Implementing business transformation doesn’t come easy to any organization, especially independently distributed brands. In this edition of CMO Outlook, Rob Wentling discusses the major shifts that need to happen within companies to change how they do business, as well as the impact a senior executive can have when stepping into the role of transformational leader. In Rob’s particular experience, he transitioned from a Chief Marketing Officer (CMO) role at ADP’s Insurance Services division to a Chief Strategy Officer (CSO) role at The Hartford’s Consumer Markets division.
CMOO: Independent distribution organizations aren’t too change friendly. This is true for independent insurance agents as well. When the need for transformation arises, where do you begin?
RW: Having a strategy is one thing but executing transformational change is something else. I think companies are realizing its okay to say you’re changing strategy but it’s so much harder to transform an organization unless you have a senior level person driving it and focused on it. Having it be a full time job—even for a finite time period—is critical if you’re actually going to execute any strategic changes.
CMOO: When do strategy changes turn into transformational changes?
RW: When you as a franchisor start franchising, you’ve spent a significant amount of time developing a strategy and execution plan, including a clear direction on target customers, end-to-end customer experience, product pricing, and services being provided. In the early years you’re focused on growing. And then you get to a point where growth starts to slow down. That’s when you refresh your strategy and transformation is needed. With few exceptions, transformations will impact both the franchisor and franchisee. If your refined strategy is focused on expanding to new customer segments without changing the in-store customer experience, products, and price points, most of the transformation is centered around franchisor and franchisee marketing. If your strategy requires changes in customer experience, product, or pricing, you have a holistic franchisee operational change, which is significantly more impactful.
CMOO: Stagnation of the franchise system can prevent a lot of change from happening without some very intense incentives driving it. How is the independent agent channel at adapting?
RW: So let’s say you’re transforming the customer segments that you’re targeting. The burden falls on the franchisor because they do a lot of the branding and probably some lead generation and awareness. You may go from a situation where your franchisees know how to create a great sandwich customer experience for the retired 65-year-old couple who comes into your sandwich shop at 3 or 4 in the afternoon to different sandwiches for 20-year-olds who are looking for Wi-Fi experiences in your store and have much different tastes. So not only are you changing your advertising, but at the exact same time, even earlier, you’ve got to start transforming your stores and franchisees to the new price points, the new customer experiences, and the new products that you’re delivering. It’s the same in the insurance world. You need to remind your distribution channel three to seven times in order for them to understand and appreciate the changes.
Making a change takes a lot of work. As human beings, you need to hear things multiple times, you need to hear it different ways, and you need to start to experience the changes that you’re implementing. So it takes time. From a franchisee perspective, there are weeks or months of nurturing and caring to bring up a new franchise, and then off they go. You need to spend almost as much time with them during the transformation. If you think you’re just going to communicate some things out, via an email or send them to a class for four hours, that’s not going to work.
CMOO: What characteristics and skills do you think make a good Chief Strategy Officer and transformation leader?
RW: You have to be collaborative, respected, innovative, pragmatic, understand your customers, understand your strategy, and be able to execute. You need to understand enough about all functional areas including technology, operations, sales, and product. This role requires somebody with a broad skill set, someone who can work well with others yet be a catalyst for change. It’s all in how you do it.
A lot of times individuals in strategic transformational roles come from management consulting firms. I believe marketing leaders are great candidates for a CSO role. If you have developed strategies and executed by aligning sales, product, and operations to achieve your desired results, you are a ‘shoe in.’