The future of marketing is closely related to the future of innovation
The future of marketing and innovation is the reunification of what had been separated into the Parallelwelten of corporate silos.
Corporate silos have been the fruit of functional differentiation. And this again is the result of growth at scale, of mass production, mass consumption and mass communication. Your barber shop doesn't need a marketing department. In any small start-up with, let's say, five people, there are no silos, and functional differentiation is low, albeit it is present. You may have a developer or two, a designer, a product manager, and a marketing guy, who is probably more of a growth hacker. Some or even all of them are founders and thus their own bosses.
They work as a single team. No need for boundaries, hierarchies, org charts and all that jazz. They may do Scrum, but at this size, even a lightweight method like Scrum might be overkill. The whole purpose of the start-up is innovation and marketing. They are looking for a new product and the new market for it. Innovation and marketing aren't separated, because they are inseparable. No product without market, and vice versa.
With growth and scale, and over time, this simple, one-team organisation slowly turns into a siloed power structure, with the top positions – for a classic example, CEO, COO, CIO and CMO – abstracted from the business on the ground level, adding overhead to the company. Each of the c-suite guys commands a growing hierarchy of ever-increasingly functionally differentiated units, with specialists for everything you could possibly think of. Decision making gets slower and more complicated.
Marketing and innovation can't be controlled like costs
Marketing and innovation might then still be the purpose of the enterprise, but they become embedded into a complex environment. As it grows, the enterprise absorbs complexity from the outside into the inside. This is to mitigate risks. But the greatest risk is that marketing and innovation, which produce results, get treated like all the other corporate functions, which are costs. In any enterprise, big or small, costs must be closely controlled, since costs are what a company really can control in the first place.
Marketing and innovation can't be controlled in the same way. And thus they need to be treated differently. Treat them like costs, and both go down the drain. They are first and foremost about quality, not quantity. You may increase your marketing spendings or your R&D budget, just to get even worse results than before.
This happens in fact with the bulk of investments into digital transformation. IDC expects that in 2019 alone, $1.25 trillion will be spent on digital transformation worldwide. At the same time, only 6% of all transformation efforts result in completely revolutionary experiences that are unique in the industry. What happens to the other 94%?
Digital transformation needs to focus on innovation and marketing. Everything else, the costs of doing business, already have been transformed or, if not, easily can be transformed, given enough time and money. Digital innovation and digital marketing are the fiery nucleus of today's digital superpowers. Both also drive the engines of successful challengers. And yesterday's incumbents, the heroes of the Old Economy, are today's challengers in a world dominated by digital giants.
Marketing is best suited to drive the digital transformation
Digital transformation is not about technology, at least not in the first place. In a classic Jobsian sense, it needs to start with the experience and work back toward the technology – which is of course important, but not as a starting point. Marketing in general and the CMO in particular hold the keys to the kingdom, because marketing is greater than promotion and also includes the product, which is another name for innovation. And the CMO already has a seat at the c-suite table, or at least should have.
Marketing is best suited to drive the digital transformation, since it knows from past experience how to deal with the inherent insecurity of creativity. Remember the old Wanamaker quote?
Half the money I spend on advertising is wasted; the trouble is I don't know which half.
For digital transformation, probably even more than half the money is wasted. But you need to waste it anyway. Otherwise, the required learning wouldn't occur. Cost-cutting and efficiency won't help when it comes to creating great experiences.