How Warren Buffett’s Pilot Can Save Your Job
It’s hard out there for a CMO. Here’s how to focus on what really matters.
There’s no question it’s been a difficult stretch for retailers — countless major retailers have posted losses in revenue and margin for a few quarters in a row. Executive shakeups were inevitable, and in many cases — Macy’s, Land’s End, Kohl’s, and Gap for starters — marketing executives bore the brunt of those changes. IDC research predicts that between 2015 and 2018, every year will result in 25% of CMOs losing their jobs. In a recent Forbes commentary, John Ellett said this CMO uncertainty is the number one decision imperative through 2018.
This highlights a predicament that retail marketers face in particular. Your business has two major goals: increase margin and make more money. But what’s on your to-do list? Increase brand awareness. Grow your social reach. Expand into new channels.
Why is it that so many marketing goals exist for most organizations but are not always directly connected with the primary business goal?
Two Macro Shifts have Impacted Retail Organizations
Let’s rewind the tape a few years to look at the circumstances that brought us to this entirely new world. The two major contributors are:
1) The complex customer journey
2) Greater investment in retail and ecommerce
First, the customer journey is no longer linear. This is largely because of the addition of screens, the increase of platforms, and the decentralization of publishers. It’s influenced by more bloggers and writers than any retailer could name. Social circles have taken traditional advertising’s perch as the primary influencer in the customer’s decision process. As a result, customers generate more data, creating an opportunity for scrappy startups with a data science bent to disrupt the industry that has been led by ginormous retailers for decades.
Second, VCs have recognized the opportunity in this data, pouring $11B into ecommerce startups since 2010. And the investment is not decreasing — it has grown 136% over the last four quarters alone. These scrappy startups have taken 2% market share from big retailers amounting to $64B in the past five years.
This trend forced established brick and mortar retailers to adopt some of the practices of startups, but that has led to massive hiring and creation of layers far below the C-suite.
What results is a game of telephone where the original message of “increase revenue at a solid margin” is diluted. The practice of building expertise in specific practice areas can be connected to the top-level goal when executed properly, but when executed poorly can actually detract from the top business objectives.
Misaligned Goals Across Departments
Here’s an example. Last year, we commissioned an independent study of retailers that showed 85% of organizations rely on IT teams to evaluate all new technology vendor partners. Practically, this means that marketing software decisions are not owned by marketing. So, if the goal of the software is to reduce friction for the customer between desktop and mobile, but the IT team is focused on minimizing onboarding costs of new tech, then the disconnect will inevitably stand in the way of the higher business goal.
A similar disconnect exists for objectives focused on things like clicks, likes, followers, email list growth, coupon redemptions, or even web traffic. Unless these metrics directly impact the highest level business goal, they should not be a top level objective for any single team within the organization.
This misalignment leaves large organizations exposed to threats from more agile ecommerce startups. With siloed teams, priorities and objectives naturally develop that are as closely aligned with the CEO’s top one to three objectives, compromising the success of the larger organization.
So How Do You Find Your Focus? Ask Warren Buffett’s Pilot
Nobody in the world has a better track record of consistent investing than Warren Buffett. He invests on simple premises and those who have had the opportunity to meet the Oracle of Omaha say that he can distill a topic to the salient points better than anybody they’ve encountered. The man defines success.
Buffett once asked his pilot: “I assume that you have goals that go beyond flying my plane around? What are those goals?”
The pilot listed off 25 things he wanted to accomplish before he breathed his last breath. Buffett gave the pilot an assignment and said that if he didn’t do this, he would likely have the feeling of accomplishment on some days but never really achieve the things that were truly important.
“Go home and write down your 25 bucket list items. Draw a box and write the five that are the most important. Those that you need to get done to feel like you have made an impact on the planet, your family and your legacy. Draw a second box and write the remaining 20+ items in that box. Spend every waking moment working on doing your top 5. Spend an equal amount of time avoiding the 20 items in that second box at all cost!”
One Vision, One Goal
Most CEOs would admit that they sometimes forget that their direct reports may be hearing our purpose and vision but not necessarily seeing it as something critical to communicate to their teams. But even the least-tenured staff member contributes to the end goal, and all CEO’s need their direct reports to communicate that.
So that’s why it’s critical that the entire company sees “create more margin dollars” as the goal that everything they do ladders up to, without room for error. With that in mind, ask your direct reports to run through the Buffett exercise. List 25 goals for your company this quarter and in the next year. Zero in on the top five that will move your business forward. Then evaluate:
- How many times did “Increase margin” or “Make more money” appear in the lists?
- How many of these goals can be tied directly to increasing margin or improving revenue?
- And do any of these goals actually detract from the larger business goal?
So what’s the lesson for marketers? Goals that feel important but are not the top business objectives will detract from your top-level goals. While they may serve a near-term function, they will actually just make you too busy — and you won’t succeed.
Being busy is not the same as being productive. But being productive — figuring out the most important things and then focusing on them solely — are what will bring you success.
Marc Grabowski is CEO of Persio. This post originally published at blog.pers.io.