A CMO's Guide to Winning in the Turns

October 14, 2019
Contributor: Laura Starita 

Why organizations who lean into uncertainty or "turns" emerge ahead of competitors.

Swirling uncertainty about the economy has business leaders thinking that leaner times could be on the horizon. Yet marketers are optimistic. Although the Gartner CMO Spend Survey 2019-2020 shows a slight decline in marketing spend, CMOs are continuing to invest in the core capabilities needed to compete. By all appearances, marketers are prepped to accelerate into the next turn.

A “turn” is Gartner vernacular for a moment of uncertainty. In sports such as speed skating or Formula 1 racing, turns can be unpredictable due to poor visibility and dangerous conditions. There’s an instinct to slow down. Those who lean in or speed up instead can emerge in the lead on the straightaway.

The same is true in business. When faced with uncertainty, leaders might halt investment or cut costs until signs are clearer. But Gartner analysis of firm growth during and after the 2008 economic downturn shows that the companies that resisted the urge to cut costs across the board, and instead continued selective investments in core capabilities, recovered sooner and grew faster in the following decade.

“Leaders broke away from the competition and achieved efficient growth,” says Ewan McIntyre, VP Analyst, Gartner. “A select few companies — 60 of the largest publicly traded companies in the U.S. and Europe — ended up as winners. In these organizations, the actions of the executive team created the core strength required to win in the turn. This select group sustained their outperformance for the subsequent decade. So how you exit the turn can determine your long-term destiny.”

Marketers who do best prepare for turns by taking three key actions:

 

Adopt an agile approach to marketing strategy planning

Turns come in many forms, not all of which are easy to see from a distance. Marketers may be on a turn’s leading edge before they realize it’s there. Once in, they need to make decisions fast.

To prepare, adopt an agile strategic planning approach. Gone are the days when CMOs could take months to develop a two-to-three-year strategic marketing plan. Instead, take a short time to produce a “minimum viable plan” based on the best information you have at the time on customer behavior, market conditions and likely events.

Once the plan is underway, assigned members of the marketing team continuously monitor the business environment for change. If a key planning assumption turns out to be wrong, a new issue arises or events take place that challenge the plan, the team adjusts accordingly.

Decide in advance which issues are likely to have substantive impact and which are run-of-the-mill. One  paper company creates an assumption matrix in which it maps issues based on their likely impact on the business. That way it can focus resources on important issues and prevent overreaction.

Accelerate investments in growth and elevate innovation funding

It’s human instinct to hunker down in lean times. If told to lower their burn rate, marketing leaders might immediately halt strategic projects.

Before doing so, consider the long-term impact of cuts on the firm’s ability to compete. Will cuts keep you from delivering on promises to customers? Will canceling a martech project put the company permanently behind its competition?

Taking the long view doesn’t mean you won’t look for ways to reduce spending, but the approach should be to cost optimize rather than cost cut. Improve efficiency and increase productivity while protecting the funding for strategic activities.

Here, too, planning is essential. Marketers should take their cue from Danish toy maker LEGO, which sets likely-case, best-case and worst-case budgets every planning cycle. LEGO moves forward under the likely plan, but can pivot quickly in a downturn because leaders know in advance which costs they can reduce without damaging future opportunities.

Identify and install your team of the future

Good people behind the wheel and manning the pit stops are key to thriving through turns. Organizations also need to protect training and hiring programs focused on the skills that will drive future growth.

To maintain, and even grow, talent quality during challenging times, have a clear view of needs and wants. What are the minimum staffing levels needed to run the organization? What skills are necessary for success, now and two years from now? What do you need to develop in-house and what can agencies provide?

If staff reductions are necessary, be strategic about you handle them. Merit-blind methods — for example, removing highly paid veterans or last-in, first-out approaches — damage the organization’s future and hurt morale.

Agile planning, continued innovation and a team built for growth enable marketers to maintain momentum through uncertain terrain. 

Learn more about how to win in the turns in the complimentary research “Winning in the Turns: A CMO Action Guide — How Leading Brands Outperform in Uncertain Times,” by Ewan McIntyre and Sally A. Witzky

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