The Growth Drivers E-Book

Andy Bird

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 374

Veröffentlichungsjahr: 2011

Beschreibung

The Growth Drivers is a practical guide to building marketing capabilities. It explains why it is critical that organizations invest in the capabilities needed to excel at customer-centric marketing to drive growth. The authors explain what world-class marketing means in practice and reveal the power of strategic marketing as a dynamic propeller of growth. Each chapter includes a summary, a separate in-depth case study, a range of illustrative real-life examples and some practical tools based on the work of leading practitioners in this pioneering field, as well as relevant diagrams and pictures.

Leseprobe

Table of Contents

Cover

Praise for The Growth Drivers

Title page

Copyright page

DEDICATION

FOREWORD

INTRODUCTION – OUR STORY

CONTRIBUTORS

OVERVIEW – HOW TO NAVIGATE THIS BOOK

Part 1: Understanding the Growth Drivers

Part 2: How to Transform Marketing Capabilities to Drive Growth

Part 3: Sustaining Growth in Practice

Part 1: Understanding the Growth Drivers

Chapter 1 THE GROWTH CHALLENGE

What is Marketing?

The Marketing Capability Challenge

Why Growth Matters

The Role of Marketing

The Role of Marketers

Key Marketing Challenges

The Role of Marketing Capabilities

Chapter 2 HOW MARKETING DRIVES GROWTH

The Growth Propeller

Becoming World Class at Marketing

Chapter 3 TRANSFORMING MARKETING CAPABILITIES

The Training Trap

The Drivers of Marketing Capability

Part 2: How to Transform Marketing Capabilities to Drive Growth

Chapter 4 DEFINING A MARKETING CAPABILITY STRATEGY

Types of Marketing Capability Strategy

The Golden Rules of Capability Development

Chapter 5 DEVELOPING SOLUTIONS (PROCESSES AND SKILLS)

Integrated Process and Skill Development

Exploring the Process Driver

Exploring the Skills Driver

Exploring the link with Culture

Chapter 6 DEVELOPING SOLUTIONS (ORGANIZATION, PEOPLE AND CULTURE)

Exploring the Organization Driver

Exploring the People Driver

Exploring the Link with Culture

Chapter 7 DRIVING EMBEDDING

The Challenge of Embedding Change

Moving Forward – a Powerful Insight

The Embedding Arrow

Part 3: Sustaining Growth in Practice

Chapter 8 MEASURING IMPACT

Measuring Marketing

The Value of Marketing

Measuring Marketing Capability Development

The Value of Marketing Capability Development

Chapter 9 MOBILIZING CAPABILITY RESOURCES

Mobilizing for Growth

The Five Building Blocks

Chapter 10 THE FUTURE GROWTH JOURNEY

A World of Astounding Change

The Opportunities for Marketing

Sustaining the Engine to Drive Growth

Getting Started

Marketing Capability: Fit for Growth Tool

Index

Praise for The Growth Drivers

“Clear, insightful and pragmatic. It clarifies the unique contribution that effective marketing and marketers can make to driving business growth – just as relevant to the digital world as to more conventional markets.”

Dan Cobley, VP Marketing, Northern and Central Europe, Google

“A provocative, insightful book that drives deep into the marketing function. It highlights the strategic contribution of marketing and is full of practical advice on how to build marketing capabilities to encourage growth.”

Sir Roy Gardner, Chairman of Compass Group plc

“Skillfully blending concepts and frameworks with case studies and first person accounts, this highly readable, practical book is a must-read for all those interested in taking their marketing and business performance to the highest level.”

Kevin Lane Keller, E.B. Osborn Professor of Marketing at Tuck School of Business, Dartmouth, USA

“Redefines the role of marketing. A must read for any business leader who wants to better understand the role marketing can play in driving business growth, particularly in today’s matrix’ed environment – and puts them in a position to do something about it.”

Simon Lowden, CMO, Pepsi Beverages, North America

“A great book that is both easy to read and well worth the effort. A ‘big picture’ guide to what marketing involves in practice and to the invaluable role capability development plays in driving growth.”

Jill McDonald, UK Chief Executive and President Northern Europe Division, McDonald’s

“Unlike most marketing books, this is a great read. It is replete with practical points, each of which is supported by examples from world class companies. I urge everyone in marketing, be it practitioner, academic or student, to buy it, read it and act on it.”

Professor Malcolm McDonald MA(Oxon) MSc PhD DLitt, Emeritus Professor Cranfield University School of Management

“Undoubtedly the defining work in the field. Each page is built on deep, deep experience of the realities of turning the ambition of powerful marketing into its reality, and putting marketing and the marketing director at the very centre of a company’s success. Reading it could dramatically improve your career path.”

Adam Morgan, Founder, Eatbigfish

“This is an excellent book. It explains how marketers can set a more strategic ‘growth-driving’ vision, engage the whole organization with a customer-centric agenda and then help deliver tangible results. I recommend it as a must read for all global marketing and business leaders.”

Steve Radcliffe, Partner, Steve Radcliffe Associates

“An excellent guide to the unique contribution that marketing makes to driving business growth. Underpins the strategic value of marketing capability development as a key driver of growth.”

Russ Shaw, former Vice President and General Manager-Mobile Division and Europe, Middle East and Africa, Skype

“Mhairi and Andy practise what they preach. They perfectly epitomise the growth driver principles outlined in this book. Their own marketing consultancy has grown explosively in size and stature. They service a wide range of blue chip marketing clients and they run a happy ship, stuffed full of talented marketing people. This book distils their knowledge and packages it in a useful and readable way.”

Cilla Snowball CBE, Group Chairman and Group CEO, Abbott Mead Vickers BBDO

“Brand Learning are the best in the business when it comes to building marketing capability. And this book is a great way to get the inside line on their approach.”

David Taylor, Founder and Managing Partner, the brandgym

“An excellent, accessible guide to the crucial role that strategic marketing plays in driving business growth and the practical ways in which business leaders can build stronger marketing capabilities in their organizations. Andy and Mhairi always have a lot to offer and it is great to see so many insights captured in this book.”

Keith Weed, Chief Marketing and Communications Manager, Unilever plc

This edition first published 2012

© 2012 Andy Bird and Mhairi McEwan

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All rights in relation to the title and content of this work, including the registered trade mark ‘The Growth Drivers’, are owned by Andy Bird and Mhairi McEwan. The Authors also own all rights in relation to the cover and jacket design of this work, save the ‘blue blurred sparkler’ image used under license from iStockphoto © Andy Bird and Mhairi McEwan, 2011.

The publisher is not associated with any product or vendor mentioned in this book. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold on the understanding that the publisher is not engaged in rendering professional services. If professional advice or other expert assistance is required, the services of a competent professional should be sought.

Library of Congress Cataloging-in-Publication Data

Bird, Andy.

 The growth drivers : the definitive guide to transforming marketing capabilities / Andy Bird and Mhairi McEwan.

p. cm.

 Includes bibliographical references and index.

 ISBN 978-1-119-95331-9 (hardback)

 1. Market segmentation. 2. Economic development. 3. Investments. I. McEwan, Mhairi. II. Title.

 HF5415.127.B57 2011

 658.8'02—dc23

2011034158

A catalogue record for this book is available from the British Library.

ISBN 978-1-119-95331-9 (hardback) ISBN 978-1-119-96118-5 (ebk)

ISBN 978-1-119-96119-2 (ebk) ISBN 978-1-119-96120-8 (ebk)

A special dedication to our friends and colleagues at

Brand Learning.

Without your unswerving passion, commitment to excellence, collaboration and support, this book would never have been written.

“He who learns but does not think, is lost.

He who thinks but does not learn is in great danger.”

Confucius 551−479 BC

FOREWORD

It gives me great pleasure to write this short foreword to The Growth Drivers. The task of driving sustainable, profitable growth is of critical importance to organizations of all shapes and sizes across the globe and I believe this book will undoubtedly make a contribution to meeting that challenge.

Our world is changing before our eyes. Technology is evolving at a rapid rate and as a result, the availability, speed and impact of data are at levels never previously seen. Indeed, the accessibility of information is empowering people as never before. In turn, the demands on business are ever increasing as previously dormant economies become the new global growth engines and a fresh source of competitive challenge.

The need to deliver sustainable growth for the benefit of shareholders, customers and employees alike, demands that business must relentlessly strive to build competitive edge. Marketing is not the only source of growth but it is an important one. Without respect and responsiveness to its customer needs, any organization is running on borrowed time.

In this book, the authors argue that effective marketing has a vital role to play in this mission – and they are right. It is a critical role and it is also a weighty responsibility – one that cannot be ignored.

Customer expectations of brands and of organizations are higher than ever. To fulfil such demands, innovation must be balanced with consistency, quality with value, choice with responsibility and sustainability with growth. But whilst there are enormous challenges and complexities to be addressed, there are also unparalleled opportunities for those organizations equipped for change.

The Growth Drivers is a practical guide to what organizations can do to transform themselves to meet those challenges – how they can develop their marketing capabilities to build strong and distinctive brands that create better customer value and help drive sustainable, profitable, demand-led growth. It explains the role that effective marketing should play in enabling organizations to drive that growth, clarifies what ‘world-class marketing’ really means and explores how effective marketing should work in practice – highlighting the key role played by marketing, by marketers and by marketing capability development in driving growth.

The Growth Drivers is filled with deep insight and the grounded, practical experience of international business leaders who are all grappling daily with growth challenges. Its message is an optimistic one – that any organization with the right focus and effort can build stronger marketing capabilities to help drive demand-led growth. The organizations with the foresight to recognize that fact, and to act on it, will be the ones who best succeed in driving that growth – and they will deserve it.

Sir Roger Carr

Sir Roger Carr is Chairman of Centrica plc and President of the CBI

INTRODUCTION – OUR STORY

“Think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation of the first link on one memorable day.”

Charles DickensGreat Expectations

We owe our deep passion for marketing to the extraordinary commitment to marketing excellence shown at Unilever – one of the world’s leading suppliers of consumer packaged goods. Unilever took us both on from university in the mid-1980s as marketing trainees and over many years the people we worked with taught us to understand and respect, in equal measure, the discipline of marketing.

Andy’s career took him through foods marketing roles in the UK, Singapore and India before he moved on to scope and set up the global Unilever Marketing Academy. He led this group for several years, introducing new thinking, process tools and learning programmes that were cascaded globally to all business units and geographies.

Meanwhile, Mhairi’s career in Unilever’s Home & Personal Care business included international marketing and sales roles based in the UK, France and Egypt. She then moved on to head up marketing for PepsiCo Europe and Walkers Snack Foods, before becoming a consultant to Burger King, Guinness and Unilever and supporting for several years the development of content materials for the global ‘Diageo Way of Brand Building’.

As we moved on in our careers, we began to appreciate the much wider context in which marketing operates in different companies, cultures and industries. In our combined 50 years of marketing experience working with global, regional and local teams across the world, we have each experienced, first hand, the power and potential for marketing to drive brand and business growth.

However, as we looked across these businesses, we also began to appreciate the extent of the challenges facing marketers – global brands, specialized roles, increasing channel complexity, high staff turnover, return on investment pressures and enormous changes in the legal, regulatory and digital landscape.

There was widespread confusion and misunderstanding about the scope and role of marketing. There was no established terminology, few practical tools, poorly defined processes and inadequate training. Moreover, the responsibility for marketing capabilities was unclear and fell within two functions – the Marketing and HR teams.

It was for this reason that, in July 2000, we set up Brand Learning, joined initially by a third director, Mark Simmonds, who a few months later stepped out into an independent consultancy role. Brand Learning was established around a unique passion to build the marketing capabilities and commercial performance of people, teams and organizations across the world. What first started as an idea then became a shared vision to shake up the world of marketing “training” and to establish a whole new category – that of marketing capability development – to help re-engineer the way marketing works.

We were soon joined by other marketing professionals who made essential personal contributions to that mission along the way, most notably by our four board partners – Jill Hughes, Michele McGrath, Ana Maria Santos, and Nevine El-Warraky. Each in their turn brought deep expertise in marketing and consultancy with leading organizations such as Colgate, Reckitt Benckiser, PepsiCo, Unilever, PricewaterhouseCoopers (PwC) and the Added Value Group.

Our experience since then, with our world-class clients and colleagues at Brand Learning, has shaped where we are today and why we wrote The Growth Drivers. Our aim is to clarify the role of marketing and its important contribution to growth, to highlight the unique growth contribution made by marketers, and to share our experience of how to build the marketing capabilities needed to help create better customer value and drive growth.

We are inspired by two passions. First, by the role that strong brands and propositions – fuelled by effective marketing – can play in helping organizations grow. And second, by the impact that learning can have on the growth of people – by building their marketing skills, changing their attitudes and building their capabilities and confidence to become more effective in their work and in their lives more generally.

There are many people who have strong credentials in the sphere of marketing. However, their focus is usually on doing the job itself, rather than on explaining to others what they do and how they do it. We have a unique perspective that comes from being experienced marketing practitioners. We have also been able to look at marketing through the wide lens of international consultancy and we have worked passionately over the past 10 years and more, to pioneer the category of marketing capability development.

Together with our team at Brand Learning, we have worked in every global continent, in over 60 countries, with more than 100 multinational organizations in almost every sector. Our collective experience ranges from consumer packaged goods, retail, technology, financial services, telecommunications, leisure and media to pharmaceuticals, oils and gas, chemicals, household white goods and consumer electronics, in both the public and private sectors and the not-for-profit sector.

We have seen these many different organizations struggling with the same issues and striving to address the same challenges. Over and over we have heard the same pleas – we need to grow faster yet we lack the capabilities; we need to be ‘world class’ at marketing but we don’t know how to get there, or even how we rank compared to our peers.

So we have written this book to share what we have learned. We offer it not only as a practical guide to building marketing capabilities, but also with the belief that marketers around the world will benefit from their organizations meeting some of the challenges we set – helping to establish marketing, marketers and marketing capability development as valuable growth drivers.

Thank you

We are very grateful to all those who have helped The Growth Drivers itself “grow” from an idea and a somewhat daunting task several years ago, into this book. We’d also like to thank some very special people, without whose help both the book and Brand Learning itself would not be the same.

First, a huge thank you to all the senior business and marketing leaders who, despite the pressures of very busy jobs, have given so freely of their time, experience and learnings and for the many valuable insights they have shared throughout this book. A list of all the contributors is provided overleaf.

Our heartfelt thanks and appreciation to our fellow board directors, partners and to every member of the Brand Learning team. We are honoured to be on this journey of growth with you. Thank you for your confidence in us, for your professionalism, passion and unswerving commitment in growing Brand Learning over the past 11 years. And for all the many ways in which your deep expertise and experience has contributed to the exciting new category of marketing capability development that we have opened up together.

Thank you to our researcher Elen Lewis – a respected writer for The Marketing Society and author in her own right, and a source of fantastic inspiration and support over the past three years. Thank you also to Claire Plimmer and to our publishers Wiley, who first approached us many years ago to ask us to put some of our ideas into writing and who have shown incredible patience!

Thank you to Jane Boydell and Lisa Thomas, our PAs, for their good humour, indefatigable commitment and practical skills; to Stuart Tucker for his support on images and visuals; to Lisa Schaverien and ArtHaus for concept and cover design; to Lee Waters for keeping the IT system operational; to Susan Sochart, Sorcha Hunter and Tonia Cassandro for marketing support; and to Graham Viles and James Mitchell for their support on the commercial and legal aspects of producing this book.

A big thanks must go to everyone who read and gave feedback on our draft text – our board partners, also Sam Ellis, Linda Miller and Bruce Levi for patiently reading, reviewing and critiquing the content and structure, and to Emma Jenkins for her research and support on marketing developments in digital and social media. We are immensely grateful for all your contributions.

And finally … a very personal and heartfelt thank you to our partners Jacqui and Phil, our kids Susanna, Jonnie, Naomi and Guy, our parents Derek, Ann, Eddie and Rose and to all our friends for their amazing support, belief, patience and encouragement. We only hope we can now find more time to spend enjoying your company!

      

CONTRIBUTORS

We are deeply indebted to all of the following business and marketing leaders for generously sharing their insights, experiences and examples with us as we wrote The Growth Drivers:

AkzoNobel

Karen Jeffery, Global Marketing Capability Leader

Alliance Boots

Torvald de Coverly Veale, International Brands Development Director

AstraZeneca

Andrew Bailey, Vice President, World Class Marketing

Tim Bailey, Head of Marketing Academy

Aviva

Jan Gooding, Global Marketing Director

Amanda Mackenzie, Chief Marketing Officer

Barclaycard

Nina Bibby, Global Chief Marketing Officer

Jon Harding, Head of Organization Development

British Gas

Phil Bentley, Managing Director

Chris Jansen, Managing Director, Services & Commercial

BT

Lesley Wilson, Head of BT Marketing Community and Brand Operations

Bupa

Martin George, Managing Director for Group Development

Fiona McAnena, Global Brand Director

Carlsberg

Julie Blou, Senior Manager, Carlsberg GroupWay

Diageo

Paul Walsh, Chief Executive

Nick Rose, former Chief Financial Officer

FrieslandCampina

Franc Reefman, Marketing Director

Google

Dan Cobley, VP Marketing, Northern and Central Europe

Honda Motor Europe

Ian Armstrong, European Communications Director

HP Imaging and Printing Group

Philip Darnell, VP of Marketing

Kevin Kussman, Director Learning & Development

HP Snapfish

Barry Herstein, Chief Marketing Officer

Ideal Standard

David Hamill, Chairman

Kerris Bright, Chief Marketing Officer

IHG

Tom Seddon, EVP and Chief Marketing Officer

Kellogg

Mark Baynes, Global Chief Marketing Officer

Kerry Foods

Phil Chapman, Group Marketing Director

Novartis Pharmaceuticals

Huw Jones, Senior Director, Global Commercial Excellence

Cathy Strizzi, Director, Learning and Capability Development

PepsiCo (Pepsi Beverages)

Simon Lowden, Chief Marketing Officer, North America

Pfizer Europe

Craig Scott, former Head of Specialty Analytics

Reckitt Benckiser

Victoria Coe, Global Brand Marketing Manager

Rolls-Royce

Steven Dyke, Head of Global Early Career and UK Recruitment

SABMiller

Nick Fell, Group Marketing Director

Sara Lee

Nilgun Langenberg, former VP Talent Development and Learning

Shell

Navjot Singh, Global Marketing Manager, Recruitment and HR Communications

Shell UK Oil Products

Mel Lane, General Manager, UK Retail

Shell Bitumen and Shell Sulphur Solutions

Richard Davies, Global Marketing Manager

Unilever

Ros Walker, VP Marketing Capability

Helen Lewis, Consumer Insight and Marketing Strategy Director, Unilever Marketing Academy

Virgin

Mark Gilmour, Brand Director, South East Asia

We are also very grateful to all those whose own work we have quoted in small extracts – may we thank you and accredit your thinking and contributions.

OVERVIEW – HOW TO NAVIGATE THIS BOOK

In The Growth Drivers we aim to help organizations and business leaders reach a deeper appreciation of the strategic value of marketing, of marketers and of marketing capability development in driving sustainable, profitable growth. It can be read from start to finish or readers can feel free to dip into the most relevant chapters reflecting their interest and experience. For ease of reading we have divided the book into three main sections:

Part 1: Understanding the Growth Drivers

Chapter1– The Growth Challenge (page 7) explains what growth involves, the role of marketing as a discipline, what we mean by The Growth Drivers and why marketing capability development is so important to drive growth.Chapter2– How Marketing Drives Growth (page 37) examines in more detail the role of the marketing function and the specific tasks and activities that are involved in driving growth through marketing. We introduce a powerful new model called The Growth Propeller to explain the core marketing capabilities needed to drive growth.Chapter3– Transforming Marketing Capabilities (page 71) focuses on the challenges of marketing capability development, explaining what it is and overturning the common misunderstanding that “capability building” is just training. We introduce another useful tool, The Brand Learning Wheel, which defines a more holistic approach to capability development.

Part 2: How to Transform Marketing Capabilities to Drive Growth

Chapter4– Defining a Marketing Capability Strategy (page 103) explains how to kick off a marketing capability development programme by defining the key issues facing the organization and creating an inspiring marketing capability vision, strategy and plan.Chapter5– Developing Solutions (Processes and Skills) (page 133) guides readers through the detailed process of developing marketing capability programmes focused on the capability drivers in the “top half” of The Brand Learning Wheel, i.e. marketing processes, tools and their integration with skill development initiatives.Chapter6– Developing Solutions (Organization, People and Culture) (page 165) continues the development stage, covering initiatives that focus on the capability drivers in the “bottom half” of The Brand Learning Wheel, i.e. organization structure and roles, people and talent management, and company culture.Chapter7– Driving Embedding (page 199) covers the challenge of launching and embedding capability development programmes in an engaging, inspiring way that changes the way people work to deliver business growth in practice.

Part 3: Sustaining Growth in Practice

Chapter8– Measuring Impact (page 229) examines the challenge of measuring the effectiveness both of marketing and of marketing capabi­lity programmes. Here, we review some of the main approaches used to measure the tangible impact of marketing and of capability development.Chapter9– Mobilizing Capability Resources (page 255) covers insights and practical advice on a range of ways to organize marketing capability development, for those with limited resources right up to those looking to establish a dedicated in-house marketing academy or marketing excellence team.Chapter10– The Future Growth Journey (page 277) concludes by looking forward to some of the future opportunities and challenges facing marketing and provides a practical Fit for Growth tool with 15 simple questions to help readers assess the status of marketing and marketing capabilities in their own business.

Part 1: Understanding the Growth Drivers

Chapter 1

THE GROWTH CHALLENGE

The world is changing fast. The breathtaking pace of technological advances and the advent of social media have prompted an unprecedented growth in “people power”. In parallel, the urgency of achieving environmental sustainability, the shift in economic power to emerging markets and the cultural implications of globalization are transforming the world in which we live.

The speed and scale of these changes are having a major impact on all organizations. Yet, as businesses everywhere strive to keep pace with these challenges, they remain under more pressure than ever to drive profitable, sustainable growth and deliver shareholder value – creating a significant growth challenge.

As organizations strive to weather the storms of economic recession, the focus for many is on the financial drivers of shareholder value, on cost reduction, efficiencies, staff severance and budget restrictions. But costs can only be cut so far.

There is now a growing recognition of the need to embrace new market opportunities, to create value in new ways and to drive growth in a more proactive and sustainable way that addresses and balances the needs of all stakeholders – customers, shareholders, employees and society as a whole.

But what do we mean by growth? What is the role of marketing and marketers in driving growth? And how can you build the marketing capabilities to drive that growth in practice? These are some of the important questions we will answer in The Growth Drivers.

Types of growth

Organic business growth, as opposed to growth from mergers and acquisitions or other financial activities, is best driven by increasing customer demand. To avoid confusion, we use the term customer here and throughout The Growth Drivers to mean the people or organizations that buy an organization’s products or services – which may include consumers, shoppers, channel partners, businesses or public bodies.

Demand-led growth is driven, at its core, by more customers choosing to buy those products and services, buying them more frequently, buying greater quantities of them or being prepared to pay more for them. So, to drive demand-led growth, organizations have to be able to consistently create better value for their customers – this task is the core role of marketing.

What is Marketing?

We believe that the most urgent priority facing all organizations striving to drive growth today is to pay as much attention to the marketing drivers of performance as they have traditionally paid to the financial ones.

“A lot of companies have chosen to downsize, and maybe that was the right thing for them. We chose a different path. Our belief was that if we kept putting great products in front of customers, they would continue to open their wallets.” 1

Steve Jobs, CEO, Apple

This raises a fundamental issue that needs to be overcome. Many organizations and their leaders do not fully understand what marketing is all about, its role as a business function and its potential to drive growth. They therefore lack the marketing capabilities they need to create value and deliver demand-led growth on a sustainable basis.

At one level, many people in an organization could be considered “mark­eters” because they contribute towards “creating customer value” – such as sales, customer service teams, research and development, etc. This is one reason why the role of the marketing function is widely misunderstood and undervalued.

Another reason is that mark­eting gets relegated to only one dimension of its role – that of brand communication, promotion or sales support. Or, alternatively, it gets merged into sales roles or into an amorphous “commercial” role, where its true purpose gets obscured, or becomes the responsibility of general managers who may lack any specialist marketing expertise.

In our view, marketers have a critical functional contribution to make as the growth drivers of an organization. Their unique role is to drive growth and create better customer value by building salient brands and innovative propositions that customers find relevant, appealing and distinctive. This creates the crucial demand or pull that drives sustainable, profitable growth throughout the system.

The Role of THE Marketing Function

The unique role of the marketing function is to create better value for customers, by building salient brands and innovative propositions that people find relevant, appealing and distinctive, to drive sustainable, profitable, demand-led growth.

The Marketing Capability Challenge

Overview

As we will demonstrate, there has never been a more challenging time to be in marketing, but neither has there been a more exciting time. Marketing has never been more important, but greater appreciation is needed of the growth-driving capabilities related to its role, such as insight generation, market segmentation and portfolio planning, innovative proposition and brand development. The power and impact of key enabling skills such as creativity, inspiration, cross-functional leadership and engagement are also often underestimated by executives with too strong a financial or commercial focus.

The marketing capabilities required to drive growth in today’s intensely competitive world extend further than the skills of individual marketers, further even than the skills of marketing teams. The capabilities needed may require reorienting the entire organization, starting with the marketing function, to enable it to operate passionately and continuously in a customer-centric way.

In The Growth Drivers, we aim to help business and marketing leaders reach a new, deeper appreciation of the role of three key, inter-related drivers of sustainable, profitable, demand-led growth (see Figure 1.1).

Figure 1.1:The Growth Drivers

Three key drivers of sustainable, profitable, demand-led growth

Marketing: the discipline and practices of marketing, which enable companies to create better value for their customers and thereby drive sustainable, profitable, demand-led growth.Marketers: the people who are responsible for specialist marketing tasks and activities – however these are defined in any specific organization.Marketing capabilities: the abilities of people, teams and organizations as a whole to manage the marketing activities needed to create better customer value and drive demand-led growth.

Where will we focus?

There are many experts pioneering new thinking in individual aspects of marketing such as insight, digital marketing etc, and this is also at the heart of our own consultancy work with those at the leading edge of marketing. However, The Growth Drivers has a different aim. It will give the ‘big picture’ on marketing and address all three drivers of demand-led growth, but our primary focus will be on exploring the last one – how to build the marketing capabilities needed to drive growth. It is here that, over ten years ago, we identified both a gaping hole and a significant opportunity for organizations to be more proactive and take practical steps to improve their ability to drive growth.

In The Growth Drivers we will share our practical experience based on working in international marketing and building marketing capabilities with thousands of marketers across over 100 multinational clients in over 60 countries globally. We are also privileged to be able to share the direct experiences and honest reflections of over 40 senior international business and marketing executives, as we examine the role and impact of the growth drivers in their organizations.

Our agenda is forward-looking, positive and optimistic and one that we hope will inspire businesses and their leaders to develop and sustain more customer-centric, growth-oriented strategies. And the practical set of tools, principles and case studies we provide will equip readers with a leading-edge, proven way to approach the task of building marketing capabilities and commercial performance in practice.

According to Interbrand’s “Best Global Brands Survey 2010”, the fastest growing global brands were Apple (up 37% to $21 billion), Google (up 36% to $43 billion) and Blackberry (up 32% to $6.7 billion). Their growth stories to date demonstrate an impressive blend of customer focus, technological innovation and speed of action. But brands in other industries can also successfully drive their growth by becoming more customer-focused, as the following ICI/AkzoNobel case study illustrates.

The ICI Growth Story

The development of ICI’s international decorative paints business (now AkzoNobel) provides an excellent example of the potential power and impact of the three growth drivers: marketing, marketers and marketing capabilities.

What was the burning platform?

Going back to 2004, the ICI paints business was facing some big commercial challenges. Although its brands were market leaders in a number of countries around the world, its market shares were coming under increasing pressure. ICI’s brands were being squeezed from below by economy and retailer private label brands and from above by premium competitors positioning themselves as style leaders. The only growth the company was able to achieve was unprofitable, and in the UK, a key market, its primary retail customer was losing patience with ICI’s lack of category leadership. Pressure was growing on retail listings and prices and the situation was heading to a crisis point.

The new CEO, David Hamill, and Kerris Bright, UK Marketing Director and later CMO, were clear where the root cause of the problems lay – a lack of strategic marketing. Hamill had been brought on board from Philips to lead a turnaround in ICI’s performance and was firm about what the marketing function needed to achieve. “All businesses must deliver profitable growth if they are to succeed in the longer term, and ICI was no different”, reflects Hamill. “The key priority was to create robust brand and product portfolio strategies that would enable us to create competitive advantage and fulfil our commercial potential as a business.”

Kerris Bright adds her perspective, “David single-mindedly recognized that without strategic marketing thinking we wouldn’t win. When I joined the company and talked to our sales colleagues, they also felt that marketing was not creating a sense of direction. There was no clarity on what our future strategy was going to be or where our future growth and profits were going to come from.”

Both Hamill and Bright realized that in order to transform ICI, they first needed to overhaul and develop the marketing capabilities within the company. At the heart of their approach was a drive to upgrade the professionalism, skills and attitudes of the global marketing community so that they were capable of creating the portfolio strategies, brand building innovations and communications so essential to the company’s future success.

What was the impact of building marketing capabilities?

Over the coming years, ICI launched a coordinated, worldwide programme of award-winning capability building initiatives. This included an ongoing global audit of its marketing processes and practices, the creation of a common ICI language and a bespoke set of best practice marketing tools. These were launched and cascaded via a series of “live-action learning” programmes for marketing teams focused on helping them understand the “ICI Way”, build their skills, address current marketing challenges and develop proactive business solutions.

The impact was significant and fast. Across the world, ICI focused its marketing efforts behind a lead brand in each market and reduced the complexity in its portfolio. Differentiated positioning was established that played to the company’s strengths and new products and award-winning brand communications were soon brought to market.

By 2008, the results were impressive. Hamill’s three-year commercial targets to turn round decline and deliver growth in excess of 4% per annum with significantly improved profitability were exceeded. Sizeable share growth had been achieved around the world in key markets such as China, India, Brazil, Poland, and Indonesia. And in the UK, ICI and its flagship Dulux paints brand were awarded the Grand Prix for Marketing Excellence in the prestigious Marketing Society Awards.

ICI’s business has since been acquired by AkzoNobel and its “Advance” marketing capability development programme has been adopted across the wider business globally.

As AkzoNobel’s Global Marketing Capability Leader, Karen Jeffery, explains, “In addition to providing people with key skills, tools and processes, Advance continues to play a pivotal role in helping people to understand our strategy and to contextualize their role in building our brands and business. At its core, the Academy’s central mission is all about building connectivity, both across the marketing community as well as with our customers.”

Further investment in capability building has delivered a more integrated, global approach to brand development and an inspiring new brand idea of “add­ing colour to people’s lives” is providing fresh inspiration and purpose across the company. The continued benefits of the strategy are evident in AkzoNobel’s performance, with 2010 sales revenue in its decorative paints business up 9% and profits up 13%.

“The impact of the marketing capability programme was very significant. We grew the business beyond the normal level of growth in a very slow moving market. We saw a much stronger interaction and way of working between marketing and technical innovation, which created a very healthy pipeline of new products. We saw our brands strengthen and we saw an enormous amount of enthusiasm created in a lot of people, because there was a growing recognition that people’s role in the marketing function was important. And I guess the most important thing was that we saw a very, very healthy improvement in the bottom line of the business. At the end of the day, there has to be clarity of return on investment and we certainly saw that in ICI.”

David Hamill, former CEO, ICI/AkzoNobel (now Chairman, Ideal Standard)

A timely call to action

ICI’s growth story demonstrates the critical role that marketing, marketers and marketing capability development can play as the growth drivers within a business.

For companies to succeed and flourish, investment in building the marketing capabilities of their people, teams and the organization as a whole needs to be an important strategic priority. At a time when many organizations are facing unprecedented challenges in driving growth in today’s global networked markets, this call to action has never been more timely nor more important to commercial success.

“We live in an environment that is changing hugely. Competition is continuously more challenging, the fusion of media and technology is transforming the relationships between brands and consumers, and there is a need for brands to possess a social integrity beyond their economic intent. So it is critical, if we are to continue to deliver results and win in our categories, that we build up stronger specialist marketing capabilities across the organisation.”

Mark Baynes, Global Chief Marketing Officer, Kellogg

Let’s now move on to explore these points in more detail and to understand why growth is so important to organizations. In doing so, we will examine the role of marketing as a discipline, the role of marketers themselves and finally the role of building marketing capabilities in driving sustainable, profitable, demand-led growth.

Why Growth Matters

Driving shareholder value

Growth is a core driver of shareholder value. In technical terms, shareholder value measures the capital gains of a stock plus the dividends received. It is best correlated to the expected level, timing, duration and risk of future cash flows and the capital employed to generate these cash flows. In the short to medium term, these cash flows can be improved by cutting costs and through acquisition of other businesses, but there is a limit as to how far these strategies can be leveraged. Ultimately, the most sustainable way to create shareholder value in the long term is to enhance customer demand-led growth.

“What many executives have not understood,” said Peter Doyle in his book Value-Based Marketing, “is that shareholder value is more about growth and grasping new market opportunities than reducing expenses … the companies that have created the greatest value for shareholders have generally been market-led, high-growth companies.” Doyle went on to conclude that, “Marketing strategy lies at the heart of value creation. It is the platform on which are based growth, profitability and return on investment.”2

Driving Shareholder Value

Diageo, the guardian of iconic brands like Guinness and Johnnie Walker, understands more than most the crucial role that brands and marketing play in driving growth. Nick Rose, previously Diageo’s Chief Financial Officer, explains, “The best way to gain value for shareholders is to get top line growth as it feeds straight through to the bottom line and generates cash.” He goes on to say, “the more we understand about our brands and the drivers of their success, the more we have seen that brand innovation is a key part of getting that top line growth.”

Driving stakeholder value

However, the importance of growth doesn’t begin and end with shareholders. Indeed, relying too heavily on the concept of shareholder value can result in companies focusing excessively on short-term financial gains to the detriment of longer-term brand building and neglecting other influential stakeholders like customers, employees and even society as a whole, all of which have a major influence on sustained commercial success.

“The job of a leader is to deliver commitments in the short-term while investing in the long-term health of the business. Employees will benefit from job security and better rewards. Customers will benefit from better products and services. Communities will benefit because successful companies and their employees give back. And obviously shareholders will benefit because they can count on companies who will deliver on both their short-term commitments and long-term vision.”

Jack Welch, former CEO of GE.3

We believe that the key growth challenge is to ensure that the needs and demands of all stakeholders are assessed, balanced and reconciled. This imperative will become ever more important as the world addresses the needs for environmental sustainability, greater social equality and corporate social responsibility.

Growth brings tangible benefits for all key stakeholders

Provides more products and services of value to customersGenerates jobs, security and career development opportunities for employeesCreates superior returns for shareholdersCreates commercial benefits for trade customers, partners and suppliersImproves overall economic prosperity and welfare for social communities

Driving sustainable growth

Not all growth may be good growth. When brought to task over a serious safety problem with sticky accelerators that led to the recall of over 8.5 million vehicles globally, Akio Toyoda, the chief executive of Toyota, revealed in his written testimony to the US House Oversight Committee: “I fear the pace at which we have grown may have been too quick. We pursued growth over the speed at which we were able to develop our people and our organization and we should be sincerely mindful of that.”4

By positioning marketers as growth drivers, we are not suggesting they should pursue growth at any cost. In addition to the commercial sustainability considerations illustrated by Toyota’s experience, marketers are increasingly embracing their responsibility to develop more sustainable brand and business opportunities that help alleviate social and environmental problems, not exacerbate them. But sustainability is not at odds with driving profitable growth.

Paul Polman, CEO of Unilever, sees no conflict between Unilever achieving its sustainability goals and growing its business: “We are already finding that tackling sustainability challenges provides new opportunities for sustainable growth: it creates preference for our brands, builds business with our retail customers, drives our innovation, grows our markets and, in many cases, generates cost savings.”5

The “Plan A” Initiative

Marks and Spencer launched its “Plan A” eco and environmental initiative in 2007 and subsequently targeted the goal of becoming the world’s most sustainable major retailer by 2015. As explained on its website, “Through Plan A we are working with our suppliers to combat climate change, reduce waste, use sustainable raw materials, trade ethically and help our customers lead healthier lifestyles.”6

Initially 100 commitments were made within five years, 62 of which have already been completed. Highlights have included reducing CO2 emissions by 50,000 tonnes, 20,000 tonnes of waste diverted from landfill and 1.8 million clothing garments being recycled via Oxfam. Mike Barry, head of sustainable business at M&S, explains, “