Marc de Swaan Arons was the guest on an episode of Future Proof, the marketing podcast made by Kantar with the Saïd Business School at the University of Oxford. He is described there as the founder of the Institute for Real Growth, and corrects the introduction to co-founder, crediting the work to his partner as well as himself.
The Institute’s first initiative moved past the earlier work on the role of the CMO and the head of insights. Companies across disciplines were grappling with the growth question, so the study asked how the companies that overperform act and think differently, and how they drive growth that lasts.
The answer runs through seven building blocks of real growth. Three concern what an organization offers, three concern how it thinks and acts, and one concerns why it does what it does. Real means sustained, and it means humanized.
Key findings
- The research reached growth leaders in 73 markets, more than 550 of them, in interviews given in confidence. A quantitative survey followed with almost 2,000 participants globally.
- Two further strands supported the interviews. An AI analysis read the interview transcripts alongside everything reputable published on business growth over the previous five years. LinkedIn, one of the Institute’s partners, then analyzed three and a half million users to test what the study had found about how connected a company is inside and out.
- Everyone measures top line growth. What separated the overperformers in the survey was that they thought about growth much more broadly, including the growth of their category and of the space beyond it. Underperformers talked more about profit growth and market share growth.
- Overperformers also carried metrics beyond the financial ones, covering growth for their people. That is the conclusion the study states as humanized growth: value delivered to the community, to employees, to clients, and to colleagues.
- Overperformers define their markets far more abundantly. The recommendation that follows is a rule of thumb: redefine the market so that your own share of it does not exceed 3 percent. At that point the competitors are different ones, doubling the share looks viable, and the partners worth working with change too.
- On culture, the LinkedIn data showed people inside overperforming companies connected to the outside world by a factor of five against underperformers. Collaboration between marketing and sales was better by more than a factor of two. Diversity at the senior strategic decision making level correlated highly with growth overperformance.
Redefining the market you are in
The abundant market is the first of the three building blocks about what a company offers. It is a question of where to play, answered by need rather than by the functional definition of a category. De Swaan Arons calls that liberating for the thinking.
The example given is a hair care business. On the retail panels it reads as a 30 percent share. Amazon put the same business at about 11 percent, because Amazon counts hair dryers and curlers as competing for the same dollars.
Widen it once more, to the crowdsourcing sites where people are inventing new hair care concepts and experiences, and the share falls to 3 percent. The point is not the smaller number. It is that serving 3 percent of a large market opens up what you can customize, rather than driving you toward the lowest common denominator.
Running more than one business model
The second building block is the acceptance that a portfolio now needs multiple business models, which is not something companies enjoy. Unilever is offered as the plain case, buying far more small brands with far less scale than it used to, because that is what fills out a portfolio against current demand.
The example he prefers is that Coke and Pepsi announced major business model changes in the same month. Coke bought a coffee retail business, which nobody would call the same trade as putting bottles of soft drink into a supermarket. Pepsi bought a company built on a subscription model, which lets it use far less plastic and lets customers mix flavors.
Both moves came under new leadership, and de Swaan Arons reads that as a measure of how hard the change is rather than a requirement for it. Asked whether it always takes a new arrival, he says no. What leading organizations do instead is create safe spaces where these things can be nurtured and experimented with. He calls holding two models at once playing chess and checkers at the same time.
The customer who is never satisfied
The third building block is taken openly from Jeff Bezos, who wrote that organizations need to accept the eternally dissatisfied customer. De Swaan Arons agrees the acceptance is tiring and calls it the guidance for the future.
His own behavior is the illustration. A new feature appears in one app, and within a few weeks he is asking why another company’s app does not have it. Expectations move across categories immediately, so the business has to live with a consumer who is permanently and beautifully dissatisfied.
The answer he gives is to stop selling bare product. In one client discussion a CMO asked his team what share of sales was product alone, and the honest answer was about 70 percent. Selling product alone is lazy marketing, on this argument, because information shows intimacy with the customer and allows customization, and services open the door to partnering with other organizations.
The factory is not the constraint. A plant making margarine or shampoo or car parts will not change quickly, and it does not have to. What can change is the service built around what it makes: how fast the thing is delivered, by whom, and what else travels with it.
From the oil tanker to the flock of birds
One of the three qualities on the how side is that the organization becomes anticipative and far more agile. De Swaan Arons says he has reversed his own image for this. The familiar one is the senior leader turning a great ship one degree at a time. He no longer believes the work is about moving oil tankers.
The image he offers instead is a flock of birds, moving fluidly and in concert but changing direction fast. In practice that means the anticipative organization fights micro battles. Teams are equipped for one battle, then disbanded and reconstituted with the people the next one needs.
He also rejects the framing of disruption itself. To be disrupted is to be reactive rather than proactive, so the term is a defensive one. Getting ahead of it means defining the market abundantly and thinking about the solutions you bring far more comprehensively.
McDonald’s is the worked example. Customers were having its products delivered outside its control, competitors all had some form of delivery, and new food businesses were being built on delivery alone. The company decided it had to master delivery, and delivery is now a real part of the business in most markets. He describes the discipline as playing war games against yourself.
Whole brained solutions
Nobody interviewed said they had too little data. Some said the data sat in the wrong place, or was not synchronized with how decisions were made, but scarcity was never the complaint. Technology, on this view, is arguably a commodity.
What separates the overperformers is the overlay. Data has to be overlaid with human insight, and technology with human creativity. Without that pairing, de Swaan Arons says, you are left holding things that are interesting and worthless. Marketers and insights leaders are the ones who take the data back to an understanding of human need.
Both ends of the spectrum are moving toward the middle. Companies built on data mastery and A/B testing eventually run out of ideas, and where cost programs gutted the marketing and innovation departments the people who would have supplied them are gone. Adidas is offered as the opposite case, bold and creative in its communications but weaker at reading the data, and now building apps, services, and experiences.
Rewriting the culture script
Each of the seven building blocks was opened with a pervasive myth about it. For open culture the myth was that culture cannot be changed, that it is like DNA. De Swaan Arons places himself on the side of that myth, and says he has not been part of many successful culture changes.
Studying companies such as Cisco and Microsoft changed his mind. The insight he now offers is that successful leaders recognize they can rewrite the culture script. Every company has one, and a new joiner learns it almost immediately, down to when lunch is taken and how long you may be away from your desk.
Microsoft is his illustration of the scale a change can reach. A company once obsessed with having the best technology now orients on customer satisfaction. He reports being told that its sales and business development people do not earn bonuses unless clients actually grow because of what they bought, even when the numbers are up.
What this asks of the marketing leader
The role has changed sharply. There are roughly three times as many CMOs as there were twenty years ago. Much of that growth came from heads of communication in companies that never had marketing departments, because they had great products or great technology. Many of those people carry communications experience rather than marketing experience.
The consequence de Swaan Arons draws is blunt. Marketers who do not want their company appointing a chief growth officer instead of a chief marketing officer have to own more than how to win. Digital demanded new metrics and new partners and deserved the attention it got, but not at the cost of the question of where to play.
That question is what pulls the pieces back together. Deciding what to offer people as solutions decides what market you are in, which decides who you collaborate with. It drives more intense collaboration inside the organization with other functions, and with new partners outside it, which is where open culture and organization meet.
Scope and limitations
This is a conversation about the study rather than a report of it. The LinkedIn analysis was still unpublished at the time of recording and the numbers are given as a factor rather than in full, on the speaker’s own statement that he cannot give them yet. The finding on how growth is defined is described as indicative rather than settled.
The study did not examine how functions such as finance and human resources need to change. What it looked at was how the marketing or growth leader engages with them.
Source
This page summarises Future Proof: What is the best way to grow a business?, by Marc de Swaan Arons.