Our Biggest Brands Can No Longer Be Managed By Nerds
The crisis has been building for years and is now unavoidable. And because the wounds are self-inflicted, we cannot rely on the patient to heal itself. A quick review of industry news confirms this:
General Mills has identified their recipe for future growth. They're "anticipating a rise in multicultural consumers, particularly Hispanics." Apparently, they've also discovered that baby boomers are aging, and boomer children are more tech-savvy than their parents. Breathtaking, breakthrough stuff.
Kraft Foods is touting their "bold," "top-to-bottom" "marketing makeover." But the enduring images from the article are of Kraft executives wandering Cannes, contented dinosaurs and vanilla creative.
Industry researchers and academics have also recently weighed in with their diagnoses and prescriptions:
In "Adaptive Brand Marketing," Forrester Research first suggests brand "managers" be renamed brand "advocates." Then, the authors also recommend restructuring the brand manager role to better accommodate the "real-time digital world." To better fit less than 10% of a CPG brand's marketing budget, we should revamp the entire brand-management system?
In "Call to Action," authors Carl Johnson and Henry Rak contend that weak brand-building skills have forced the CPG industry to a critical juncture. They offer several very logical prescriptions. But like so much of the brand marketing they're despairing, their solutions are half measures, completely "by the numbers."
We don't need a "call to action," we need an intervention.
More data is not better data
Marketing departments used to be the creative engines powering successful corporations. Now they're overrun by number-crunching nerds. As a direct consequence, despite all the conspicuous focus on "change management," the way brands respond to change in the marketplace has deteriorated. A McKinsey Quarterly article several years ago argued that the key to "better branding" is to build brands "more scientifically." If managers would combine "forward-looking market segmentation" with structural-equation modeling, they could "build a better brand more efficiently." In short: more data, more regressions and more conjoint analysis mean the "brand crisis" is solved.
But fluency with buzz words and expertise with spreadsheets do not guarantee brand-marketing competence.
No one would argue with the objectives and need for consumer research. But brand marketing is not a science. It requires analysis, discipline and detail. Even more, it requires intuition, flair and vision. Great marketers are visionaries, not bean counters. They succeed by defying conventional wisdom. They see over the near horizon, envisioning products and ideas long before the average consumer even senses a need for them. Nothing captures this principle better than the adage, "If Edison had done market research, he would have invented bigger candles."
That statement restated for today: "If Howard Schultz of Starbucks had done market research, he would have invented ... Pepsi A.M." Consider what the "numbers" would have told you in 1987 when Starbucks began its national expansion: Per capita coffee consumption was in the midst of a continuing 25-year decline; conversely, soft drinks were experiencing uninterrupted growth. Consumers were "time-starved." Brand manager dogma was "convenience is the new currency." But Schultz had a vision and a big idea. By making Starbucks a special experience, he knew he could get time-starved consumers to make a separate stop on their way to work to buy high-priced fancy coffee drinks.
There are really only two successful business models. One is cost leadership: Deliver your product to an existing market with lower prices and/or higher quality (Dell, Walmart, Southwest). The second is creating and satisfying a completely new market (Starbucks, eBay, iPod). Effective brand-building is a critical component of both, but the two models require very different managerial thinking. The cost-leadership model requires a highly inward, focused skill-set; the new market model is more focused on the external consumer environment. Companies with large product portfolios should have brands in both situations, and a given brand's position must evolve as the external marketplace changes. It's hard to quantify, but clear to anyone who has spent any significant time with a major corporation, nerd skills and thinking are most valued in CPG corporate America. Setting the budget, revising the budget, gaming the system, improving existing margins, and controlling costs all exhaust a brand manager's time and require an internally focused skill-set. External-looking activities are confined to the third afternoon of the key executive golf retreat. Companies need both skill-sets, but currently value only one.
Pendulum has swung too far
The quantitative "MBA aspects" of brand management are vitally important. Ignoring the numbers and just "going with our gut" can be an even worse sin, and result in ... frankly, almost every one of this year's Super Bowl spots. But the pendulum has clearly swung too far. The result is today's brand manager who (paraphrasing David Ogilvy) uses data, "the way a drunk man uses a lamp post, for support rather than illumination."
Magnifying the problem, as the pace of external change increases and as margins are improved in smaller and smaller increments, the need for creative, imaginative thinkers and problem-solvers increases. Unable to conjure up anything new or compelling to say about their brands, the "numbers" managers chose to compete on price and promotion: defeatist short-term tactics. Instead of creative strategies yielding a new Marlboro Man, we have the UPS whiteboard guy. Instead of bold new brands, we have "flankers," "line extensions" and "brand expansions."
"The Research Paradox" explains some of the mediocrity. As market-research techniques have gotten better and more elaborate, the insistence that marketing decisions be thoroughly backed by the "numbers" has become even more pervasive. This requires ever more quantitative managers who spend even more of their time and energy poring over the data. The result is a crop of quant-jock brand managers just like the McKinsey authors who lean on the data to tell them how to build their brands. Theodore Levitt warned us about this possibility in 1960 in his seminal article "Marketing Myopia." Describing the risk of a technology-oriented management structure, he predicted "the bias in favor of dealing with controllable variables." Engineer-managers want to focus on "what they know and what they can control." Consumer behavior is not a controllable variable. Instead, he wrote, consumers can be, "unpredictable, varied, fickle, stupid, short-sighted, stubborn and generally bothersome."
Great brand marketers are comfortable with ambiguity. They realize marketing is a balancing act -- it's numbers and detail, but it's also flair and vision. It's qualitative and quantitative; analysis and intuition; perspiration and inspiration. Great marketing requires the balance of both sides of the brain. But the balance has been lost.
Be like Luke Skywalker
So how do we wrest control back from the nerds? I offer two terrifyingly intuitive solutions. First, we can break the current self-perpetuating nerd cycle by hiring and promoting different people -- it's a proven fact that managers tend to hire people just like themselves. Second, every once in a while, even when the numbers don't quite line up, we can promise to trust our gut and intuition. Be like Luke Skywalker. At the end of the original "Star Wars" movie, in order to make the "impossible shot" and destroy the Death Star, Luke shuts off his computer and chooses to trust his intuition. The nerds at headquarters are horrified. But the Death Star explodes, the audience cheers and we learn a life lesson we all promptly forget. Let's resolve to "use the force." Or something nerdy like that.
ABOUT THE AUTHOR