Robert Malcolm, former President – Global Marketing, Sales and Innovation at Diageo PLC

In the course of his tenure as President, Global Marketing, Sales and Innovation at Diageo PLC, a position he held for nine years until his retirement from the corporate world in 2009, Rob helped transform the world's largest drinks company into one of the premier marketing – and marketing training – companies in the world.

What have you learned about global branding and local marketing over your career?

To successfully do this, you've got to be very clear on why you're doing it and whether the value of managing a brand globally is really worthwhile. It's not always the case that managing your business globally is the value maximizing equation. But then once you decide that there is more value in doing it than not doing it, like we decided at Diageo, you need to be very clear on where the value is: Is it scale? Is it power? Efficiency? Because if you don't know where the value is, you'll struggle to optimize your model.

For Diageo, we sold the exact same products and packages in every market, so we had value in scale. And when we did the research, we determined the consumer motivations for purchasing and consuming beverage alcohol brands were very similar country by country. So there was a common consumer motivation which lent itself to marketing strategies and ideas that would travel.

Take the Johnny Walker story. From 27 different advertising approaches from 12 different agencies, we got to one consumer motivation, one positioning, one big idea. And then – and this is where the magic is – we determined how to execute that idea best, both taking into account the desire for scale but also the importance of local relevance. We did some advertising at a global level, but quite often we developed local work and local adaptations of the same campaign idea that brought that idea to life in the most powerful way locally.

What new challenges and complexities face global marketers today?
 
The first challenge is a leadership challenge that the marketing leadership needs to take one to manage the complexity. And the complexity takes multiple levels; from leadership complexity in managing all of the stakeholders within the corporation, to the increased complexity in the practice of marketing. To be a senior marketer, you must be great at managing the leadership agenda and managing the functional marketing agenda.

Within that functional marketing agenda, the marketing environment has changed quite a bit. The empowered consumer is taking more responsibility for deciphering and managing the choices they make and the brands they use. There is also the radical increase of complexity in the tools and techniques brought on by digital technology and the generation of social networking.

To navigate that complexity, marketers have to have a navigation strategy. They need a very clear idea for what works for their brands, and they must have the common tools and practices that allows everyone in the organization to work off the same sheet of music, if you will. And what marketers must be careful about is not to throw up their hands and say, 'The sky is falling, the marketing world is broken.' They must actually have the confidence to know what they're doing but also the curiosity to start experimenting with what they don't know.

How do you combine the need for rigorous analytical discipline with the desire for creative flair and make it work in a global marketing organization?

First of all, we declared our success would be based on rigorous analytics combined with explosive creativity—those are the words we used, rigorous analytics and explosive creativity. And Diageo's whole way of brand-building was built on a very disciplined process of getting the front-end thinking and strategy based on rigorous discipline. We knew where we were trying to go and we knew how we were going to get there. We could then have the confidence and the freedom to take the leaps of explosive creativity because we had the rigorous discipline as the foundation.

Secondly, you have to have the creative partners who can work with a budget and get the creative partners that can bring magic on top of your discipline. Next, you have to insist and reward the things you're asking the organization to do. As a leader, you have to role model both halves of the equation—you have to measure them, and you have to reward them. And finally, you have to have the talent that can do both, be creative and analytical. I describe it as whole brained marketers who have the facility to move back and forth between their analytical brain and their creative brain.

What made "The Diageo Way of Brand Building" effective and successful?

We started with an external focus, not an internal focus. We studied all of the best practices on how marketing was done in other companies, agencies and research companies, and identified what we wanted to borrow and adapt. So we came back inside and took that external learning and built our own tools process, language, culture and ways of working.

We also knew from studying change management that this was going to have to be bigger than your everyday capability-building program. You have no hope running an organization globally if you don't have common tools, processes, cultures and beliefs in place. So this was going to have to be the new way Diageo did marketing and would have to completely replace the old tools and languages. Because of that, we knew we had to teach it and train it ourselves; we had to own the outcomes, train and teach it top down and not bottom up, because every level of management needed to understand what we were trying to do. So we actually took the Diageo executive team through the courses before we taught any marketers.

And with the executive buy-in, it became the company's work—led by the CMO for the marketing function—and not just some funky marketing priority separate from the corporate agenda. It's essential that the CMO get that commitment and leadership and support. The CEO and his top team went through the entire program offsite for a week, which was a commitment. But they came out convinced it was outstanding, and we leveraged their endorsements and support as we cascaded it to the next levels down.

Often you’ll see an ad that was very funny or likeable, but it doesn’t resonate with people. Or you’ll see a high likeability score, but it doesn’t have information or relevance and doesn’t score well. So it’s really about having that balance between a watchable, engaging ad with key dimensions of information and relevance that make it stand out.

What advice can you give global marketers facing organizational transformation imperatives?

Step up to their leadership responsibility in setting strategies, priorities and the expectations. Gain complete and full alignment—almost co-ownership of the C-suite. Too often marketing leaders work in their own silo improving the marketing. But really, that is a corporate priority and needs full buy-in and support of the C-suite.

Second is to be very clear on priorities and put specific plans in place to deliver those priorities. Third, get alignment. Often, this stuff all falls apart because there is no alignment. And finally track your progress against your plan, report on that progress back into your C-suite and your teams, and then correct and modify regularly as you get feedback.

Why CMOs Should Lead Culture

by Monique Reece, CEO of MarketSmarter

As I was researching data related to business growth for my latest book, I came across a statistic that literally shocked me: 90 percent of employees do not understand their company strategy. Think about this for a moment because the consequences of this reality are huge. If the people who are responsible for executing company strategy don’t understand it, it can’t possibly be executed. The real issue is discovering the underlying cause of the problem, why don’t people understand their company’s business strategy, and the answer is company culture.

Culture is more important than strategy because even as you develop the most brilliant strategy to win in the market, if the culture and enabling systems cannot support its executive, the strategy will fail. Another reason why company culture is (or should be) one of the most important things on your radar is because companies with thriving corporate cultures make more money and are substantially more profitable than those that do not.

Let’s first look at the statistics supporting this statement, and then why it makes sense for you as a CMO to own and lead this important function.

Simply stated, company culture is comprised of the actions, beliefs and behavior for the way people work together in an organization. Although these things might appear as “soft” attributes, they actually drive very hard and indisputable business metrics. According to several recent studies, culture and financial performance are directly correlated:

• Profit per employee increased from $7,802 to $27,401
• Employee turnover was reduced from an average of 25% to just 10%

• Revenue growth over 400% faster
• Job creation rates 700% higher
• Stock prices grew 12 times faster
• Profits were 750% higher
• Net income grew by over 700%

While culture’s importance to business growth may seem intuitive, these statistics back it up. If you want to make a case for why your company should focus energy and resources on developing a thriving company culture, you should always start with the business case for culture change.

So whose job is it to oversee company culture? The mandate nearly always comes from the CEO, but she/he cannot possibly be both the evangelist and the implementer of culture. Moreover, if this important task is simply left to be cascaded down from the executive leadership team through the organization, it is unlikely to happen. Someone must own it or it won’t get done. Though company culture is everyone’s job, the implementation of programs that support and sustain a thriving company culture depend on someone assuming leadership for their execution. Let’s talk about why this person should be you.

I am issuing a call to action to all CMOs to take responsibility for your company’s culture. As marketers you are uniquely positioned to assume this powerful role in your organization. The responsibility for being the facilitator of culture is not only closely aligned with a CMO’s current responsibilities, it will help you fix many long standing issues like breaking down the wall between sales and marketing, strategy alignment and communication, and optimizing budgets and resources to improve customer experience. Among the reasons why culture should be part of a CMO’s responsibilities include the following:

External Brand is a Mirror Image of the Internal Brand

Marketing is clearly responsible for external branding, but the hard work associated with brand messaging and positioning becomes diluted, or even irrelevant, if the internal brand (or company culture) is not aligned with the external brand. The internal brand must be a mirror image of the external brand or there will be a huge disconnect in customer experience.

90 Percent Employees Don’t Understand Company Strategy

Fixing this problem must become a priority. If the process of cascading communication from the leadership team is not working, what can you as a marketer do to drive change? Since internal communication is owned by marketing, it makes sense for marketing to add or improve cultural communication to their internal programs. Note that research studies prove that companies that make mission, values and communication best practices in their organization are the most successful; therefore, if you want to improve company culture and internal branding, your programs should start here.

Marketing is Not a Department, It’s a State of Mind

Marketing and innovation are the drivers to understanding and fulfilling customer needs, and without satisfied customers to buy products and services, a business does not exist. It’s time to start a conversation about what marketing really means, not just as a role, but also as a way of managing the business. As the brand steward, the CMO becomes the central facilitator to help teams across the organization to think like marketers. It may require you to think very differently about budgeting, organizational structure, how teams work together, and how results are measured. In this redefined role, everyone aligns around customer needs.

Break Down the Silos Between Marketing and Sales

It’s no secret that one of the biggest impediments to improved revenue generation is the ongoing conflict between sales and marketing departments. Since sales teams own the customer relationship and marketing teams are responsible for improved customer experience, company culture provides a way for both teams to work together toward a common goal. They can work together to inform and educate other teams about what customer focus really means. By improving organizational focus on customers, you will gain sales’ trust. Likewise, marketing support from sales teams will make your job easier, and it will also improve program results.

Organize Around Customers, Not Products

While many sales executives say the best way to improve relationships with customers is to align around customers and not products, only 31 percent successfully implement business centric approaches to organizational structure. Here’s the good news. When a company focuses on improving culture, it also becomes more customer focused. As a company becomes more customer-centric, the organizational structure is also more likely to evolve.

Increase Your Marketing Budget and ROI

One way to increase both your marketing budget and program ROI is by focusing on creating customer-focused culture. Unfortunately, many organization’s fund departments, products and programs while neglecting cross-functional goals and objectives. For example, a typical marketing program may drive sales from a specific target market or customer group, regardless of how many teams are responsible for implementing and delivering the brand promise communicated to customers.

However, marketers, salespeople, call centers, fulfillment and operations teams, accounting and customer service all have a role in the execution of programs. If several parts of the organization are responsible for executing programs that drive revenue and customer satisfaction and experience, then it only makes sense that several departments should jointly contribute to the planning, budgeting, and ROI measures. The outcomes from this approach to budgeting and measurement have benefits that exceed long-term growth. When multiple business leaders agree on strategy and mutually fund projects as investments, it changes how teams work together. It improves how people communicate and collaborate, and it expands the value customers receive leading to deeper customer relationships.

All of these factors affect employee satisfaction and loyalty, which result in reduced turnover and better customer satisfaction—two areas that drop directly to the bottom line. If we adopt a holistic approach then marketing is not simply perceived as a cost or evaluated by the success of a single program. It becomes an investment in the long-term growth and profitability of the organization, and an integral component of the entire management process. This approach requires a great deal of collaboration and consensus within a leadership team and a clear and compelling vision of mutually shared goals.

Monique Reece is the CEO (Chief Evangelizing Officer) for MarketSmarter, a marketing training and advisory firm that works with organizations to create a culture of execution. She is the author of Real-time Marketing for Business Growth: How to Use Social Media, Measure Marketing and Create a Culture of Execution. She can be reached at Monique@marketsmarter.com or connect via her blog.