Do you know what I learned consulting for big orgs? I did project work for IBM, Merck & Co., Tiffany & Co., the United Nations, etc… dozens of major institutions.
I learned that while big orgs may have big annual revenues and headcounts, their attempts to leverage innovation, at least digital marketing innovation, are basically just one shit show after another. Why is that?
It’s a byproduct of a bigger problem: big corporations control so much of the world’s income that they can coast on their laurels. 75% of humankind’s GDP is owned by the global Fortune 5000.
This isn’t too say that large orgs are badly run – just the opposite. They are extremely well run.
Their collective obsession for the last 100 years has been organizational efficiency, ie. running well. This goes back to Max Weber’s Bureaucratic Theory, one of the foundational texts of any traditional MBA program.
Weber’s strictly top-down thinking has been steadily reformed over time, but the central focus remains: how to create more profitability through an efficient bureaucracy.
This strangles innovation and as a result, we’re stuck with short-sighted software, clunky user experiences, defective systems.
An Alternative Vision of the Future
If you’re like me, we’d like a world where entrepreneurs and their allies disrupt this global status quo – not with large amounts of capital (and not on the pursuit of it all costs), but on the strength of agile thinking.
What if tech entrepreneurs could learn to create ongoing marketing programs, not just campaigns, supported by ongoing ideation – the flow of good ideas.
Because this seems like the least risky approach for us.
Ultimately, marketing ideation is about reducing the risk of your marketing investments.
When marketing and advertising occupies a predictable slice of an enormous company’s annual budget, as with the monster companies of the Fortune 500 – but even with the next 5,000 enormous companies – it’s evaluated as a risk.
That’s not to say marketing investment isn’t risky; it’s to say the risk is assessed and deliberately undertaken.
This makes it possible to increase the total investment in marketing.
Look at these marketing budget numbers from the CMO Survey, a survey of large firms conducted annually by Deloitte.
For most of you, your counterparts on this list are “Service Consulting” and “Tech Software/Biotech” (though you could make a case for Education, too).
This means your big firm counterparts are investing between 12% of 15% of annual revenue in marketing.
How about you – if your revenue is at 1 million, do you feel comfortable investing 150k in marketing? If it’s 150k, do you feel comfortable investing 23k?
Probably. And why not?
Because it feels risky. And you know what – it is.
Big orgs hire CMO’s and their marketing departments not necessarily to come up with great ideas but to manage risk (in marketing/ad-spend).
Another interesting takeaway from the Deloitte CMO Survey – of the four marketing expense categories, B2B services firms (across all industries) spend more on, “Developing new marketing knowledge and capabilities” than anything else. [1]
In other words, the large firms surveyed in the CMO Survey are trying to learn how marketing works, so they can do it themselves.
That makes sense, because of how rapidly marketing has started to evolve over the past 3 to 5 years. Build your own in-house expertise.
And that’s not a bad strategy for you, as far as it goes.
The problem with that approach, though, is that you might be stuck forever playing catch up.
The big firms can outspend you on developing capacities by factors of many 1000s, if not millions.
I think the chink in their armor, though, is creative thinking.
They can study ideation, innovation, whatever you want to call it, till the cows come home. But the ghost of Max Weber is there to stamp it out – with efficiency.
You solve problems, though, with artistry, expertise, and creativity. Play to your strengths.
And have a great week ahead,
Rowan
FOOTNOTES
[1] The survey is biannual and published here, if you want to flip through it yourself https://cmosurvey.org/results/february-2019. About 70% of survey-participants have annual revenue over 25 million.