The need to pull purpose directly into storytelling has never been greater. Consequently, an ability to marry creativity with technology to create experiences that convey a brand’s purpose emerges as a competitive advantage. As this new paradigm ensues, leading marketers are experimenting with a multitude of storytelling media including VR + AR, to bring brand purpose to life, in authentic and engaging ways.
For my most recent Ask the CMO column, a series dedicated to analyzing the latest trends and disruptions in the marketing landscape, I had the pleasure of speaking with James Thompson, CMO of Diageo North America, about the company’s most recent foray into purpose-driven VR storytelling. We discussed a wide array of topics ranging from the revolutionary marketing technology he empowers his team with to democratize the use of data, to the rise of emotional intelligence as a new strategic imperative. Following is a recap of our conversation:
Billee: So, why don’t we first start with all of the different changes taking place in the marketing landscape. You’ve done a lot to shake things up at Diageo and I’d love to hear your take on the environment, in general, and how it has colored the transformation you have led as CMO?
James: Thanks for the question. We’re really proud of what we’re doing and have built a really proper modern marketing department over the last two or three years. What we said was: “look, there are obviously lots of changes in the environment going on, so how do we navigate through that?” We needed a ‘North Star’ to guide us and we said okay, well let’s look at the old four Ps of marketing that were invented by Porter at Harvard in the 60s and refresh them-purpose, partnership, performance and personal. Let’s invent a new model for the future and build everything off this really purpose-driven brand and be really clear about what we stand for. We need to be clear on what our Diageo’s brand stands for and be a beacon for people, whether they like it or not.
We also looked at being clear and having a purpose for each brand that can be understood and personalized at scale. To do this, we developed expertise in the digital world so that we can scale up audiences to gain advantage. We also focused on partnerships because the world is so big and so fragmented that it’s now very difficult to win on your own. So, the quality of the partnerships you enter and the way you execute them is critically important. Lastly, we focused on performance management, with performance marketing underpinned by data analytics.
Billee: I’ve read a lot about your work to reshape Diageo’s culture in a way that would help in your efforts to market externally to consumers. Can you tell me about that?
James: Sure. It’s really an important piece for us. After all, what is the point of having all these great people if they’re not empowered? So, we put a couple of things in place: We created in partnership with The Boston Consulting Group, a tool called The Marketing Catalyst, which meant that we democratized data so that it would be available to everyone, not just a select few. The process has enabled our teams to manipulate data on their own screens and become much more sophisticated in performance management as a result. What that means is that everyone throughout the department can simulate scenarios and understand the return on investment or the change in market share. Our tool can predict to a 95% accuracy rate, which is incredibly powerful. What this does is it allows the first question in a meeting to be around the facts and telling us what we need to do first. The second thing we have put in place is that we have really moved decision-making down from our senior leadership as much is possible.
So, culturally we are able to lean on each other and strengthen our ability to communicate and make critical decisions in real time. We created something called ‘one-click escalation’ which puts a problem to me (when it can’t be solved) and I have guaranteed that I will give them an answer, one way or the other within 24 hours . It might not be the one they wanted, but we are able to use the organization to get some sort of solution. So, it’s about data. It’s about empowerment. It’s about being agile and it’s about giving great people a chance to do their best work.
Billee: That’s a really great way to empower people and build culture. Obviously, you have embraced technology but it sounds like you strike a great balance between art + science, man + machine. Can you talk to me about that?
James: The Catalyst tool I’ve mentioned is the key decision making tool because it’s the one that tells you about performance and analytics and accesses every bit of data that we have. We really try to suck up as much data as we can and put it into action. That’s the key. The breakthrough here is the ability to manipulate data and put it into practice. At the brand manager level, the key innovation is that science comes first, because if you don’t have a firm foundation of knowledge, of facts, of rigor and analytics, your sort of shooting blind. But, then after that, it is almost all art. It’s kind of about what can you do with what you’ve got? I believe that change in business performance ultimately comes from innovation married with creativity. Something else I discuss a lot that fits into this part of our discussion is the importance of failure, because if you don’t fail, you’re not really exhibiting signs of life!
It means you’re not trying, because almost by definition, trial leads to some form of failure. The important thing is to fail faster and cheaper than people have failed before. So, it’s not the frequency or failure you want to reduce it’s the cost of it and you want to accelerate the learning from it. If you don’t underpin all of this type of thinking culturally, you end up with a with a sort of fear of failure and you just can’t have that in your organization these days. Failure is essential to both innovation and competitive advantage.
Billee: So, the cultural underpinning I think is vital, is this idea of creativity needing to be married with technology to really drive success today. I think that your recent VR campaign might speak well to this?
James: Yes, it’s really interesting where the Decisions campaign came from because our company purpose is celebrating life every day, everywhere. A critical part for us was figuring out how can we bring that notion of celebrating life to addressing some of the problems that come with misuse of the things that we sell?
Now, the fact of the matter is that drunk driving and underage drinking are at all-time lows in this country. You know we want to bring them down even further. However, the issue of binge drinking is still a big concern. Our new campaign, Decisions: The Party’s Over seeks to capitalize on the fact that its projected that virtual reality users in America will hit nearly 50 million in the near future. I think it’s just 49 million by 2019. We said, okay now’s the time to really create something with this platform. What we’ve done this time is use a different application on VR or Oculus Rift. This allows the user to toggle between the views of four characters who are at a party that one of them is hosting. In one experience, things go down really badly and there are two different stories where you can see them from different people’s perspectives and it’s no holds barred. You come out thinking “I’m never going to do that.” It’s just incredible actually. So, it’s really served to move people and I am proud that we are doing something very positive with our marketing, our purpose and our technology.
Billee: That’s really interesting. The next question I have is about the idea that emotional intelligence should be folded into all of the technology that we use and all the experiences that we create. So, I’m just curious, generally, about your thoughts on emotional intelligence and how it can be applied to achieve desired outcomes?
James: I think the jury is no longer out on the way neuroscience has progressed in terms of understanding how people make decisions. There is a lot of discussion around the way the brain processes informational communications through the amygdala, which is connected to emotional response in the brain which are then prepared to process rationally. Obviously, this happens in a split second, but what that tells us is if you’re not appealing to the emotions you’ve got no chance of getting any rational message. Part of what we try to do when we develop any marketing now is to watch for the emotional response that it is going to create and determine how people are going to feel when they see this. That’s quite different from how people used to make marketing which was around what’s your key reason to believe and what’s the key thing you want to say. Those things are important, but only after people decide how they feel.
Billee: Last question, can you share any thoughts on trends that are going to continue to play out in the balance of 2018?
James: Well I think that there are conflicting pressures. There’s the pressure on costs and then there’s the pressure on scale, and they are conflicting. There are companies who are talking about new models with agencies and a cost based approach. At the same time people are talking about hard and not hard cuts in the digital world. I think those pressures will be with us for the next five years at least. I think the whole zero-based budgeting is going to be with us at least throughout that period of time and people are going to be looking for either more dramatic ways to get noticed or people are going to probably abandon the creative side of the mix for their numbers.
Personally, I think that both would be mistakes. Consumers feel strongly about a brand standing for something and doing important and interesting things. But at the same time, you see people retreating into a fairly conservative space. Hopefully the right balance will emerge but do so in a way where purpose continues to be important. The opportunity for brands in the world has never been greater.