Spanning Silos, A CMO’s Job Guide

October 15, 2008

BY MICHAEL KRAUSS

David Aaker’s new book, Spanning Silos: The New CMO Imperative, published this month by the Harvard Business School Press, is a must-read for every chief marketing officer and any marketer that aspires to that lofty C-level role.

Aaker is best known for his books on branding, including Brand Portfolio Strategy, Brand Leadership and Building Strong Brands, and his role as vice chairman of Prophet, the global brand consultancy.

I like Aaker because he’s an academic who provides practical, pragmatic guidance to marketers. Spanning Silos is just that, smart advice for CMOs who Spencer Stuart, the global executive search firm, report last only 23 months in their jobs.

If CMOs want to succeed, let alone survive, they’ll pay heed to Aaker’s new book about spanning silos. My only advice to Aaker is about the title of the book. It should be called Spanning Silos: A CMO Survival and Prosperity Guide. CMOs who read and follow it are more likely to advance.

“It’s become clear for companies that have marketing talent, silos present a barrier,” Aaker says in an interview. “For companies that don’t have great marketing people at the top, the silos create paralysis. They can’t get anywhere.”

“I’ve come to believe the great organizational insight of [early General Motors chairman] Alfred Sloan: to decentralize is no longer viable. It doesn’t mean you have to completely disband silos, but you have to find a way to make them stop being a barrier,” Aaker adds.

“Business strategy, for many firms, now involves creating cooperation, synergy and resource allocation over silo business units. The challenge is to develop organizational structures that will help overcome the stultifying parochialism and power of these silo groups and enable that strategy to succeed,” Aaker says.

What are silos and why are they a challenge? Aaker reminds us that silos are “tall, self-contained usually sealed cylinders that frequently contain commodities.” In business, silos are a metaphor for an organizational unit that has its own management team and talent and often lack the desire and motivation to work with other organizational units.

Silos can develop by business function, by geography, by industry, by product line, by brand or by customer type. While decentralization assures focus, Aaker argues, in a dynamic global environment, silos lead to ineffective allocation of resources and missed opportunities. Aaker believes stronger products and brands, breakthrough marketing programs, greater ROI and profitability will result if the CMO can span the silos.

Aaker recognizes that CMOs face significant barriers. Central marketing, the CMO’s bastion, is often viewed as an enemy and a threat. The energy and motivation to span silos can be lacking. CMOs may not have CEO-level support and the resources for the task. Even with support and resources, it’s hard to create cross-silo programs. But Aaker points to numerous examples, including IBM, McDonald’s and Sony, where silo-spanning efforts prospered and led to a rejuvenation of the organization.

Aaker sees the CMO as the lynch pin for success. He recognizes that CMO roles will vary and he articulates different modes of operation for CMO success depending on the business and organizational context. CMOs may serve the business as facilitators, consultants, service providers, strategic partners or strategic captains. Aaker lays out the how’s and the why’s for alternative CMO leadership modes.

Spanning Silos is organized into a series of chapters that address key challenges CMOs and organizations face, including:

• Finding the right role and scope
• Gaining credibility and buy-in
• Using teams to link silos
• Developing common planning processes and information systems
• Adapting master brands to silo markets
• Prioritizing brands in the portfolio
• Developing winning silo-spanning marketing programs

Aaker also addresses best practices and provides a guide for new CMOs, laying out a road map for what they should do in their first 90 days on the job.

He points out the signs and symptoms of dysfunctional central marketing organizations and what to avoid as a CMO. He advocates limiting bureaucracy and warns about central marketing structures that have a “Big Hat, No Cattle” (i.e. lofty talk, but no authority) structure that appear to be run by uninformed dictators and situations of total anarchy.

Aaker defines a variety of practical, value-added activities and initiatives that CMOs can initiate to help build, guide and drive their organizations forward. He describes process activities (e.g. instituting a common marketing planning framework), training and marketing talent improvement, improved research and customer insight efforts, better measurement initiatives, improving marketing expertise in targeted areas, guiding alliance and M&A efforts, improvements in the resource allocation area and taking a seat at the strategy table.

As a CMO, you may not be able to do it all, but Aaker lays it all out for you in a thorough and compelling manner. Aaker’s book is an ideal reference for a CMO facing a new organization. It is a complete inventory of possibilities that will catalyze your thinking.

What’s Aaker’s advice to first-time CMOs?

“The danger is to get wrapped up in the day-to-day operations and fire-fighting meetings,” Aaker says. He believes your initial C-level efforts should have two prongs. Assess the organization’s capabilities and build a prioritized action plan.

Still you may run into opposition from silo-based executives who don’t or won’t see the bigger picture. Aaker shares stories of CMOs who attempted to span silos and failed. He offers one nugget that stands above all the rest.

“The ultimate source of influence is customer knowledge,” Aaker says. “When the CMO team has a better grasp of the customer than the silos do, or at least has the same level of understanding as the silos, the discussions can proceed,” Aaker adds.

Communication is the start of collaboration. Marketing breakthroughs emerge from there.

Michael Krauss is president of Market Strategy Group, based in Chicago, and can be reached at Michael.Krauss@Mkt-strat.com or news@ama.org.