Who would have thought that General Electric (GE), one of the most admired companies in the world didn’t have a substantial marketing organization up until recently. And I’m not talking in number of people (they had 2,500 marketers a the time), but in its role related to strategic decisions, branding, and overall market direction.
In “Unleashing the Power of Marketing“, Harvard Business Review tells us an interesting tale of how GE transformed its marketing operations and gives us an interesting framework for applying to other businesses. The goal at GE was to transform marketing from a support function to an active player in driving revenue.
“Our framework centered on giving marketing a revenue-generating role in its own right.”
It’s a story worth reading, but since you may not have access to HBR (the article above requires subscription), here’s a summary.
Marketing as a Function
Building products that sell themselves is a neat idea and had worked well for GE for years. But, as the article points out, “The businesses were maturing, and like other companies, GE was learning that it could not win simply by launching increasingly sophisticated technologies or by taking existing technologies to new markets. Some of its best-thought-out new offerings were fast becoming commodities.”
GE then started to create a framework for its marketing group and came up with three core components:
After a thorough assessment of their expertise and functions, GE came up with eight disciplines organized into two groups, go-to-market activities, and commercial essentials. They became the core principles driving their marketing organization.
Their next step was to understand the roles marketing should play at GE. They came up with four roles: Instigators, Innovators, Integrators, and Implementers.
Having identified what they wanted from marketing, GE then started putting together metrics for evaluation of the marketing teams and started a process called Maturity Evaluation.
Principles of Marketing at Work
It started from the top down, with Jeffrey Immelt (the CEO) pushing marketing to have a “line” role instead of the historical “staff” role it had at GE. Marketing started to be held responsible for critical operating mechanisms like pricing and quantifying customer value. Marketing started to play a role in determining not just what the customer needed but also in applying technology to better meet customer needs.
As marketing started to work in new innitiatives, expanding its role, more funding was provided and new offerings were created.
“In all these initiatives marketing gets into the game at the start, sizing “white space” opportunities, meshing unmet needs with new technologies, and moving our brand in new directions.”
A new Marketing Framework was created, comprised of eight disciplines:
- Strategy and innovation
- Branding and communications
- Sales force effectiveness
- “New World” skills
- Market knowledge
- Segmentation and targeting
- Value creation and pricing
- Commercial activation
Throughout the transformation process, this framework was refined and always referred to.
Key Marketing Roles
As they progressed with their marketing transformation, GE also identified a few key marketing roles that would become essential for transforming the organization:
Marketers have to challenge the status quo and look for new and better ways of doing things.
At GE some units had a tendency to develop products because they could, not because the market needed them. Marketing helped business leaders think outside their usual market and started to identify opportunities that weren’t even on the table previously. It’s more than market research, is looking outside and understanding the changes happening in the marketplace, in buying decisions, and in who your target market really is. Armed with data, marketing leaders could then discuss new directions with business leaders and show other approaches to growth.
Turning marketplace insights into untested products, services, or solutions.
While in the past marketing was relegated to simply passing information along to the groups responsible for innovation (R&D or engineering), the new marketing team started taking an active role in more than just advertising or market research expanding its reach beyond product features and functionality to include pricing, delivery, customer engagement, and new business models.
For example, in the Aviation market GE used to sell engines on the basis of thrust and other quantitative metrics and has since changed its approach to focus on operational efficiency and resource productivity.
“Innovative marketers use unique marketplace insights to come up with products, services, or solutions based on untested ideas.”
Building bridges across silos and functions and between the company and the market.
At GE it was recognized that marketers sometimes have to be translators. They have to speak product language with R&D and customer language to the sales force. But more than that, marketing has the capability of bringing disparate groups in the organization together to assess market dynamics and help the company cross-sell bundled products. During crisis (like the recent economic downturn), marketing can help bridge the gap between businesses and help them have an integrated view of distribution, pricing, sales, and more.
Executing on ideas.
“Getting things done” is probably the most critical skill of a marketer, even more at GE where those without direct P&L responsibility have a tough time getting resources and driving change.
“Marketing leaders have to build coalitions and persuade others, using functional expertise, insights, and teamwork rather than authority”
At GE, for example, marketing had to gain trust little by little. First, by giving business units competitive information, industry analysis, and the like. With time, and success in the early efforts, other units started to request help with specific projects.
Marketing Maturity and Knowledge Gap
Understanding what needs to be done is only half the battle, the other half is getting people to actually execute. GE started to hire marketers effectively doubling the marketing organization in size from 2,500 people in 2003 to 5,000 today. CMO’s were appointed for each GE business and also at the corporate level, tapping both internal staff as well as hiring from the outside.
They also conducted a Marketing Maturity Evaluation, to better understand what was missing from their marketing toolbox. This evaluation became an annual affair where CMO’s would convene their marketing teams and go through the survey for measuring specific skills, performance results, and understanding possible gaps.
The maturity evaluation surveys had a list of 35 skills and 140 definitions. Each capability had a description of what success looks like. The teams would score their units and review the assessments with business leaders, then they would roll up the score to eight capability areas and see if the scores were aligned across the organization. As marketing teams worked on these self-audits, they created a common language across all marketing staff regardless of business unit. With results in hand, CMOs and CEOs started to see areas that needed improvemeent and could work towards getting the right training or resources needed.
Transforming Your Marketing Organization
Think you have a tough time? Well, if GE can transform its marketing organization and reinvent itself in only a few years, think how much more you could do and how much faster!
Start by looking at what marketing capabilities you need in your team. Then, do a gap analysis (or maturity analysis like GE) and candidly assess where you and your team stand. Put a plan in place to either hire or train people to reach the level you require and also identify what roles marketing should play in your company.
Do you see marketing as Instigator, Innovator, Integrator, or Implementer? Maybe different situations require a different profile, but in that case be ready to get your team members up to speed on what each role requires.
If you have to get different results and don’t know how to start, I hope this story gave you some food for thought.
Additional resources related to General Electric’s marketing transformation:
- Unleashing the power of marketing, by Beth Comstock, Ranjay Gulati, and Stephen Liguori, Harvard Business Review, October 2010
- How GE is disrupting itself, by Jeffrey R. Immelt, Vijay Govindarajan, and Chris Trimble, Harvard Business Review, October 2009
- The Immelt Revolution, by Diane Brady, BusinessWeek, March 2005