Why marketing leadership needs to be agile and customer-focused

Why do we use Zoom and not Slack or Skype? Post photos with Instagram and not Kodak? And why do we watch Netflix and not Blockbuster?

The answer lies with marketing leadership and which company had it at the critical time it was needed.

Marketing leadership and customer acumen is what is needed to propel companies forward in the post-pandemic and post-Brexit environment to compete successfully in the digitally complex business world. Now is the time to have a laser focus on the central role that marketing plays in futureproofing businesses – the big question is: does your company have the right marketing leadership and marketing skill set to do that?

The pandemic has turbocharged digital adoption with more than 10 years’ worth occurring in the last two years. At the same time COVID-19 has propelled unprecedented societal changes, many of which will be temporary, while others will become permanent as we navigate the new normal.

Meanwhile, the climate crisis has become a corporate boardroom issue, with companies having to move beyond greenwashing to accede to increasing public demands that they mitigate their impact on the planet.  

In this turbulent and uncertain environment, marketing is a critical department, which, at its foundation, has the responsibility to drive growth through deep perception of, not just the current customer, but the customer of the future as well.

To be a marketing leader means being able to predict the future – to be a futurist. They must have the leadership and skill set to orient, or reorient, companies to be where the customer will be. They need to devise and implement a plan to get the whole company to where it needs to be at the right time. This is very challenging and is often an undervalued and underdeveloped skill in many companies.

Instead, a lot of companies copy their competitors and opt for competitive parity, mirroring and sometimes improving, on their every move. This is known as ‘mimetic isomorphism’, which is the tendency of organisations to imitate each other, believing that what their competitors are doing is what they should do too. We know that competitive parity is a widespread and often very successful strategy as we live in a world of business similarity. Think of hotels, cars, banks, airlines, retailers, pharmaceuticals, manufacturers, wholesalers – all similar to each other with some stand out differences that often then become the industry norm.

But companies need to ask themselves: are you going where your customer is going or are your going where your competitor is heading and just following? Many companies follow with pride and in many ways it has served them well, allowing them to build highly profitable businesses.

But a warning comes with this strategy. It would be wise for company leaders to regularly take a moment and ask themselves: do you know who you are following? Or rather, do you know who John Antioco is?

Most people have not heard of him, but should have. Mr Antioco was the CEO of Blockbuster when the two co-founders of Netflix, Reed Hastings and Marc Randolph, came to his office and offered to sell Netflix to him for $50 million, but he said no. They even offered to run Blockbuster’s IT function but Mr Antioco – who at the time was renowned as a brilliant strategist – still turned them down. The rest is history and a sad tale for the 25,000 employees of Blockbuster which went bust 10 years later, but good news for the founders of Netflix which had a turnover of over $30 billion in 2021.

This is just one of many examples of digital disruptors toppling industry giants and there will be many more. Take Kodak, who, in the absence of marketing leadership and a real customer perspective, experienced what became known as a ‘Kodak moment’.  This is when a corporate giant, or any company, misses the customer insights and signs of the future to lose their market share to a more agile and customer-focused firm.

Instagram shared its first image in 2010 and its ad revenues were expected to hit $26 billion in 2021, according to emarketer, while the once great Kodak, which invented the digital camera in 1975, had a turnover of $1 billion in 2020.

Many companies may be having a Kodak moment right now and just don’t know it. What is critical for company bosses, is having the marketing agility to understand the customer and guide the organisation into the future, whether that is as a market leader or strategic follower.  

Kartik Kalaignanam, of the University of South Carolina, Kapil Tuli, of Singapore Management University, and Tarun Kushwaha, of George Mason University, have developed a framework for marketing agility focused on four questions:

1. What systems does your company have to make sense of where the market is going and how do you ensure that the whole company has this shared sense?
2. Do you constantly innovate and have multiple iterations, refining and relaunching as you test, learn, change, develop and grow?
3. Has your company developed the marketing skills to do both of these at speed?
4. Can you make sense and then decide whether to respond or not, and can you do that at speed? Are your marketing decisions proactive or reactive?

It is a marketing leader's job to answer these four questions to know if their company is agile and ready for the future, whether as a market leader looking to transform and lead the market, or as a follower waiting for their competitors to lead. Either way, a marketing leader must have a depth of perception and understanding about the customer.

Aligning agility with either a market leader or follower strategy demands that companies engage with their internal system for sensing and responding to the market and explore how to improve or innovate at speed.

Remember that at some stage simply copying and improving may not always be enough. In product tests, communication platform Slack was judged better than video-conferencing app Zoom. But it is Zoom that aligned more with customer needs in the pandemic and now has 200 million customers to Slack's 12 million.

This comes back to a company’s mindset or philosophy and whether it is internally focused on the product, externally focused on competitors or has their own external and internal ability to sense and respond to the future needs of the customer regardless of their strategy.

Companies can’t assume they are giving the customer what they want. They must regularly and rapidly question, challenge and change. This is the same for market leaders and followers, both must be where the customer is first.

Marketing leaders need an 'outside in' perspective - study the customer outside their organisation and only then go inside to the operation. Having the customer focus through marketing leadership to be ‘outside in’ and not ‘inside out’ is not easy and requires constant upskilling and development of marketing leadership acumen.

For any company that focuses on competitive parity, whether as a leader or a follower, they need to ask one question: do we know if we are following Blockbuster or Netflix, Kodak or Instagram, Zoom or Slack?

Mairead Brady is an Associate Professor of Marketing at Warwick Business School and is the Course Director for our Postgraduate Award in Enhancing Customer Centricity and the Customer Voice. She is co-author with Philip Kotler, Kevin Lane Keller, Malcolm Goodman, and Torben Hansen of Marketing Management.

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