Philips Healthcare CEO Deborah DiSanzo tells McKinsey director Tom French how the right relationship with her CMOs helped turn marketing plans into growth.
(Note: Click play to watch a selected video from the series. You can also watch the complete chaptered interview on our YouTube channel).
Highlights from the interview:
Questions marketing must answer
We had to transform our marketing practices because our markets have been going through dynamic changes, and that is going to continue. What do the healthcare systems of the world need? What solutions must Philips Healthcare design to meet those needs? How can we best talk with our customers and with health-care systems around the world about those solutions?
Answering these questions is the job of marketing, and that puts marketing in the lead of Philips Healthcare and in the lead of the drive to create the future of healthcare. You could have the best R&D in the world, the best operations in the world, the best finance in the world. If you don’t have a world-class marketing enterprise, your solutions will not meet the market, will not make their mark, and will not create loyalty in your customers.
Organizing and empowering marketers
At the beginning of our marketing transformation, we had about 2,000 people with marketing titles. We found that, really, 1,200 did actual marketing. Then we found that among those 1,200, we had 600 unique job titles. We took the 1,200 marketers, put them into eight job families, and clearly identified what each of those job families was to do.
Then we started empowered-marketing courses to get all the marketers to the same basic understanding of what a marketing plan needs to look like at Philips Healthcare. But we found much greater benefits. We had had a marketing team that was feeling unempowered, disenfranchised, a bit victimized. When they started coming into the empowered-marketing courses, they would say things like, “I can’t do this. Finance won’t let me do it. R&D won’t let me do it. My management team won’t let me do it.” We’ve done a lot to encourage them and show them how to empower themselves, how to present themselves, how to have courageous conversations. Our marketers leave the three-day courses very empowered, ready to create a world-class marketing enterprise.
Nuts and bolts: Getting close to the CMO
The CEO/CMO relationship at Phillips Healthcare used to be a bit hands-off. Marketing was off to the side, charged with developing a brochure or trade show, for example.
It’s fundamentally different today. I sit with the my three chief marketing officers every two weeks to make sure they have the resources they need. I clear roadblocks, give encouragement, and empower. They bring me stories of how we’re empowering our marketing team to work with R&D to create beautiful new solutions. They bring me stories of how great marketing plans are turning into sales.We talk about details: What is it that home healthcare needs? What is it that the informatics group needs? Where are the markets moving? I find the conversations are rich and deep and actually quite energizing. We’re getting closer to the customers and closer to what the customers need.
The key to speed: “good enough”
We knew that we wanted to transform marketing. And the chief marketing officers knew that they wanted to transform marketing. We started very fast. But then I woke up one day and realized that we’d stalled for three months. So I got the chief marketing officers together to see what was going on.
The focus in this phase of the transformation was developing these empowered-marketing courses. And it turned out they were trying to put together a bulletproof plan so that noone from R&D or finance could shoot it down. I said, “Who cares what comes in five years? If we don't get through this year, five years doesn't matter.” We got to this notion that 80 percent is good enough. What do we have to do today? What do we have to do in the next two weeks? How do we move marketing forward now?”
Great marketing plans connect the entire company
Very quickly after we started the marketing transformation, all the other functions wanted to know “What’s going on ‘over there’ in marketing?” To inform them, and to integrate them into the transformation, we created a program we call end-to-end, which looks at customer value chains from the beginning of a solution right to the end, to the person who stands in front of the customer and gives the value proposition. It goes from idea to market, market to order, order to cash, and then cash to loyalty from our customers. Marketing is the integrator in that complete end-to-end chain.
Great marketing plans are the best part of the transformation here at Philips. It is simple. We have a 15-page template which includes things like segmentation, value proposition, pricing, channel to market, go to market. Some of the marketers thought they had good marketing plans before, but by using good segmentation and good value propositions, we are making them better. I cannot speak strongly enough about how good marketing plans have helped our execution.
We had a product that was twice the cost it needed to be in the market, and people thought perhaps that product was dead. But with a great marketing plan in place, we are now selling it to a segmented customer base that needs it, is happy to get it, and will pay the price they need for it.
What to look for in a CMO
Did you know, far back in my career, I was a chief marketing officer? I was that CMO who needed to make an impact with a new CEO. The most important thing for a chief marketing officer is to have the data, the facts, and to be eloquent in presenting them. If you are to be trusted, you need to speak with authority. Make sure you speak in terms of marketing plans with a return on investment.
I think a new CEO should spend the first 60 days watching how marketing is operating. What are the lines from invention to go-to-market? What does the chief marketing officer have to say? Is s/he empowered to do what s/he needs to do? Does s/he have the resources s/he needs? Does s/he have an ambition to have marketing lead?
If any of those are missing, think twice.
Philips Healthcare is a medical products and services company with 37,000 employees in 100 countries worldwide.