Scalable Intelligence: How to Solve the Growth Imperative
From quarterly earnings calls and daily market scrutiny through to ever-intensifying competition for talent, today’s business reality is brutally paced. Even Apple’s shares fell dramatically last quarter despite record revenues. For better or worse, in a world where 95% of new product launches fail and 42% of startups shut down due to a lack of market demand, the business community has an ever-increasing fixation on the Growth Imperative.
Unfortunately, increasing and sustaining growth is hard. Despite their best efforts, many growing firms still fail once the sheen of their last funding round wears off and the pressure for relentless growth takes over. Relentless is the operative word: McKinsey has shown that if a software company grows by 20% or less YoY, it has a 92% chance of ceasing to exist within just a few years. 20% annual growth, just to try and stay in the race.
The role of the CMO in powering a brand’s growth trajectory is crucial, yet according to Korn Ferry, the CMO has the shortest tenure of any member of the C-Suite, averaging just over three and a half years in the consumer industry. In an always-on era of ever-changing public opinion and the growing power of the everyday consumer, even the smallest misstep can be fatal. CMOs must constantly keep their fingers on the figurative customer pulse if they’re to meet the increasing internal and external demands for scalable growth.
To deliver a virtuous circle of increasing growth and greater audience understanding, and ultimately solve the Growth Imperative, CMOs must focus on the following six steps:
1. Acceptance is key
Even the most diligent of CMOs cannot hope to know everything there is to know about their market, customers, prospects, competitors and emerging trends. It is impossible, and besides, any CMO that tried to attempt this would invariably find themselves with no time to action anything. So begin by defining what is essential to know, versus what is nice to know.
Of course, there is also the Innovator’s Dilemma to consider: having delivered a breakthrough innovation, the innovator ends up locked in an endless feedback loop with clients, listening to their demands and making iterative improvements rather than looking outside of their company at what is happening in the wider business world.
The latter is an essential skill for CMOs both to ensure continued innovation and to ensure that the business is not blindsided by any emerging trends. Remember that Nokia was featured on the front cover of Forbes as ‘untouchable’ just two years before the business effectively collapsed. Things can unravel at lightning pace if a CMO takes their eye off the ball.
2. Use the right data
Not all research tools are created equal; indeed, some can be deeply misleading and lead CMOs off in the wrong direction. For example, when scoping out a potential market or assessing the likely impact of an emerging tech trend, it’s tempting to look within the media for answers - after all, news articles are easy to find and easy to digest. Yet even with high-quality, credible news outlets, it should be remembered that the media’s objectives are fundamentally different from those of the business community.
The media has a vested interest in trendsetting; in order to retain a readership, it is not enough simply to tap into the zeitgeist - it must invent the zeitgeist. To cut a long story short, the media gets it wrong, all the time, and rarely is it held to account when the trends that it hypes do not come to fruition.
Similarly, don’t rely upon the investment community as a measure of what’s hot and what’s not. VC business models allow investors to back the wrong horse eight or nine times out of ten and still make a fortune.
The preeminence of major social media platforms in people's’ everyday lives can make social data appear particularly compelling. And yet, social listening tools rarely filter out bots, fake accounts or bad data, while typically delivering very limited engagement or sentiment metrics. Social media will only present extremes - the people who either love or hate a brand enough to post about it. There won’t be any data about the silent majority in the middle.
In contrast, search data offers a much more real sense of what people are thinking. Tools such as Google Webmaster Tools, SEMRush or Answer the Public can be an invaluable source of initial insight. The same is true of behavioural data - after all, it’s very hard to argue with the facts about how people actually behave. Internet of Things data, clickstream data, PoS data all help to tell a story about a specific audience.
Finally, scalable consumer intelligence can offer a richness of data that allows CMOs to develop broader insights about their audiences and target markets. The problem with gathering consumer insights is that, historically, it has tended to be commissioned in isolation as a one-off project, with only a limited number of stakeholders involved in determining the direction of the research.
Once the tools to reach consumers are given to every senior leader in the business, with the ability to ask multiple questions, on an ongoing basis, it suddenly becomes an incredible powerful data source.
Ultimately however, no CMO should rely on a single knowledge or data source, and they should choose their priority sources with great care, always questioning the reliability and accuracy of the source in question.
3. Ask the right questions
Irrespective of the quality of the data source, if a CMO asks the wrong questions then the data they turn up will be of little value. For example, in the research world, surveys are too often designed to ‘prove’ a preconceived notion rather than to genuinely explore consumer sentiment. The business has already decided the direction of travel, and the research ends up being far too leading, rather than testing whether the chosen strategy is in fact a viable strategy.
Always think twice about the questions being asked and where there is any inherent bias contained within them. Remember that leading questions can serve both sides of an argument, and thus rarely deliver the type of profound insight that a CMO needs to rely upon.
4. Apply them to the right frameworks
Once you have the data, it’s just as important you know what to do with it. This is where frameworks become useful.
Blue Ocean Strategy is one powerful way to plot the data you have. Here you plot along the X-axis all the things you think consumers find important e.g. speed, quality, cost, choice etc. and then on the Y-axis you have a scale from not important to very important.
With your consumer intelligence in hand, you can now accurately plot where consumers place the most value across the X-axis variables. If you’ve also gathered intelligence on your brand and your competitors, you can now plot that data against the ‘ideal’ scenario. Voila, you’ll quickly see where there are gaps in consumer demand that your competitors aren’t filling. You’ll also see where you are doing well, or falling short, so you know how to improve. And finally you can see your competitors strengths and weakness too, so you have a well-informed game-plan on how to best them in the market.
5. Trust the results
The problem with data is that it doesn’t always tell people what they want to hear. This can place CMOs in a perilous position. Their data gathering has led them to question the strategy being pursued by the CEO - possibly the founder of the business, and thus rather precious about the enterprise. Do they share the data and point to the apparent weakness in approach, or do they dismiss it and revert to someone else’s gut instinct?
Gut instinct rarely delivers 20% growth or more, year on year. Accurate, well-considered data pooled from reliable sources is the lifeblood of every healthy business and will underpin every single strategic decision being taken. It always makes more sense for the CMO to trust the data and speak their minds, because failure to do so will invariably hamper the business’s prospects further down the line.
6. Share the insights
The importance of communicating the data - irrespective of what it says - should not be understated. Achieving the Growth Imperative requires the entire organisation to maintain a singular focus.
If specific teams or team members don’t have access to the results, they aren’t being given the insights that underpin the decisions being taken at the top, and they’re more likely to stray into committing time and resource to ventures that don’t ultimately support the core objective.
The days of CMOs being protective of their data sources - particularly their market research or consumer intelligence partners - need to come to an end, and fast. A wider set of stakeholders should be encouraged to utilise these vital resources on an ongoing basis so that everyone ends up fully informed and clear about why the organisation is doing what it is doing.