Why CSR is Not a Marketing Strategy


Over the years, this blog has applauded the efforts of a number of brands endeavoring to “do well by doing good” (i.e. Petco, J&J, Richline, Patron, Omni Hotels and more).  Framing such efforts of corporate social responsibility (CSR) in this way, I may have implied that CSR is actually a strategy in itself.  Fortunately for you in our interview below, Karen Quintos, CMO of Dell, clarifies why CSR is not a strategy but rather a “mindset” that can and should permeate an entire organization from product development to customer service, recruiting to marketing.  In one of my favorite quotes of the year, Karen notes, “Ultimately CSR is not a marketing strategy–it’s a tool for building a better business.”

This distinction is important and instructive. “Building a better business” is the ultimate goal of any enterprise which involves finding a sustainable competitive advantage that will create a return on capital invested.  So when Dell found a way to cut materials out of its packaging, they not uncovered $50 million in cost savings but also they avoided creating 30 million pounds of waste which was better for the environment and their customers (who didn’t have to deal with the extra waste.)  This is just one of the meaty examples that Karen shares in our conversation about CSR, one that will make it very easy for you to understand why she was recognized by The CMO Club as a Social Responsibility Award winner.

Drew: Congratulations on winning the Social Responsibility Award. How do you define Corporate Social Responsibility?

At Dell, we look at CSR a bit differently. It’s not a strategy; it’s a mindset that’s part of our culture. It’s about using our processes and products to create value for our customers and communities in a world of growing demand and finite resources – and leaving the world better for the next generation.

Drew: Can you provide a short recap of your CSR initiatives in 2015?

We continue to make terrific progress against our Legacy of Good Plan, which outlines 21 ambitious CSR goals we intend to achieve by 2020. These include environmental and giving goals, but also commitments to workplace diversity and volunteerism. We’re progressing on all fronts, but one in particular that I’d like to highlight is our industry-leading circular economy practices. We are designing out waste and making better use of available and sustainable resources through our closed-loop supply chain. To date, we’ve recycled more than 4.2 million pounds of e-waste plastics and put them back into new Dell products. We recently launched a recycled carbon fiber program that replaces virgin materials in Alienware and Latitude products. It will keep about one million pounds of materials out of landfills this year alone. These programs provide greater efficiency to Dell, but also to our customers who are increasingly looking for help to achieve their own CSR goals.

Drew: How do you measure the success of these programs?

We know we’re successful when our programs deliver both business value and societal benefit. A perfect example is our product packaging. Since 2009, we’ve saved more than $50 million dollars and avoided 30 million pounds of packaging by using sustainable materials and deliberately reducing the amount of packaging used to ship our products. That’s a significant savings. It’s also a great innovation story with real benefit to our planet and our customers, many of whom share our commitment to a cleaner planet.

Drew: Building a business case for CSR initiatives can be tricky. What were the keys to gaining management support? 

Educating and shifting mindsets within management is critical. There’s a perception that these programs involve compromising on cost or quality, but we’re actually seeing the opposite. CSR initiatives are often a source of hidden efficiencies and innovation. But the best approach, in my opinion, is deeply embedding CSR into the corporate culture. At Dell, it is part of how we design, deliver, sell and support our solutions globally.

Drew: There are an unlimited number of options when it comes to CSR. How did you narrow the list down?

Everything we do from a CSR perspective ties back to our core belief that the purpose of technology is to enable people to solve problems, make discoveries, and advance society on a global scale. That starts with universal access to IT and training, which is why our global strategic giving programs focus on bringing Dell technology and 21st Century skills to underserved youth around the world. It also means partnering with others to tackle huge, global challenges. We’re working closely with doctors and researchers to bring the power of high-performance computing to bear in the diagnosis and treatment of pediatric cancer patients – and we’ve seen some amazing results. When your CSR strategy is grounded in your company purpose, it becomes a lot more clear what and how you should be engaging with your people, communities and planet.

Drew: When it comes to sharing your company’s CSR initiatives is there a fine line between letting the world know about it and overplaying the contribution?  Where do you sit on this spectrum from letting the good action speak for itself and broadcasting it from the treetops?

There is  absolutely a balance.  We believe it’s important for our customers to know the good we do and, quite frankly, they are asking more and more. As a matter of fact, CSR is a factor in about 60 percent of the RFPs we complete each year. It’s also becoming table stakes for hiring and retaining millennials. We announced a partnership with actor and entrepreneur, Adrian Grenier, this year as our first Social Good Advocate. He is a strong, outside voice for Dell and is helping amplify and guide our responsible business approach. But ultimately CSR is not a marketing strategy. It’s a tool for building a better business.

Drew: What is the single biggest challenge that you’d like to overcome in 2016?

Since finding a couple more hours in the day isn’t an option, I don’t think I could name just one. I’d like to see the world’s biggest problems solved – hunger, poverty, cancer, climate change, energy, etc. I’d also like to see more global support for the world’s entrepreneurs who, as the No. 1 source of innovation and jobs, are key to our future. The good news and a big reason why I love working in this industry is that technology is helping entrepreneurs and bright minds all over the world breakthrough and make important discoveries in these areas every day. Who knows – 2016 could be the year some of these big challenges are solved.

CMO Insights: Building Loyalty Through Sampling

This is part 2 of my interview with Daniel Lubetzky, founder and CEO of KIND Snacks and author of Do the KIND Thing, a book I’d recommend to anyone, especially those intrigued by the notion of doing well in business while doing good. In this post, we dive deeply into the evolution of KIND’s loyalty building activities.  Several items of importance will become clear as you read this:

  • It’s easy to give product away–it’s far harder to create a memorable experience that drives loyalty;
  • Loyalty programs are tricky to get right even if you have a great product;
  • It’s hard to get consumers to go from an offline sampling experience to an online program;
  • There is such a thing as being too clever when it comes to designing loyalty programs;
  • Never underestimate the power of kindness!

Drew: In your book, you mention that sampling was an important way of building loyalty. How did you approach this?

So in New York City, for example, you have men or women handing out stuff for people to try. And it’s such an unemotional experience. It just feels like a commodity. I just feel that there’s a way to elevate that experience. We’re giving people something for free, an expensive, premium product that we worked so hard to craft. We don’t want to just hand it out and push it into people’s face. The opportunity to give a KIND bar as a kind act and say you’ve been “kinded” helps people hopefully appreciate it more.

Drew: So how do you sample KIND?

We do a program today, where we give people two KIND bars and say, “one is for you to do a kind thing for your body and one is to do a kind thing for someone else.” It helps elevate the experience and it’s just a little bit warmer of an interaction. It’s just a warmer way to connect with people. But, it’s still authentic, also in that we’re authentically trying to inspire people to start chains of kindness.

Drew: You’ve tried a number of loyalty programs. Can you talk about the black card and why you don’t think it worked?

The original aspiration was that people got the mysterious black card that would not explain to them anything other than somebody would do a kind act to them and they would get this black card and then that person would disappear. And we hoped that people would be so curious that they would go online and find out that they’ve been KINDED and that now it’s their responsibility to pass that on. The truth is, people are so busy and so skeptical of strangers approaching them that when we just handed them the secret card a lot of people thought, “what is this?” They were just too busy and they just wouldn’t engage at a significant enough pace. It’s hard to get people to go from an offline encounter with a stranger to online so it didn’t work as well as I would have liked.

Drew: Then you moved on to another loyalty program which encouraged people to do everyday acts of kindness but that one didn’t work out quite as planned either, right?

Yes, it was a bit disappointing. Instead of elevating the standard for what kindness should be, they were lowering it, and in that sense I felt a little bit guilty that I was contributing to making what should be a magical moment a little dirty. A lot of young people would enter the acts like, “I opened the door for my sister or I closed the door for my sister!” These obviously didn’t capture the essence of what we wanted to do. But many others supported the causes that they cared about, and the causes were doing something important. One of them was helping reunite war veterans with their families so we sent them care packages. The good news was everybody was doing something good for others. None of them were doing something horrible.

Drew: So why do you think this one didn’t quite work as planned?

It’s our fault that the system didn’t work. And in retrospect we gave up on it too quickly because at that point we didn’t use Facebook for authentication. So anybody could just say whatever they wanted. There are a lot of lessons from that experience and we’re still learning. It’s always a give and take. It’s quality versus quantity. The higher the standard, the higher the quality of the kind act, the more meaningful it will be. But you’re going to have to sacrifice quantity. So you have to find the right ratios.

Drew: How are the #KindAwesome cards working?

At the quality level, I think they’re awesome. I think at least when I give them out. I always give them in moments where they’re deserved. I don’t just give them out to give them out. I usually give one a day, I sometimes give a few a day. But if a day goes by where nobody deserves one, then I don’t feel compelled to just give one out. I wait for a person that really has done a kind act. And I give it to them and it’s authentic and people feel good. It’s very nice. But currently, they are limited by the fact that only a small community (the KIND team and some of our partners) gives them out. So there’s you know, five hundred of us. We are in the process of researching and designing a platform that’s going to help us scale that. And hopefully maintain the authenticity.

Drew: Have there been any surprises with the #KINDawesome program?

I did not expect that people were going to cry when I gave them #KINDawesome cards. I actually can think of three moments where people shed tears from feeling really touched that I recognized their act of kindness. And they couldn’t care less about getting a couple KIND bars and a #KINDawesome card to pass on to others. What drives their fulfillment is that appreciation – that someone else had recognized and celebrated their kindness. Particularly when they were having a hard time and a long day, and they were not feeling appreciated.

Drew: Talk a bit about the power of kindness.

You know, all of us are complex human beings. People sometimes have a harder life than we acknowledge and realize. And they’re having really tough moments. And somebody, a fellow human being just stretches out their hand and it really can mean a lot. There are some people that are fragile and feeling completely isolated and then a stranger just shows some warmth and kindness to them. And it completely transforms their lives. And they have a reason to believe that life is worth living. Just imagine how powerful that is. I would not pretend to say that from getting a #KINDawesome card that has happened, I’m just saying the power of kindness really can help do so much good.

Drew: So, a little kindness can go a long way.


Doing the KIND Thing with Daniel Lubetzky, part 1

Once a decade or so, I fall in love with a book by a business founder.  In the 90’s it was Herb Kelleher’s Nuts, the inspiring story from the founder of Southwest Airlines.  In the aughts it was S. Truett Cathy’s Eat More Chikin Inspire More People, a remarkable rundown on the rise of Chick-fil-a.  [Though I don’t share Cathy’s politics, I couldn’t help but respect his accomplishments.]  So here we are in the twenty-tens and boom, the recently released Do the Kind Thing by Daniel Lubetzky rocks my world! Admittedly, I’m a sucker for stories about brands that do well by doing good BUT take my word for it, this is a book for marketers big and small, entrepreneurs and corporate chiefs.

LubetzkyI read the book after seeing Lubetzky speak at the recent PSFK conference and more importantly to this post, after he agreed to be interviewed.  Our subsequent conversation covered the gamut, from book writing to purpose branding, sampling programs to child rearing.  And every minute was delightfully instructive.  One of the things that I really appreciated about the book was how honest he was about his mistakes along the way and he was equally frank in our conversation.  The passages below focus on why he wrote the book and his conception of purpose-driven branding.

Purpose-driven branding, for the uninitiated, is the notion that companies and brands need a reason for being such that everyone at the organization can answer the question “why are we here?” Gordon Methune, former CEO of Continental, credits the turnaround at that airline in the late ’90’s by getting everyone in the organization behind a clearly defined purpose, “on time with bags.”  As you will see in our discussion below, KIND’s Lubetzky set the bar for his organization quite a bit higher, aiming to turn kindness into a movement, one KIND bar and one KIND act at a time.

Drew: You’re a busy guy to say the least. What really compelled you to write the book?

A few things… One is that I have been the recipient of a ton of guidance and advice from people over the years. And I felt I needed to do the same things for others. The book also shares very honestly a lot of my mistakes hopefully this will help others avoid making the same ones.

The second one was I very sincerely aspire for KIND to do something very different from what other companies have done–to really push the frontiers, to transform the company into a movement and a state of mind, a community that people connect to. And by no means do I think we are there. But to get closer to this aspiration, we have to share our vision with others and stake a claim to what we are and what we’re living to accomplish, to get a community to help us build the movement and take ownership over it. Writing a book was the first step in sharing more of our philosophy, a little bit of where we’re coming from and what we’re aiming to do so that people can hopefully join us in pursuing our vision.

Drew: Any other reasons?

I also wanted to write a book because frankly I’m very aware of my own mortality because my father was a holocaust survivor and I just think about those issues perhaps more often than others. And I have 4 children and I just wanted to document my values and my way of life for them. And I also wanted to share these ideas with the KIND team, which is especially important as we grow, so there was a lot of motivation.

Drew: Speaking as an entrepreneur that has made more than his fair share of mistakes, I love how honest you are about yours.

It shows a certain sincerity and ability to look at yourself with a degree of circumspection. It also makes your success that much more impressive.

Drew: You spend a fair of time in the book talking about “purpose.” Do you think every company needs a purpose, and does that purpose necessarily need to be tied to social good?

I think every company that is trying to succeed has to have a purpose because it’s another way of saying that it has some sort of reason to succeed, it has something to offer consumers or society that serves a greater purpose. As far as a social purpose, I don’t think every company has to have it. I think companies that have it feel fulfilled and motivated. But it can be dangerous to inauthentically incorporate a social purpose. It’s not the same if the people that are driving the business don’t wake up in the morning and feel the purpose is important to them. Consumers will be able to tell if it’s not authentic and it will probably backfire.

Drew: Does having a purpose help you as the leader?

I personally derive more meaning from having more than a financial purpose and doing our small part to make this world a little bit better. And I do think that there is a trend for society to appreciate the power of businesses incorporating social purpose into their mission when it’s sincere. But I don’t think it’s a requirement and I think it’s very dangerous to force it into something where it doesn’t fit.

Drew: How else does having a purpose help?

I also think the exercise of talking to people about their core principles and asking what’s important to them can help them pursue a bigger vision. But it has to really, really connect with their efforts, with their spirit, with their DNA, with who they are, with what they stand for and frankly with the brand heritage.

Drew: What about brands that don’t have a social purpose?

I think there are incredible brands like Snickers whose purpose might just be to satisfy a hungry craving. And they don’t need to pretend to be something that they’re not they play a role as a fun and delicious experience and a satisfying candy bar. I think there are many other great brands that do what they promise to do and are very successful without a social purpose.

Stay tuned for more of this interview in subsequent posts.

CMO Insights: Corporate Social Responsibility

Admittedly, I’m a bit of a romantic when it comes to the notion of Corporate Social Responsibility (CSR).  I really truly want to believe that companies that are driven by a purpose that includes the betterment of the world will outperform those that simply want to make a profit.  As the theory goes, a clear mission translates to a more aligned and motivated workforce, a superior product/service offering that delivers against the “triple bottom line.”  

This is not just wishful thinking on my part. Robert Safian, Editor of FastCompany tackled this subject in his fascinating look at some mission driven companies that are indeed doing well by doing good.  So it was with great interest that I interviewed Alison Lewis SVP and CMO of Johnson & Johnson on the subject of CSR.  J&J has had its ups and downs in the last few years so I was quite curious to get an insider’s view on how a huge business can approach CSR without coming across as self-serving or insincere.  Read on and it will be clear why Lewis is a Social Responsibility award winner at The CMO Club’s CMO Awards.

Drew: “Doing well by doing good” sounds like a great idea but it is much harder to put into practice given the complexity of running a public company with quarterly earnings reports and ever-hungry competitors. How have you approached Corporate Social Responsibility? Do you have a distinct set of metrics for CSR (vs. product sales) that help rationalize these investments?

As a healthcare company, caring for the health of the planet and the communities in which we operate are natural extensions of who we are. Therefore, Johnson & Johnson has been setting goals to improve the sustainability of our business for decades. Currently, our Healthy Future 2015 goals are our broadest set of goals yet. They include goals related, but not limited, to:

  • Safeguarding our planet by reducing waste disposal, water consumption, and reduced fleet and facility carbon emissions
  • Commitments to responsibly source ingredients throughout our consumer supply chain
  • Including product sustainability information on all our beauty and baby care brand websites
  • Educating the public on recycling bathroom products
  • Engaging all employees throughout the company on how to live more health-conscious lives

We measure these goals in our annual progress report that is available at: http://www.jnj.com/caring/citizenship-sustainability/performance/healthy-future-2015.

Drew: CSR activities are often handled outside of the marketing team’s purview yet the hope is that these activities will provide a positive halo for a company’s brands.  What is your role related to CSR and are there some initiatives that you think have been particularly effective?
Sustainability is an end-to-end value chain effort. When we make progress, our brand marketing teams can help translate that progress in a meaningful way to our consumers. Marketing can play a key role to engage consumers and help brands make a difference – Our NEUTROGENA® Naturals brand is an example of how a brand can build progress on sustainability into its consumer communications.

For the third year in a row, NEUTROGENA® Naturals launched its Every Drop Counts campaign, where the brand educates consumers on the importance of water conservation. This year, throughout the month of October, NEUTROGENA® Naturals will contribute 10% of the purchase price of the NEUTROGENA® Naturals Purifying Cream Cleanser to the Nature Conservatory to support its water conservation efforts*. In 2013 the NEUTROGENA® Naturals brand exceeded their goal of saving one million gallons of water by more than 300%, over 4.2 million gallons of water were saved based on consumer pledges – – that’s the equivalent of a swimming pool the size of nearly four football fields!
*up to $50,0000

Drew: J&J received more than its fair share of negative publicity before your arrival.  How did you make sure that your CSR initiatives came across as a sincere versus self-promotional? What advice would you give to fellow CMO’s who are just getting started on CSR programs?
The key is consistency. Regardless of the business climate, our values and commitment to social responsibility have remained steadfast. One of Johnson & Johnson’s early leaders, General Robert Wood Johnson, spoke about social and environmental responsibility long before the term “corporate social responsibility” or “sustainability” became well-known in corporate circles. My advice to other CMOs is to embed your CSR commitments into your core values (what you care about) and your business strategy (how you focus) and your brands will have a strong foundation to make a meaningful difference.

Drew: Handling organizational change can be tricky particularly if it involves reorganizing / replacing long-time staffers.  What advice do you have for fellow CMOs when it comes to handling reorgs?
Just as marketing must continue to evolve to keep pace with our consumers’ needs and expectations, so must marketing organizations. When it comes to change, the important thing is to always put the consumer at the center. At Johnson & Johnson, we have a long history of being guided by Our Credo values, the first tenant of which is our responsibility to the people we serve – everyone who uses our products. Change for the sake of change doesn’t work but changing to meet consumer needs is always right!

Drew: How have you used social media to advance your brand’s overall marketing efforts? Are there any social media channels that are working better for your brand than others? If so, please elaborate.
Social media is about connecting with your target audience, therefore, every Consumer brand at Johnson & Johnson has a different “formula” for how to successfully engage and connect on social channels.

One example of how a Johnson & Johnson brand has utilized social to evolve our marketing efforts is on our teen focused CLEAN & CLEAR® Brand – – here, we recognized that social media channels at the core of a teens world. Knowing this, CLEAN & CLEAR® was an ideal brand to build the interconnected ecosystem of owned, earned, shared and paid content that would enable the CLEAN & CLEAR® See The Real Me™ campaign. By launching and activating several social media channels (Facebook, Twitter and Instagram), we are able to listen to what teens want, engage in direct conversations with them and entertain, educate and inspire them with authentic content.  By engaging with teens in the social space the brand is able to forge an emotional connection and become part of their everyday lives. We have coffee with them in the morning, provide advice to them on the go, and help them relax before bed while celebrating the confidence that they portray on a daily basis by just being themselves.

Drew: Storytelling is a big buzzword right now.  Is your brand a good storyteller and if so, can you provide an example of how you are telling that story for one of your brands?
JOHNSON’S® is one recent example of how we’ve enhanced the story of one of our most beloved brands. Increasingly, we heard from our consumers that they had concerns about certain ingredients in our baby products. All the ingredients used in our baby care products have always been safe, and meet or exceed government standards for safety. But trust is at the heart of our baby equity, and we wanted to communicate to our consumers that we listened to their concerns and we know their trust is something that we must continue to earn. We knew that our actions would speak louder than our words, and we made the decision to reformulate our baby products for trust. As our reformulated products hit shelves, we launched a new campaign, “Your Promise is Our Promise” to illustrate our heartfelt commitment to the moms, dads and families that use our products.

To tell the story behind our promise, we launched our biggest social media campaign with more than 40 informative and entertaining videos that speak to our JOHNSON’S® brand promises, baby care education and the parenting journey. We’ve seen millions of consumers interact with our video content, comment on our social channels and learn more about what our brand stands for due to our ability to connect through storytelling.

Branding, Content Marketing & Reverse Osmosis

snehal desaiMarketing never gets boring to me because each company, brand and sub-brand has its own unique challenges.  This is certainly the case for Snehal Desai, Global Business Director of Dow Water & Process Solutions, a division of Dow Chemical.  Snehal and I had a long conversation about the subtleties of marketing a sub-brand with multiple product lines aimed at multiple verticals with multiple constituents all while remaining true to the parent brand’s vision.  And if I haven’t built up the challenge enough, keep in mind that these folks are selling highly-technical things like reverse osmosis systems that separate salt from water.

How Snehal and Dow Water tackled this challenge is well-worth pouring over (sorry, couldn’t resist the pun) if for no other reason that it is a cogent reminder that if you focus on your customer you’ll rarely go astray.  As you will see, Dow Water puts a lot of energy into creating educational content (seminars, white papers, studies, models, etc.) that has helped drive the perception that they are experts, not parts manufacturers.

Drew: Can you talk a little bit about your brand, Dow Water and Process Solutions, relative to the corporate brand, The Dow Chemical Company, and how you distinguish between the two?
That’s a good question, because Dow as a company is very large. A lot of the time customers are thinking about the product that’s doing a certain function for them. As such, we are continually looking at the balance between leveraging the large company presence, investment on Dow’s capability and history. But we don’t lose sight of the fact that we have customers that are specifically buying, and have been buying for years, what’s come to be known as the Dow Water & Process Solutions suite of products. So we think first with respect to our customers and the things that they want the most from us.

Drew: I want to clarify a bit on Dow Water and Process Solutions. Would you describe it as more of an ingredient brand?
I would definitely say it’s more of an ingredient brand. For example, there are a variety of ways that one can separate and purify water. We make the technology that does the actual separation and purification. For example, we make the membranes that separate the salts from the water. So we make the guts, the advanced separation steps, and are in that way almost always inside a system.

And because we’ve been operating in this environment for decades and the very nature of b-to-b marketing, we actually do have a relatively high level of awareness among our users. But that’s also one of our brand challenges, to be able to remind people of the work we do.           

Drew: Were any of the sub-brands that you recently purchased well known enough to considered the generic brand in their categories and if so, did you keep those names?
We purchased Rohm & Haas in 2009, which was a very well known chemicals company that had a very strong position in ion exchange technology. With that company came a set of customers that knew exactly what they wanted. So depending on the sub-application, certain trade names did resonate more than others.

Once you start to really get into specifications, the customers don’t want to change them. The last thing you want to do is shoot yourself in the foot because you felt like it would make it more economical on a naming and literature basis, and find out you lost a million-dollar order because they decided they don’t like the new product because it was not what they expected.

Drew: So there’s the Dow brand and then there’s Dow Water & Process Solutions.  How are the guidelines defined? Is there a Dow brand oversight team that you as the marketer of Dow Water & Process need to go through?
There definitely is. We have a corporate public affairs group, which is the group that’s responsible for making sure that the brand standards are followed. What we do is work with that team to develop business brand standards, which might stretch the corporate brand one way or another depending on the audience a specific business is trying to reach. This way we are able to target our audience with the appropriate brand image while still staying true to the greater Dow brand.

The corporate Dow brand work supports this notion we’re trying to impart to our customers, which is to think of our job as providing solutions. We cover so many areas – if you think about a category like health and nutrition, the medical space, or energy storage, we have many, many different plays that are already going on in those spaces. People don’t always put it all together. So there’s this idea that we would be using the website and a branding approach to these market segments. In many ways we’re writing white papers to help talk about the broader issues that would interest consumers, like provisions of clean drinking water, cleaning up waste water, and the whole idea of sustainability.

Drew: Interesting. So “good” from a sustainability standpoint is that message to serve around a good, corporate citizen, and you guys help fill that role?
Yes, and you can always look at it as both a blessing and a curse. Because with that role also comes the need to balance between talking about almost philanthropic good then what we really do, which is helping companies, helping municipalities, and really driving a sufficient, low-cost, reliable provision of separation and purification services. If you look at some recent product launches such as ECO FILMTEC™ reverse osmosis elements or SEAMAXX™ reverse osmosis elements, sustainability is intrinsic to the value proposition and is in fact, what our customers expect. They are looking for improvements such as lower energy requirements, less chemical requirements and resistance to fouling. All of these benefits, while operational, are also sustainable.

Drew: How much and how important is consultative selling? Can you give me an example of how you “campaigned” it?
It’s the way we do business. It’s the way that our sales team and our technical sellers do things in the marketplace. We do seminars. We actually have projection programs that allow us to model some systems for people to help them make some choices on what options they might have, the tradeoffs, etc. We did some brand study work around three or four years ago. They did some good external studies and surveys. One of the things that people said they bought was expertise. They were buying the knowledge of the people that they were working with.

So that’s always something that our customers always talk about. They rely on us to give them good answers. To help them solve problems that aren’t always directly related to the product that we sell. In fact, this is a core value proposition and our biggest differentiator against our competition. We have the best people in the business and the most expertise. Our customers rely on that.

Drew: With the person who’s buying your product and essentially reselling it to someone else, is there a combined branding activity?
It’s not exactly like that. It’s more like this: if you consider an equipment seller, and anybody can buy pumps, valves, and fittings on the market, the question then becomes one of “how does he differentiate himself?” One of the ways he can do so is to identify that the components he’s putting in the customer’s system is something that the industry knows and everybody trusts and is the best on the market. So that when he puts his bid in, and he actually calls out, “I’m using Dow XYZ,” that’s his way of saying, “Look, my bid with this technology is really the winning solution.”

But some companies are more collaborative. Meaning they’ll ask us for help. They’ll ask us if they can come in and jointly sell or help answer questions for the customer given the confidence that technology will work. And we do that. But that’s the industrial sector. We also sell into the residential market which is very different. That’s more about brand owners that are putting white good appliances into your house, so in that case, you’re talking about a consumer story. Building the confidence that these products are good and healthy for you, and they’re going to deliver what they say they’re going to deliver.

Drew:  If you were to define the Dow brand, and then you were to define the Dow Water & Process Solutions brand, would there be differences?
Probably not. I don’t think they’re that different. Where the differences occur is when you get really right down to the specifics of the solutions and markets. People are telling you about sort of the things you did for them. Not the company, but the things your people and technology do. I’m not saying that every business in Dow is delivering the same set of attributes, but I think we pivot off of a lot of the same thing. It’s a strong technology base. It’s the ethic around reliability and consistency, a global reach. So I think we have a lot of similarities.

Drew: That gets back to enabling the channel, the consultative selling, all the content marketing that everybody wants to talk about now. It’s all in this category of doing versus saying. Do you feel like you have a luxury that other brands don’t have, in that you can build Dow Water & Process Solutions focused on the “doing” because the parent company is taking  care of the “saying” component?
You’re absolutely right. And yet by doing, as you say, that becomes the basis of the stories of what the company wants to say. As long as we continue doing well and enabling changes and differences in the market, then people are looking for ways to tell those stories in creative and inspiring ways. We are definitely lucky.

Final note: thanks to my friends at The CMO Club for the introduction to Snehal.

CMO to CEO in One Knight

Sir TerryWith the world abuzz about the newborn English prince George, it seems appropriate that I finally feature my interview with a real-life knight of realm, Sir Terry Leahy. Sir Terry was the CEO of Tesco, a company he helped build into a global retailing powerhouse. I caught up with him after his keynote address at the IBM Smarter Commerce Summit earlier this year where we discussed his new book, Management in 10 Words.  Although this edited interview is longer than most of the ones I post, I expect you will find it well worth your time, since Sir Terry is one of a handful of CMOs who not just rose to the CEO position but also became one of the most effective in recent years.

Drew Neisser: Simple is one of my favorite words in your book. But Simple is hard, especially for big businesses. Why is that?
Sir Terry Leahy: Yes, simple isn’t easy. But, it still is the right thing to do. I think it’s a mindset. You have to accept that as organizations grow, they will become more complex. So, you got to counter that by deliberately navigating in search of simplicity. As organizations evolve, they do so around a series of decisions. And it’s when you make those decisions, you have the opportunity to choose a more simple route, as oppose to a more complex route. And in a way we have to counter the way we all educated.

In education sometimes you’re rewarded for length. I was reminded of the old Mark Twain story when his editor asked him for two pages in two days. And he came back and said, no can do. I can do ten pages in two days. But it’ll take me two weeks to do two pages! And what’s that getting at is you have to think about it. You have to think about how you can actually simplify the way you deliver a product or a service to a consumer.

Drew Neisser: With all the big data that’s out there, does this make it harder to get to simple or does it make it easier?
Sir Terry Leahy: Well it potentially makes it harder. There’s a real danger that an organization can be flooded by data. And information can get in the way of actually accessing the things that really matter for the consumer and what will really drive your organization forward, if you make decision on those things. Our data is so complex now. So, powerful. It’s even a danger that it can become detached from most ordinary people. And that can be very harmful for an organization. You want data to be more accessible and to be placed right at the heart of the organization. Right where the decision are made.

Drew Neisser: How do you get to where data becomes simple?
Sir Terry Leahy: I think it became simple once we were able to know things about customers. That was the big breakthrough for us. We had product data with the [advent of the] bar code. Which transformed our retail industry. But, we didn’t know anything about the people who bought the products.

Once we launched Club Card that allowed us to gain information about those individual customers. And their shopping habits. What they bought when they shopped. And that really illuminated the world for me because then we knew more about how customers shopped and what they needed. And what they’re interested in. We could tailor [messages.] We could target our products our services to meet those specific needs.

Drew Neisser: One of the words that you used was Courage, which is another great word. I would use the word chutzpah but that’s because I live in New York. And a lot of companies don’t have the courage to make big bets. In fact, they sort of go for incrementalism. Talk to me about the importance of courage and big bets, and the risks of such an approach.
Sir Terry Leahy: Courage is an unusual word in the context of business. But, I think it’s at the heart of business. And in fact, I think entrepreneurs would understand that. They take the biggest bet of all with their livelihood, when they start a business. But, in an organization it still applies. Many people are fearful of upsetting their boss and affecting their promotion prospects.

Actually, you’ve got to be prepared to risk everything. Even your career in order to do what you think is right in a situation in the job that you hold. One of the big bets that I made was the launch of Club Card, which gave this information around customers. In order to do it, we had to incentivise customers. That was going to cost us at the time a quarter of our entire profits. If this had gone wrong, and many predicted it would go wrong, I was finished.

Drew Neisser: So, one of the things that really distinguishes you particularly in the world of big data and CTOs is that as a marketer, you became CEO. Why do you think you were able to beat the data guy to the CEO spot, and what could marketers who aspire to be CEOs, learn from that experience?
Sir Terry Leahy: Yeah, it is unusual. And I think we need more CEOs who come from marketing or come from technology. It happens obviously in the technology industry, but outside that industry, it’s pretty rare. And, I think that’s a great shame because those are the two most valuable commodities for business systems to work with–customers and data knowledge. I was able to use Club Card and some other innovations to be the voice of the customer in the business. So, I was able to give leadership for the company from the marketing position. And that, therefore, was a small step into the CEO office.

And I think other CMOs can do that. I think that they can step forward and lead the business from the marketing position. Particularly, if they harness the customer. And the customer is the biggest power base within an organization.  And if you use it in the right way, it’s hard for [a colleague from] Finance or Operations to challenge the voice of the customer. If you have the customer on your side, you’re the most powerful guy (or woman) in the organization.

Drew Neisser: Interesting. So, one of the words that’s not on your ten words, is the word intuition. And in this world of big data does intuition still have a role?
Sir Terry Leahy: I think it does. You read the psychology books like I do, and they look at how the brain works and what would probably happen is that we’ll all be better at absorbing data about the things that we work on and work in. And then we’ll have an intuitive response that seems like a gut instinct.

But, actually it’s drawing on all of that data. All of that information that you’ve been putting in there over the last weeks and months and years. And largely, that’s probably the right way for it to come. A combination of the two sides of our brain, if you like. And that’s how most people will work.

Drew Neisser: Let’s get back to the CMO for a moment. How does that CMO who’s not a data person, make sure that they are looking at the data or getting the data they need to really inform their strategies?
Sir Terry Leahy: I think the days of the CMO not being data person are passed. I don’t think you [the CMO] have to be a math genius. The technology right now is making [data] so much more accessible. It’s about the CMO who’s curious about the world around them and how they use data to inform them about that world. And that’s what CMO’s are naturally are. Their naturally interested in people. Interested in how the world works. And they just need unlock data to inform their decisions.

Drew Neisser: One of the words in your book is “Values.” Let’s talk about that. Every company that I know has values. They put them on their website. They put them on a wall in the kitchen. But, they’re not realized. They’re not activated. They’re just platitudes. How did you make sure that the values that you established for Tesco became a real part of the organization?
Sir Terry Leahy: I think you have to look at the organization. And you’ll find in the history of the organization or in the narrative of the business the core values. And if you can draw those out and articulate them and build on them, I think that’s a much more solid foundation. I think after that it’s — you obviously have to live those values. People will listen to what you say, but they’ll watch what you do. Integrity comes from a consistency between the words and the deeds.

And you’ve got to live it every day. It’s incredibly powerful in business as in any institution or organization. The foundation are a code of values that says this is what we’re here to do. And in any situation, this is how we’ll behave. And people can identify with them. It’s so much easier for people to sign up for that.

Drew Neisser:  One of the words you have in the book is, “Compete.” When some companies see what their competition is doing, they try to replicate it. How do you compete and look at your competition, but make sure that you remain true to yourself?
Sir Terry Leahy: What’s interesting in the first ten years of my career, essentially I copied the competition because our competitors in my industry were outstanding firms. The best in the country. Arguably the best in the world at what they did. So, I didn’t have to look far for ideas. I just copied them.

But, what I found was as we got closer and closer to this benchmark, we could never overtake them because, you know, if you just like the original people will always choose the original. And it was only, when I stop copying the competition and started following our own customers and letting they be my lead, that we overtook them within a year.

It was an amazing thing that I learned. From that day forward I respected and learned everything I could from the competition. But, I never followed competition. All the focus was on the customer. And then what you did was much more original. Much more authentic. And customers spotted that you were doing it first and doing it for them. You weren’t doing it because some other competitor did it first.

Drew Neisser:  To wrap up here, let’s talk about the future.  If you were training now for the CMO job ten, fifteen years on the horizon, what would you be focused on?  
Sir Terry Leahy:  Well, I think it’s a really exciting time now because back when the Club Card started, Tesco was one of the first in the world using data, as soon as computers were powerful [enough.]  Now, the opportunity to access data from social networks, from shopping data and from so many other things, from operations, it’s without limit.  And, yet, organizations don’t use that data.  They don’t bring it in and use it to inform the way products are developed, to drive the direction of the business.  So, I think that still is the opportunity.  How do we make business decisions on the basis of knowledge–knowledge of the world around us.