitch media-innovation ideas to the CMO to apply for funds to share 50% of the costs of their projects. This not only ensures that ideas are real and relevant to the portfolio but that new, riskier initiatives are not duplicated.
The CMO is also the marketing champion who is best able to translate cross-brand or corporate-brand insights into new marketing innovation. Thus, another critical responsibility of the CMO is to oversee any corporatewide or portfoliowide marketing initiative. Whether selecting a corporatewide spokesperson, initiating co-branded programs across the portfolio or exploring corporatewide sponsorships, CMOs need the autonomy and funding to be able to investigate and research such initiatives across all brands.
Because innovation is about much more than products and services these days, open innovation is forcing companies to constantly reassess and innovate he new agency service models. Even organizations aspiring to reach global agency simplicity are accepting that being flexible and nimble will make them better innovators. However, with the increasingly porous boundaries of open innovation networks, there is a need to manage new relationships carefully and across the business; otherwise the organization is increasingly at risk of becoming an innovation sieve. Once again, the CMO is the best resource to constructively interpret different agency service models, analyze their success and then delicately but clearly align initiatives with the CEO’s growth objectives.
Brand innovation today often involves much more than technical breakthroughs. Innovation in positioning, messages and media can mean the difference between success and failure for a new brand. To get a new brand right requires consistency and continuous effort: it requires a holistic approach to defining the integrated core target, brand positioning and activation opportunity. And, again, it’s the CMO who is most qualified to manage these functions. Wrigley’s Orbit sugar-free gum became one of the five best-selling brands in the U.S. not because of any technical breakthroughs but because of its fantastic positioning and strong “clean mouth” message.
Successfully carrying out these roles sets up the CMO as an organization’s innovation standard-bearer even though he or she has been freed of the primary responsibility of revolutionary innovation. Aligned with the CEO around a shared vision, the CMO serves the purpose of a highly visible and constant reminder of the importance of innovation to all functions.
As Microsoft founder Bill Gates once said, “Never before in history has innovation offered promise of so much to so many in so short a time.” The challenge is to manage innovation so that such a promise can be fulfilled.