Get Comfortable With Unknowns

Key Skill: At a Time When CMOs Are Expected to Measure Everything, They Must Also Manage Uncertainty

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Photo: Michael Westhoff

Read the business press today and your heart can easily bleed for chief marketing officers. Their average tenure is estimated at 26 months, they're slammed for not connecting their efforts to meaningful, positive return-on-investment numbers and many are condemned for lacking the ability to communicate with CEOs. Most often judged against short-term metrics, CMOs still persist in positioning their value in terms of their long-term impact.
In reality, however, CMOs are usually tackling so many strategic issues that most rarely think beyond the next quarter.

But marketing in today's ever-changing world can be successful only if executive marketers understand future trends, not just on a conceptual level, but understand and integrate the implications of those trends into their brand definition and communications of today.

CMOs, if they want to stick around, need to know how to translate future-focused scenario planning into actionable marketing strategy today. Sadly, most do not.

No crystal ball
In truth, no amount of analytical insights can ever fully account for the uncertainty and unpredictability of future events -- and uncertainty is the reality of today's marketing where consumers change preferences like never before and where brands fight for attention in an ever more crowded space.

Rather than attempting to predict the future with total accuracy, it is more important to build structures, tools and methodologies to deal successfully with uncertainty. And also to ensure that any insights harvested from a managing-uncertainty approach provide clear and actionable implications for current marketing strategy and decisions.
Today's marketer faces three strategic issues while creating relevant interactions between brands and consumers: Unpredictability, nonlinearity and the need to deal systematically with both challenges -- without the hubris of ever mastering them. Marketing issues now are all about the loss of control and the uncertainty created by the nonlinear interaction between brand and consumer. It's not about solving uncertainty, but living productively with it.

Build a culture
To build a culture to manage uncertainty, CMOs do three things:
  • Embrace uncertainty. The challenge is not about eliminating every single aspect of uncertainty but to approach a higher-accuracy level of prediction.

  • Recognize nonlinear realities. Today's interactions between consumer and brand no longer follow a strict and limited set of funnels or patterns but can be as diverse and varied as the consumers themselves.

  • Marketers need to design tools and mental frameworks to deal with uncertainty, not to increase the quality of prediction by a few percentage points, but to have them in place to manage and cope with unpredictable factors.
The tools and framework would consist of deciphering the most important trends relevant to a particular category -- for example, a combination of existing secondary research from big-trend providers such as Roper and Jupiter; a deep immersion into the minds of representative consumers; and a trend-scoring mechanism leveraging a group of experts from different marketing and category disciplines who score trends against key variables. The weighted sum of all the variables needs to help rank the trends by general importance and future impact for the analyzed brand, making it easy to identify influential trends to consider.

Brand scenarios
Here's an example: Imagine a hypothetical product called Green Candy that has a significant leadership position in its category.

Those marketing Green Candy want to understand where the product can be in three years. The involved marketers are concerned that their category is changing so rapidly they are not able to position the Green Candy brand for long-term success. The brand manager suspects that every marketing communication takes all presently known factors into account but never plans for a future scenario.

Rather than attempting to predict every possible aspect, Green Candy's CMO chooses to focus on four significant areas of possible change: the candy-eating consumer, the category itself, the environment and the communications. The CMO charges an assigned multidisciplinary marketing team with identifying the three most important trends in each area, an effort that ultimately results in several potential scenarios for Green Candy.

This defines three distinct, vastly different brand scenarios. In the first, Green Candy expands its leadership position significantly. In the second, the product stagnates and slightly loses market share. And in the third, Green Candy is marginalized in the category.

Making a decision
Using the scenarios, the marketing team can decide strategically which brand scenario is the most desired and see shifts in trends that modify the overall landscape of the candy category. This guides the team's key marketing discussions and decisions in building current communications for Green Candy.

Whether the CMO and the brand manager evaluate the annual marketing plan or simply a small print ad, the filter for supporting, opposing or changing the recommendation includes the question: What does the marketing strategy or tactical expression do to position the brand not just for success in today's marketplace but for success in the desired scenario? Clearly, the marketer must take into account the identified core trends in making the marketing decision for the brand.

For Green Candy, the CMO made three decisions that would have looked different without the "uncertainty" methodology. First, he moved significant marketing budget dollars from the candy's key European market to two developing countries, thereby doubling marketing spend in these critical markets. Second, he forced the brand team to position Green Candy slightly differently for Hispanic consumers, using a specific, previously unplanned-for product extension. And third, the CMO decided to streamline communication efforts on a global scale, ensuring that Green Candy carried the same brand expression across countries.

The future will always be uncertain, but marketers don't need to be fatalistic. Smart CMOs can develop a marketing organization that is more adept at dealing successfully with it. Any CMO can get ready by understanding the key drivers that create uncertainty in their particular category -- and by assembling a team that can adapt on the fly.

Five steps

Marketing decisions today are becoming more complex and multilayered, making "managing uncertainty" the only approach for ensuring future-oriented decisions. In seeking to develop a marketing organization that can manage uncertainty, CMOs should focus on five key actions:
  1. Analyze trends: Create a multidisciplinary team for a brand; challenge it to identify three brand scenarios with a three-year horizon by analyzing the most influential trends within the environment, category, consumer and communications.

  2. Present scenarios: Present the three brand scenarios to the executive marketing team and decide how the attempt to reach the preferred one will change the brand's marketing plan for the next 12 months. Be sure to agree on significant modifications.

  3. Review changes: In each quarter, review changes in each trend area. If major shifts are realized, update the brand scenarios. Start a full, fresh "managing uncertainty" process annually.

  4. Build a team: Build a virtual "managing uncertainty" team that can train key parts of the marketing organization to think beyond today and the next quarter.

  5. Think ahead: Think of yourself not as the chief marketing officer but the chief managing-uncertainty officer. Always ask what can or will change during the next three years and how that might affect today's marketing -- i.e., spend or packaging.
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