The Creative Destruction of Marketing

In 1942, Joseph Schumpeter introduced the economic concept of creative destruction.  He theorized that radical innovation triggers transformation in economies as well as companies.  Innovation is the force that sustains long term economic growth even as it destroys the value of established companies.  This is an apt description of what is happening to marketing today.  Social media, interactive marketing, revenue cycle optimization, and innovation management are radical innovations triggering the wholesale transformation of marketing.

Couple that with an expansion of marketing’s scope and a groundswell to resolve, for once and for all, the sales and marketing mis-alignment, marketing’s transformation offers tremendous opportunities and hardships, just as Schumpeter had popularized. 

Marketing’s transformation is rooted in how the function is managed. Unpredictability is the rule which demands a constant stream of innovative activites, and results, executed with uber efficiency and flexibility. Navigating this requires that marketing be managed and measured differently.  The CMO’s KPIs need to reflect the function’s new scope and measure what matters – revenue growth, quality of customer lifecycle relationship, reputation and effectiveness of strategy.  And those KPIs need to cascade down the marketing organization and be aligned with sales’ KPIs. 

This is a critical time for marketing. CMOs need to lead their  company through this transformation with an inspired vision, gutsy and decisive leadership, fact-based decision making and a laser focus on how to drive constant revenue growth or marketing risks becoming a dirty word.  I’ve had several recent conversations with top notch marketers who are banning the word ‘marketing’ and ‘rebranding’ their functions into revenue-related words.  This trend threatens the real opportunity from the creative destruction.  The real opportunity is to transform marketing into the company’s center point of constituent life cycle understanding by continuously creating meaningful value, however constituents define ‘value’.

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