Has marketing taken its hands off the wheel when it comes to innovation?
I recently read a report (CMO Survey, February 2020) that stated only 22% of CMOs and marketing executives believed that it was the responsibility for the marketing team to lead innovation in their organisation. As a former marketer of more than 15 years that has worked for leading multinational consumer goods companies, this threw me. While a fair proportion of my career had been in leading brand, research, communications and people, I’d have to say where I was able to routinely make the biggest commercial impact was via innovation. After all, ‘innovation’ is one of the four Ps (‘product’), isn’t it? In fact, innovation covers all of the Ps within the marketing mix if you think about it. Wait. How many Ps are there, now?
Technically, ‘innovation’ encompasses any value-creating, change-based activities. It may relate to products, services, experiences, technologies or entire business models, however, it’s not uncommon for people to narrow its definition to NPD (new product development). For the benefit of our businesses, we shouldn’t constrain the breadth and impact of innovation to things like tweaking packaging designs, cost-cutting initiatives, limited editions or rotational product lines. We need to be building things that solve real business problems and consumer challenges in new ways that create significant value for each party. In my opinion, marketing, including its sub-divisions, is an ideal place to make the discoveries about consumer or user tensions that lead to incredible, sometimes transformative, innovations and new ventures.
The problem is, we’re not seeing it. Not consistently, anyway. Many modern marketers have become conditioned to over-emphasise brand communications, drop tools to prioritise the (often unfair) demands from retailers and other customers, limit business complexity and constrain innovative creativity to what the organisation’s existing assets and capabilities can produce without discomfort. Under these circumstances, it’s incredibly difficult to make profound consumer discoveries or develop break-through solutions, and as a result, we see waves of predictable NPD activities that fail to delight consumers, customers or the business. In fact, less than 5% of corporate innovation returns the investment applied to it (Deloitte, 2014).
Of course, the situation looks different across industries and structures. However, according to the vast majority of CMOs and CEOs that we speak to in our work at Radiocarbon, we’re told that marketing has become more focused on data and communications (what we measure and what we say) of the past 5-7 years while more distant from genuine consumer empathy and innovation (what we understand and what we do about it). It’s possible that this picture will be slow to change without significant disruption or a C-suite intervention. Speaking to the latter, what may be required is a top-down mandate that charges our marketers, and those closest to our consumers and users, with helping to build the future of the business.
Despite everything I’ve written above, marketing doesn’t own innovation. Nor does any single function- the resistance to significant change is too great for any department to overcome by itself. Innovation needs to be understood as the lifeblood of a prosperous future and it needs to be embraced by the entire organisation to succeed. Having a transformative agenda owned by the CEO will make a huge difference in creating this cohesion. Strong futures will be built upon the allocation of a suitable proportion of organisational resources to helping it to learn and adapt efficiently to meet the needs of those that they serve, better.
The people that make it happen can come from anywhere. My point is that marketers – as voices of consumers – should have a strong role to play. They may very well be the best placed to be in the driver’s seat.