CIOs and CMOs - It's Time To Play Offense

This is the transcription of a speech I gave to CMOs and CIOs at the CXO Disrupt event in Chicago on June 15th.

The CIO and the CMO are often tasked, either explicitly or implicitly, with being the primary change agents for their organizations.  The CMO owns the pulse of the consumer and is responsible for delivering insights into where a particular industry is headed based on real, relevant consumer actions. The CIO is responsible for understanding all of the new capabilities of a rapidly changing digitally-driven world, and how those capabilities can support or upend a company's core business model.

Having said that, I’m here to suggest these roles work together on a very important problem. One that too few are focused on.  The problem I would present for you to solve, is to save your business; because if the two of you don’t take the right action for your business over the next few years, there is a distinct probability that in the next 10 years, it will no longer exist.

Standard and Poors reports that in the last 40 years the average lifespan of a S&P 500 business has decreased from roughly 60 years, to 15. In the 80s and 90s the disappearance of large legacy businesses had to do with businesses ‘bundling’; merging and driving through operational efficiencies. But the next 20 years are going to be driven by businesses ‘unbundling’.  Unbundlers are small, more nimble, digitally-driven businesses that focus on one product, for one persona and perfectly execute a digital-first customer experience.

In 2011, Mark Andreesen wrote a Wall Street Journal article titled "Why Software is Eating the World". His point was that every business, in order to survive and thrive, was going to have to become a digital business at it's core.  A digital business is built around the ubiquity of mobile devices, Internet connectivity, social and messaging platforms and the Internet of Things.  Digital businesses affect older institutions by "breaking up the packages they once offered, providing particular parts of them at a scale and cost unmatched by the old order.” In other words, they unbundle.

The question I have for you is, is this the problem you’re currently solving?  Are you focused on protecting market share, or are you thinking about defining new markets? Are you working on propping up old business models with digital technology or about using digital technology to define new business models?  

Are you thinking about the fact that the only way my children know how to buy any consumables in our home is by pressing an Amazon Dash button and having it show up outside of our door less than 24 hours later? Or that in the next year the dispensers for these consumables will be smart enough so our digital virtual assistants can place these orders for us?  Are you thinking about the fact that this year, Messaging apps surpassed Social Networks in monthly active users? And that voice is on pace to surpass touch as the primary form of human computer interaction? Do you have a strategy around Conversational UX?  Are you thinking about the fact that we can now get a loan online or invest in a high growth portfolio in less than 7 minutes? That I can order flowers with my voice while I'm doing the dishes in my kitchen? That Tesla makes a car that requires zero maintenance and drives itself on our highways (with a 17 inch relatively unused LCD screen), and that 400,000 people put a deposit down to buy the next model? That in May, FoxConn just replaced 60,000 workers with robots, and that our baristas and store clerks may not be far behind? That cloud based Artificial Intelligence services are now readily available for anyone to use, not just in the enterprise, but at every startup in valley? These are indicators of the very near future. As the change agents for your business you cannot turn a blind eye to them. You cannot make them someone else’s problem to solve.

Some companies understand that.  Some agricultural equipment manufacturers understand that software-driven precision agriculture can increase farming yields to a point that will negate the cost of replacing a tractor. Some engine companies understand that they can cut the cost of warranty claims and recalls by over 50% by connecting the engine and providing prescriptive maintenance suggestions.  Some companies understand that customers are willing to pay up to 20% more for the same products from brands that are viewed as “innovative”. Or as silly as it seems to be able to order a pizza from your watch, Twitter, car or Amazon Echo, that over the past three years, Domino’s stock price has outperformed its competitors by more than 2 to 1.

If you two are not thinking or caring or putting a strategy around what the future of your business actually will be, and it will be different, then chances are, no one is.

I've had conversations with marketing or technology leaders about this topic and sometimes I hear things like "we've got to get this new ecommerce system in place and then we can think about some of that stuff.” And you can replace eCommerce with marketing automation, CRM, CMS, etc. I’m not saying those things aren’t important, they are. But they are 1 lane of an 8 lane highway. In fact I view all of those platforms as defense.  What’s your offense?  What’s your strategy for digital disruption?  How can you unbundle yourself?

Maybe you personally don’t have the next “Big Idea” for your business.  Not everyone is going to be able to come up with something groundbreaking all by themselves. But are you putting the delivery model in place to find that idea?  Are you utilizing Lean Startup inspired test and learn strategies? Are you using a customer research lead design philosophy for your digital experiences?  Are you using an iterative Agile engineering approach?  Are you building a culture of innovation, where ideas are consistently gathered, honed and experimented on?  If you put in these next generation delivery models, the chances of you finding that next Big Idea grows exponentially.  And if you don’t have any of these capabilities, are you engaging partners who do?

I’m here to tell you, as a consumer and as a business buyer, I actually don’t care if you focus on these things or not.   I know I will be able to continue to get your product or service.  I know, over time, it will get cheaper and easier to access, and that if I don’t get it from you, I’ll be able to easily get it from someone else. As a consumer, I’ll be just fine. But as your business colleague, as a fellow technologist, a fellow American, Illinoian and Chicagoan, I care very much about what you do. I want your company to be successful. I need you to be successful. We all do.

So I want to ask you one last question. What side of the ball do you really want to be on? You went far in school, heck some of you went all the way.  You busted your hump over the past 10, 20 maybe 30 years to get into the position you are in.  This job wasn't handed to you, you earned it. And now you have a choice to make.  You can play defense. Just understand you’re not playing defense against other legacy businesses.  You’re playing defense against the Unbundlers; an opponent that is invisible, cunning and unrelenting. With a game clock that never expires. Or you can choose to play offense.  You can leverage your greatest assets, your people and your customers, to inform your game plan. You can define the playing field. You can change the rules.

If you’re up for the latter, and I hope you are, I would like to meet you.  I would like to introduce you to others like you. I would like to tell you that you are not alone.  That we believe in you.  That you can and will, win.

I'll conclude with a quote from one of my favorite authors, Mark Twain.

"Twenty years from now, you will be more disappointed by the things that you didn’t do than by the ones you did do, so throw off the bowlines, sail away from safe harbor, catch the trade winds in your sails. Explore, Dream, Discover."