How To Be A Marketing Leader

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How to be a marketing leader in the

new economy –

Learn the 5 secrets of value creation

2

In a nutshell …

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“ Marketing is the essential, ubiquitous task of management…

…the purpose of which is to create a customer…

…by understanding and meeting basic

societal needs.” - Peter Drucker

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I The Great Reckoning

II The identity-value creation connection

III The science of identity

IV Secrets of value creation

V Marketing leadership

The story in brief

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I The Great Reckoning(puts the spotlight on

value creation)

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“The crisis was the result of a perfect storm – everything that could go wrong did.” Steve Forbes

“A series of life-threatening problems within many of the world's great financial institutions was unveiled.” Warren Buffett

“In this reset economy, we have an opportunity to grow GE over the long term…in ways that drive customer productivity.” Jeff Immelt

The Great Reckoning

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An economic “reset” = a marketing reset

The Great Reckoning

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II The identity-value creation connection

(is the “reset” key for marketers)

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“Identity” is a company’s …

A.Name + logo

B.Tagline

C.Design system

D.Brand

E.All of the above

F.None of the above

The identity-value creation connection

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Identity, the human phenomenon

The identity-value creation connection

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Identity, the organizational phenomenon

The identity-value creation connection

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What is “identity?”

The unique set of characteristics that reveal one’s value-creating potential

The identity-value creation connection

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Dow Chemical’s value creation challenge:

• Slow growth for many years (3 – 4%)

• Solid attributes… quality, trustworthy, reliable, committed

• No answer to the question: What makes Dow, Dow?

The identity-value creation connection

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Five institutional capacities distinguished Dow:

• A genius for “life-changing” customer relationships

• A passion for scale

• A talent for “whole system” thinking and action

• An obsession with improvement

• A bias toward the essentials of life

The identity-value creation connection

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Dow’s consumer impact highlighted the company’s focus on “the essentials of life.”

Market %

Food 21.5%Household & Personal Care 14.9%

Building Maintenance & Construction 10.9%Transportation 10.2%

Home Care & Improvement 7.9%Paper & Publishing 5.9%

Furniture & Furnishings 5.6%Electronics & Entertainment 5.4%

Health & Medicine 3.2%Water Purification & Waste Management 2.9%

Miscellaneous 2.5%Heavy Construction 0.2%

Oil & Gas 8.9%

100.0%

The identity-value creation connection

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The identity-value creation connection

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1999 • $18+ billion sales • For years, only GDP growth (3 – 4%)

2008 • $50+ billion sales • Since1999: 13% annual growth rate

The identity-value creation connection

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Identity, the marketing phenomenon

The identity-value creation connection

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III The Science of Identity(emerges)

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The Identity Impact Survey (Summer/Fall 2009)

• One-year effort

• 1,941 respondents

• 5 companies (21 candidates)

$50MM to $8 billionGlobal and domesticPublic and privateB2B and consumer

• Sophisticated psychometrics

The Science (emerges)

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Organizational and Individual Identity Strength have a major impact on employee engagement and employees’ resultant commitment to the brand (r = .686)

What’s the payoff?

Identity strength is a leading indicator of a company’s value-creating capacity …

… and holds crucial business implications

Constrained value creation •Handcuffed financial performance•Inefficient strategy deployment•Limited innovation •Overpromise, under-deliver on brand•Low-traction culture•Lower investment value

High value creation •Superior financial performance•Effective strategy deployment•Efficient innovation•Strong brand•Responsive culture•High investment value

Low value creation•Sub-par financial performance•Ineffective strategy deployment•Depleted innovation•No meaningful brand•Dysfunctional culture•Low investment value

Pent-up value creation•Limited financial performance•Inefficient strategy deployment •Limited innovation•Brand confusion•Diffuse culture•Lower investment value

IV Secrets of value creation(and the marketing action

each implies)

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1. Value is the proprietary contribution a company is capable of making …

• In the marketplace

• In the world

Secrets of Value Creation

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1. Value is the proprietary contribution a company is capable of making …

Marketing action:

Clarify and invest in your company’s unique, value-creating capacities

Secrets of Value Creation

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2. Identity is the source of value creation

• Provides a center of gravity for all decisions and actions • Yields a sustainable competitive advantage, by leveraging unique, institutional capacities

• Leads to developing the “right” products for the right reasons

• Fosters “efficient innovation”

• Inspires a timeless brand

Secrets of Value Creation

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2. Identity is the source of value creation

Marketing action:

Crack the code on – and “market” – the identity of your company.

Secrets of Value Creation

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Secrets of Value Creation

3. Value creation drives wealth creation

Employees (create value)

Customers (purchase value)

Investors(finance value)

Suppliers Communities

Government Unions

Direct

End users

Society

Analysts

Portfolio managers

Shareholders

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3. Value creation precedes wealth creation

Marketing action:

Align the interests of all stakeholders to the company’s advantage.

Secrets of Value Creation

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4. Value is maximized when it is created onfour levels, simultaneously. Value for …

 Individuals – products and services that spur creativity and productivity

Businesses – solutions that improve customers’ performance

The industry – innovations that increase the overall impact of that industry on the economy

Society – changes that meet fundamental needs, which improve people’s lives 

Secrets of Value Creation

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4. Value is maximized when it is created on 4 levels, simultaneously.

Marketing action:

Market comprehensively – answer individual, business, industry, and societal needs, simultaneously.

Secrets of Value Creation

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5. All value flows upstream. • No matter where a company is on the value chain, success depends on its contribution to the well-being of end-users

• Developing institutional roots is the key – Building a relationship with the society or culture of which the company is necessarily a part.

Secrets of Value Creation

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5. All value flows upstream.

Marketing action:

Market the “institution” not just the business – become a societal brand

Secrets of Value Creation

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V Marketing leadership (in the new economy)

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1. Clarify and invest in your company’s unique, value-creating capacities

2. Crack the code on – and “market” – the identity of your company

3. Align the interests of all stakeholders to the company’s advantage

4. Market comprehensively – Answer individual, business, industry, and societal needs

5. Market the “institution” not just the business – Become a societal brand

Marketing leadership in the new economy

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The problem: Wealth creation before value creation

The solution: Value creation before wealth creation

Who: Marketing

Why: Guardians of value creation

How? …

Marketing leadership in the new economy

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From survival of the fittest to survival of the finest

• Purpose guides profit• Contribution dictates reward Everyone may make money, but the "finest" institutions will emerge as our new economic leaders …

…Companies that not only stay financially solvent, but who cultivate strong value-creating cores.

The Great Reckoning

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