• October 1, 2008
  • By Jessica Tsai, Assistant Editor, CRM magazine

Required Reading: United We Stand

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In the Civil War, our warring states took four years to unite as a cohesive nation, but it’s taking marketing departments decades to come together—admittedly, with less brutality, but with no imminent end in sight. A winning strategy, however, is hardly top secret. In his latest book, Spanning Silos, David Aaker, vice chairman of the consultancy Prophet, sympathizes with marketers on what he deems “the marketing problem of our time.” What worked a hundred years ago is no longer suited for today’s industry standards. Business demands are calling for a company that has control of all its arms and legs. Assistant Editor Jessica Tsai spoke with Aaker about the plague and the panacea:

CRM magazine: How did silos come about in the first place?

David Aaker: The people running the businesses are close to the product, close to the marketing, fast responses, little bureaucracy. So there’s good reason why these siloed organizations are in place. They have a lot of great attributes.

The problem is the world has changed and [silos] are no longer viable. You can’t exist with them. The old media’s declined and in its place are new media that don’t work well in a siloed context. You have these brands that span more products and countries, and brands are the basis of business strategy so you can’t allow them to be diffused and run inconsistently over silos. With more competition, the inefficiencies just don’t work.

CRM: How vital is the role of the chief marketing officer to an organization?

Aaker: There’s this phenomenon of the CMO—everybody sort of gravitates toward it as a solution, but then you have this remarkable statistic that the average CMO lasts under two years, whereas the average CEO lasts 56 months.

There’s just no question that enormous waste comes from misallocation of resources across silos, brands, marketing programs—and that, by its very nature, has to be dealt with from an organizational perspective. It has to be dealt with in an objective, analytical methodology because it’s so political—everybody’s so protective of their budgets, of their silos. One of my learnings was that standardization and centralization may be part of the solution, but that should not be the end goal. Too many CMOs come in and move too quickly, and try to establish authority over the silos. If there’s to be any improvement, it has to be faced with objective, analytical methodology that comes from somebody with great credibility.

CRM: How can the CMO begin building credibility without being threatening?

Aaker: [Easy wins] are one way to show some visible successes, but there also needs to be a program to gain CEO support. You can start talking in the CEO’s language—talk about “efficiency” and “cost reduction,” rather than “marketing synergy.” A lot of the siloed problems, then, will become part of the CEO agenda. Another way is...if you can quantify some of the advantages of addressing these problems, then the resistance melts away and you’ve got the wind at your back. [Also], get customer knowledge.... The customer’s opinions become really influential and help you make the case.

CRM: With technology playing a bigger role, how is that going to contribute to this effort?

Aaker: Teams and networks are among the most important tools a CMO can use.... If you can get people to have relationship and communication channels across silos, good things can happen. Virtual teams and networks can operate across countries [and] offices. Teleconferencing has a modest impact [now]; most people use audio conferencing, but on the horizon, new technology is going to change that.

CRM: What are the cultural challenges the CMO continues to face?

Aaker: The motivation to change is lacking.... The process, the incentive, the people—they’re all oriented toward the siloed objectives. You have to change the whole organization, and that’s really hard. It’s hard for the CMO to have adequate budget and authority, and worst of all, there’s usually inadequate talent around to pull it off. So even if you know what to do to have these resources to make it happen, it’s not at all automatic.

CRM: How much time should CMOs be expected to effectively span silos?

Aaker: It’s going to take some companies 15, 20 years. It has to be viewed in the long term. Some companies can do it in two to three years, but the stars have to be aligned for that to happen. Usually it should be considered a decade’s program.

CRM: Is it practical to expect companies to give CMOs that decade?

Aaker: Organizationally, that’s the reality. Along the way, you can make enormous progress.

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