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Focus, Funding and the Second Year

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Marc de Swaan Arons, Frank van den Driest

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Focus is a planning discipline, not a personality trait. When Marc de Swaan Arons and Frank van den Driest asked the top eight leaders of one organization to name the company’s top five goals, only two goals appeared on every list. Their Leading Global Brands study finds most global, regional and local marketers agree there is insufficient alignment and focus in their team’s priorities. The remedy is structural: cascade strategy explicitly, measure with common metrics, and align individual targets.

The money argument turns on the time horizon. Local teams lead brand activation and are rewarded on short-term results; the global team carries long-term brand health and innovation. Because the two sides are measured differently, the long-horizon work is the work that slips. The fix is overlap: both teams sharing some of the same metrics, and rewarding the global team when a product still performs in year two.

Key findings

  • Jennifer Davidson’s Coors Light global team could name roughly 20 things it might do and cut the list to five initiatives common to all regions.
  • Asked to name their company’s top five goals, the top eight leaders of one organization produced only two goals common to every list.
  • Local teams are rewarded on market share, total sales and sometimes profit, while the global team answers for long-term brand health and innovation.
  • Silvia Lagnado of Bacardi puts roughly 80 percent of a launch’s year-two volume down to trial rather than repeat, which makes year two the year support decides the outcome.
  • The correction proposed is shared measurement: rewarding local marketing heads partly on global results, and the global team when a product still does well in year two.

Balancing the short and long horizons

The argument sits in the reward system, not in anyone’s convictions. Local teams are paid on market share, total sales and sometimes profit; the global team carries brand health and innovation. Both sides accept that long-term health matters; only one side is paid for it. The predictable outcome is that a commercial developed globally to build equity can always wait a few more months. The mirror failure is just as plain: a global team judged on on-time launch will sell in an innovation a pre-launch test said was not ready.

Silvia Lagnado of Bacardi names the failure mode precisely: “post-launch we take the money away too quickly and move on to something else”. Even in year two, roughly 80 percent of a launch’s volume is still trial rather than repeat, and teams often lack the rigor to check that year-two support is where it should be. The remedy is overlap: some companies reward heads of local marketing teams on global rather than local results, and the authors propose rewarding the global team on year-two performance.

Building the case for brand investment

The funding argument is usually lost before the budget meeting, in the language the two sides use. In most companies the cascade stops once the board has fanned strategy out to the top thousand leaders and managers. The marketing organizations the authors most admire add a step: the CMO’s leadership team explains how marketing will contribute to the overall business growth strategy, translating revenue growth into penetration, share and repeat usage. They call that a transparent bridge between the business brief and its implications for marketing.

The second obstacle is that the brand side often cannot produce comparable numbers. After a merger the finance team aligns financial metrics immediately, while marketing, having commissioned research locally or regionally, has no comparable data on a metric as basic as brand equity strength at global level. Setting those definitions is the CMO’s job, and it can pay for itself: aligning research and eliminating duplication delivers significant cost savings that can be handed to local marketers to ease the move.

What a thirty percent cut breaks

Scarcity is when a strategy is actually tested. A few months after a summit agrees its priorities, when push comes to shove and resources are scarce, the new priorities lose, because those who agreed to them report to bosses holding other targets. A cut does not fall evenly: it falls on whatever nobody in the room is personally measured on, reliably the long-horizon work. And where brand health metrics are globally incomparable, nobody can decipher the absence of progress, which is not unwelcome to the people involved.

The answer to shrinking resources is to shrink the list first. Davidson’s team distilled roughly 20 candidates into five initiatives common to all regions. Walmart’s Stephen Quinn describes the same model as focusing on areas with a reasonable chance of success, then doing whatever it took there. Strategy, the authors argue, is as much about deciding what not to do as what to do, and then defending that position. Ann Ness of Cargill supplies the line: “The hardest thing to do is to stay focused.”

Scope and limitations

The evidence is the authors’ Leading Global Brands study, their consulting engagements and interviews with named senior marketers rather than controlled measurement, and several central illustrations rest on a single organization.

It was published in 2010, before attribution technology made lower-funnel returns trivially easy to display, which sharpens the tension it describes rather than resolving it.

Source

This page summarises The Global Brand CEO: Building the Ultimate Marketing Machine, by Marc de Swaan Arons, Frank van den Driest, 2010.