Q&A: Jim Stengel - Shared wisdom

The ex-P&G chief is keen for senior marketers to learn from each others' success.

In 2008, Jim Stengel, then global marketing director at Procter & Gamble, ended his 25-year tenure at the company to set up his own think tank and consultancy.

His legacy at P&G, where he left behind a budget of $8bn and responsibility for 7000 employees, was far-reaching. He was credited with reversing a slump in several P&G brands, including Pampers, through the use of the brand agency model, where a single executive and agency are put in charge of a brand's entire marketing strategy. The tactic, rolled out in 2007, first with Oral-B, has since been applied to 11 other brands, including Gillette, Pampers and Pringles.

Stengel is now president and chief executive of The Jim Stengel Company, which has a focus on proprietary research. In addition, he is the author of Grow: How the World's Best Businesses Use the Power of Ideals to Outshine the Competition, due to be published in 2011, and is adjunct professor at the UCLA Anderson School of Management.

- What influence are you bringing to bear on the marketing industry today?

I'm very much inspired by the time I spent at P&G and the companies I am consulting with today across Europe, North America and Asia. As global marketing director at P&G, I had a strong feeling that marketing and business were not achieving their potential and I wanted to do something about this before it was too late.

I have observed brands at P&G that were rocking and moving and others that were stagnating, and studied why they were different. I have since developed a framework that forms the basis of a forthcoming book examining why and how certain brands have risen to the top, based on stories and examples from my own experience.

I'm also teaching an elective for second-year MBA students and all our correspondence will be through social media, such as blogs and tweets. Great brands understand that social media and conversations are important for adding value and engaging with customers.

- Have marketers earned their place in the boardroom?

If you think about the influence, impact and presence of marketers at certain companies today, they have definitely earned their place at board level, even though they may not technically be on the board.

Fabio D'Angelantonio, chief marketing officer at Luxottica (the parent company of brands including Oakley and Ray-Ban), is very close to the company chief executive in terms of brand strategy and development. Trevor Cairns, chief marketing officer at Nike, and Jim Farley, the group vice-president of marketing at Ford, are very plugged-in at the top, spearheading innovation. Soo Shin at Samsung has also had a big impact on spend and how the brand is viewed by consumers.

- Where are marketers going wrong? Has the role of chief marketing officer become redundant?

The challenge marketers face is related to the environment they are working in today. The recent recession has placed consumers in a position they have never been in before - they have experienced a huge jolt to their confidence, meaning that marketers are having to work harder than ever to predict the nature of future growth and demand.

I'm interested in examining whether there is something we can do to lift performance by pinpointing the actions that brands can take to create marketing that works.

Marketers have to make a fundamental shift in the way they plan. They have to plan two to four years in the future, depending on developments in technology, but they have to be very responsive, too, reacting to sudden shifts in market trends. They have to understand who is talking about brands and why.

The days of putting a plan together and executing it are past. Marketers need to put a plan together and respond, which demands different skills. They have to think harder about the people they hire and the kind of skills they are looking for, the type of agencies they work with and the team they put together.

All this means that marketers require different capabilities. They have to put consumers at the centre even more and be analytical, both at the same time. By providing content that is valuable and having the ability to measure this, brands can develop trust and confidence among consumers.

- What defines an innovative brand?

An innovative brand is one that is always striving to do what has never been done before, consistently surprising consumers and offering them something they want to aspire to. It's not about copying. Apple, for example, does not get into a market unless it can do exactly the above and it continues to deliver the right numbers at the right time.

The Discovery Channel differentiates itself from the competition through its content, giving customers an experience rather than simply a programme; and Red Bull is one example of a brand in the packaged-goods area that continues to surprise and delight its customers.

Marketing has to work closely with research and development - the more competitive markets get, the more brands copy each other. Innovative brands consider their role with regards to the environment and sustainability and they think about their impact on the world in a way that extends far beyond corporate social responsibility to become more about central brand strategy.

Companies such as drinks producer Innocent in the UK, skincare providers Natura in Brazil and L'Occitane in France are leading the way in this area. Innocent's existence is based on helping people experience higher levels of enjoyment and to have fun, and the company has built a very special culture around these feelings.

Waitrose, too, excels when it comes to innovation and customer experience - it's a company where everyone understands the business' mission and strives to achieve this.

- Is Procter & Gamble still leading the way when it comes to marketing?

Procter & Gamble is a company that is more than 170 years old. It was not always known as leading the way in creativity, but it certainly prides itself on growing talent.

The system of putting an agency in place for each brand, where the agency is remunerated on the strength of its results, means all parties are rewarded in the same way, creating highly effective teams.

As a company, it is sensitive to the consumer and to where new areas of growth are likely to be. At the core is marketing innovation - this requires the company to be very much in touch with consumer behaviour and to be able to respond and react in real time to their needs.

Companies need to be empathetic to consumer demands, but they also need to grow their brands and their products.

In 2001, P&G was not growing its brands - any turnaround meant it had to be distinctive, it had to put the consumer at the centre and it needed a motivated crowd working on projects.

It has recently announced a big increase in advertising spend (to more than the company's expected sales-growth rate this year), which is exactly what needs to be done.

You once predicted that P&G would spend 10% of its budget on digital marketing. Do you still stand by this?

Digital continues to move up the marketing agenda and in the coming years, the divide between digital and non-digital marketing will become obsolete.

You can't create or define a brand without thinking digital first. Every brand I am working with now starts by looking at how consumers are being entertained and where they are seeking their information, and digital comes first. People still want great content and marketers have to provide what people want and will attract them.

Pampers is a perfect example of how to put this into practice. A few years ago, it was in a slump and came back - it appealed to its audience through an online forum providing advice and help, building trust among mothers.

Jim Stengel will be a keynote speaker at the European CMO Conference in Zurich on 30 September. For further information, visit www.cmo-conference.org If you have a marketing question for Jim Stengel, post it at www.cmo-conference.org/marketing. He will answer the top-ranked questions at the conference and a full video of his talk will be available online afterwards.

JIM STENGEL - CV

1977: BA, American Studies, Franklin & Marshall College

1979-1983: Various roles in the Time-Life Books division at Time, Inc

1983: MBA, Pennsylvania State University

1983-1991: Various roles, working on several brands, Procter & Gamble

1991-1999: Advertising manager, food division, rising to general manager, Czech and Slovak Republics, P&G

1999-2001: Vice-president, Europe, baby care, rising to vice-president, global baby care strategic planning, marketing and new business development, P&G

2001-2008: Global marketing director, P&G

2008-present: President and chief executive of The Jim Stengel Company; on the board of directors for AOL and Motorola; adviser for MarketShare Partners

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