Exploring Tensions Between Marketing & Innovation
By Matt Whale, Managing Director at How To Impact
Ask a business leader how important innovation is and almost everyone will tell you it’s one of their top priorities and a critical driver of future success. And rightly so. According to McKinsey’s 2022 Innovation Report, companies that “harness the essentials of innovation” can: “generate economic profit 2.4 times higher than that of other players”. (*1)
Yet, ask those same business leaders where the responsibility for innovation lies and few will tell you that it is its own distinct function, led by a board director reporting only to the CEO. In fact, many will have innovation reporting to marketing…and that is the source of enduring tension because although marketing and innovation are good bedfellows, they are dominated by different mindsets.
Having worked with a great many marketing and innovation teams, I’ve witnessed that tension first-hand. It takes many common forms:
- variances in planning cycles
- alternative interpretations and practices for insight
- different approaches to idea generation
- and almost polar opposite approaches to product launches.
Fortunately, a lot of these tensions can be resolved by understanding the different mindsets required for innovation and using this to step out of a ‘marketing mindset’ into one that can help you ‘harness the essentials of innovation’.
Core Tensions
There are 4 core tensions between marketing and innovation that I have experienced consistently:
1. Short-termism
2. Different use of insight
3. Approach to idea generation
4. Launch Strategy
1. Short-termism
The average tenure of a Chief Marketing Officer (CMO) is currently just 40 months, the lowest it’s been in over a decade.(*2) The implications are obvious: CMO’s are under pressure to make their mark quickly, with a focus on immediate action through brand-building activity, annual planning cycles, and 1 – 2 year growth strategies. Add to this, the constant threat of de-listing from the grocery retail duopoly and the result of this is an extremely unbalanced innovation pipeline focused on the near-term. And the near-term biases incremental (non-disruptive) innovation.
There is a clear tension between this short-termism and the desire for a balanced innovation pipeline that covers a wider spectrum of challenges from the incremental, through to breakthrough innovation and disruptive innovation. This ensures that focus is maintained in the right proportion to the potential rewards, and that resources are not stripped from the more exploratory challenges that could provide sustained differentiation and long-term value for the sake of short-term gains.
We use an opportunity map(*3) to visualize innovation investment within an organization.
The y axis represents executional uncertainty – whether a feasible solution exists. The x-axis represents market & organisational uncertainty – whether the offer is viable or desirable.
The goal of a balanced portfolio is to protect and enhance current profit streams while securing footholds to future growth. A balanced portfolio has coverage across the map, although there should be more projects the lower the uncertainty gets (over-investment in very uncertain initiatives is also unbalanced).
When an organization has lots of fast turnaround at CMO level, you see a majority of efforts being focused down in the incremental innovation corner (AND a lot of rapidly abandoned projects) as these are the 1–2-year results they will be judged for. Due to the lower returns of incremental innovation, you tend to have a lot of projects in there, with maybe a few breakthrough innovation projects, meaning that innovation resources are diluted.
2. Different Use of Insight
Marketing relies heavily on insight – the understanding of consumer/shopper/user motivations and behaviour. Innovation relies heavily on insight too, so where’s the tension? you ask.
Marketing as a function focuses more on foundation insight to inform their understanding of the current status and behaviors of users, targets and influencers. This form of insight is often very data driven, to the level where data points are often confused and incorrectly referred to as insights. Marketing insight is a key planning tool, a data feed into that annual planning cycle, and one where large numbers of consumers/users are desired for confidence in decision-making.
Innovation requires a deeper insight – one that helps unlock growth by understanding barriers to change, frustrations, unmet needs and potential future behaviours.
Ultimately, innovation requires inspiration insight that digs deeper into human tensions, behaviors and attitudes through a more ethnographic approach.
Ethnographic insight is more resource-heavy, more tailored and more opaque. It can be tough to switch modes from fast, formulaic insight gathering to this style, and inevitably corners get cut – resulting in weaker insight.
It’s often the surprising revelations that can really open up an innovation brief, and that’s why we have a tool for helping us devise an insight plan that’s more likely to uncover these.
The empathy canvas is a guide to ensure you capture inspiration insight.
Half of your effort should be focused on talking to your core audience, which gets you reliable, representative clues. The other half of your time should be spent either talking to extreme or unusual users/consumers, in talking about your target audience with experts who know them well, or in exploring your challenge as your consumer. (See our recommended resource allocation across each area of the canvass.)
This approach ensures a far greater depth and breadth of learning, and also a greater empathy for our target because we’ve spent time walking in their shoes.
3. Approach to Idea Generation
Insights direct our thinking into potential solutions. Next we turn to idea generation.
What was the last brainstorm or ideas session you participated in? For most people, it will probably follow a fairly standard set of rules;
A focus on quantity of ideas
Build on the ideas of others
Encourage freethinking and free-association
Withhold judgement and criticism
These are all great rules, but they have changed little since Sir Alex Osborn (the ‘O’ in ad agency BBDO) created them back in 1953.
There is a huge emphasis on idea generation in innovation, and there is often frustration around the quality of output from this approach. This is due to the focus on generating lots of loose and small ideas, and more importantly that the final output is generally based on consensus, without any proper critique of the ideas potential to deliver.
When there is greater consensus within a group, it’s been observed that the outcome is lower quality and quantity of decisions made, a point made decades ago by Solomon Asch and his conformity test.*4 In contrast, when minority opinion, or authentic dissent is given more permission to play, it broadens and opens our thinking – leading to higher quality and quantity of ideas *5.
However, dissent slows down the process and can put noses out of joint. Creating a balance between nurturing others’ ideas and voicing authentic criticism is a must for innovation, but it can be very challenging. It entails involving people from really different backgrounds in the room who bring alternative perspectives, while actively pursuing constructive debates within this group. Criticism of your own and others ideas is an inherent part of the design process because design requires continuous evaluation.
4. Launch Strategy
Q. How many organisations launch something new just to experiment, with no intention other than to learn?
A. Not many.
Q. So, how many launch a new product or service to A/B test, or run a pilot before launch?
A. A few more, but not enough.
Q. And how many businesses build up to a major launch with full marketing spend, sales support and intense energy for 4-8 weeks and never tweak and re-launch?
A. Too many.
The reality is that it’s not really common practice to test and learn just for the sake of improving an idea. It’s the way that the marketing machine works: new offers are launched and if something in the marketing mix or DNA of the offer was wrong, the only thing to do is pull it. All that work gone, never to be seen again, even though the insight and unique thinking may have been spot on…but the final execution was not. Up-front investment is so heavy that if things go astray there isn’t capacity or budget to go back, learn, adapt, and try again.
Overcoming These Tensions
What these tensions all come down to is a difference in mindsets, and overcoming them starts with recognising the need for different innovation mindsets and putting them into practice. There are four key innovation mindsets that can be linked closely to each tension.
Positive Ambiguity: the leadership mindset is about remaining problem centric and solution agnostic. It’s about embracing the idea that there could be many possible pathways to a desired result, and being comfortable with not knowing exactly what that path looks like and trusting to a discovery process. Within an organisational context this means looking at the bigger challenges, taking the time to question briefs and make sure you’re tackling the right problem, and dedicating time to finding the right solution.
Everyday Empathy: the discovery mindset means not just putting yourself in the shoes of the user, but making this a habit within the organisation. It’s about getting that richer, deeper, human insight, which might involve some unconventional practices, or asking questions that others might not. Most importantly it’s learning from a range of different perspectives, while acting with a sense of curiosity and humility, to help put aside any biases.
Constructive Troublemaking: the collaboration mindset, is building stronger solutions with the right behaviours and habits. It’s about breaking out of the standard idea generation approach and learning from unexpected places that may face similar challenges, as well as being open to inspiration from other worlds. It’s switching modes of thinking to give space for counter-intuitive ideas, and adding in a layer of criticism, or constructive debate, before closing off on ideas.
Fearless Experimentation: the learning mindset involves looking at innovation as an experiment, where getting to the learning and socialising those learnings is the important part, rather than just getting something to launch which could be a waste of money. It’s about learning-by-doing, rapidly prototyping and having a thorough explanation of how the product or service will operate and perform before investing fully in development.
So, if you’re a marketer with an innovation brief, or an innovator collaborator with the marketing team, take a moment to assess your mindsets and how to break out of the patterns of thinking that inhibit successful innovation.
References
1 McKinsey ‘What is Innovation?’ 2022
2 Spencer Stuart ‘CMO Tenure Study’ 2022
3. McGrath and McMillan: “Discovery-Driven Growth’
4. Solomon Asch Conformity Study
5. Charlan Nemeth ‘In Defense of Troublemakers’
This article references content presented at an AMI X How To Impact Webinar 'Exploring Tensions Between Marketing and Innovation'.
Australian Marketing Institute is the largest industry body representing, supporting and guiding marketers. They provide Members training, networking opportunities, mentoring and the latest marketing knowledge to help progress careers.