Transcription
[Music]
Welcome to CMO Confidential, the podcast that takes you inside the drama, decisions, and choices that go with being the head of marketing. Hosted by five-time CMO Mike Linton, welcome marketers, advertisers, and those who love them to Chief Marketing Officer Confidential.
CMO Confidential is a program that takes you inside the drama, the decisions, and the politics that go with being the head of marketing at any company in what is one of the most scrutinized jobs in the Executive Suite. I'm Mike Linton, the former Chief Marketing Officer of Best Buy, eBay, Farmers Insurance, and Ancestry.com.
Here today, we have guest Rashad Tabakawalla. Today's topic: a leading marketing thinker and futurist. Rashad talks about what is next. Rashad has had major positions in many agencies, including President of Starcom, Chief Innovation Officer of Publicis, and CEO of Denu, an agency focused on the creative process. He's also a best-selling author, in-demand speaker, and the host of "What's Next," a podcast that focuses on, you guessed it, listeners, what's next. It's a wide-ranging look at the future and the forces shaping it.
Welcome, Rashad.
Thank you for having me, Michael.
So, first question, let's just jump right into it. We can talk about the future, and I know you think about the future all the time. Tell us about the future for the business, the key forces you see coming down the road.
So, I see all businesses that I'm looking at this from a perspective of business and not necessarily just the marketing aspect of business or the agency aspect of business. Right? We have four big shifts going on, and these four shifts are what every leader, whether they be a marketer, the head of an agency, or the head of a business, need to be aware of.
The first shift is what I call a power shift. Power is basically moving from companies to consumers, from leaders to talent.
The second is a mind shift. The mind shift is basically people, especially younger people, are questioning everything—from where they work to whether they believe in capitalism.
Sixty-six percent of Gen Z who have a full-time job also happen to have a side hustle or a passion project.
You just said 66? Holy cow! Because I'm writing this new book called "Rethinking Work," so this is sort of the research that I've just discovered. Twenty-two percent of Gen Z believe in capitalism, while 66 percent of baby boomers believe in capitalism. Right?
So, there's this mind shift, there's this power shift, then there's what I call the boundary shift. You know, in the world of marketing, what's above the line and below the line, and offline and online, and social and mobile and e-commerce? When someone looks at a video on TikTok, decides to buy a product, and picks it up at Walmart, what's that?
So, most companies have been organized according to the containers of the past. And, you know, whether it's the collapse of the funnel or the questioning of a campaign, increasingly people are thinking about journeys and omni-things versus simple things. Right? So, that's what I call the boundaries.
And the last one are technology shifts. We're entering sort of the third technology age, where some combination of AI, AR, VR, voice, 5G, and blockchain are going to have the same impact that the first connected age, which is about search and e-commerce, and the second connected age, which is about mobile, social, and streaming did.
So, you have these technology shifts, you have these mind shifts, you have these boundary shifts, and you have these power shifts. And people, therefore, are asking, but what I see with CMOs and leaders, they ask three questions.
Number one is, how do I make sure that my business model is relevant?
Number two is, how do I make sure that my partners and my talent are relevant?
And if you give them enough drink, they will ask, how do I make sure that I remain relevant?
You bet! Because this is a pretty major shift. When you look back in history, it's probably hard to see a shift of this many things at once in our life, maybe, right?
It's the biggest shifts I've ever seen. And I've been, obviously, like you've been around the block a bit, and I've been doing this now for 40 years plus. I was obviously a pioneer and led a lot of the first and second shifts. I was involved in the first and second, and the third one is because the first two were a little bit more technological and economic.
So, you know, you tended to have a technology shift or maybe a Great Recession, you know, on 9/11. This, in addition to that, has this mind shift of this journey shift, which are like confusing people, and these power shifts.
You've never seen a power shift. That's one of the things that most senior people, like, you know, now that I'm a pathetically unemployed person, I get to go into boardrooms and basically say, "Hey, listen, your people, you're amazing, I mean all of you, but you like talking to each other in your life. You lost the plot. Nobody wants to be like you, except you."
This is such an interesting topic because you can see it all over, which is it's also uncontainable. You don't know when it starts or stops, and it's amorphous, and it feeds on itself.
It definitely does, and it's one of the reasons why this, you know, I write the Sunday Substack thought letter. This Sunday, I wrote a poem. It was like the Lamentations of the modern manager because this is what I hear from everybody, like the CMOs and people who are like me, which is like, "What the shit's happening?"
Yes, next week I'm waiting for a limerick from you because I did.
So, all right, so we have all this shifting. We have everything up in the air. It is really hard even to see it, much less contain it or fix it. So, you have to ride the wave.
So now, throw the marketers and the ad agencies into that equation. What do you see for them? What should they be doing?
So, yeah, I believe that marketers and marketing are going to get more important in the future than they already are, and it's already very important.
And that is because all these technology shifts have given power to what we call the consumer, or what I call people.
In the old days, I would read a book by Philip Kotler, the famous professor from Northwestern, and he basically said marketing is about understanding and meeting customer requirements.
Or today, understanding and meeting people's requirements.
You know, the first 20 years when I worked for some of the best companies in the world, I realized that they didn't have to meet requirements. You could get growth just by basically manufacturing and distributing at scale.
Right?
But now you have to actually compete when the people who we call consumers or people have got like power because of technology, because of everything else.
And as a result, marketing is more important because customers have become more powerful. That's number one.
Number two, marketing is one of those few places which is left brain and right brain. There's a data part of it, and there's a storytelling part of it.
Yeah, right?
And in the modern age of AI, etc., the storytelling part and the data part, you have to combine.
And right now, the good news is I tried to get the machine to write the same poem that I could. It couldn't write the same quality of a poem. No one could write that kind of poem.
Right?
And so what basically happens is my thing was like, okay, that's because I've learned certain things over the years, and a lot of those are like emotion and intuition and empathy and things like that.
So, I think marketers should recognize that they are future-proofed in some ways as long as they keep doing certain things, which I encourage.
You just keep learning new things and, you know, building a case for the opposite of what you think is true so you can stretch your mind.
So, I think marketers are well-suited, but they have to sort of rethink a lot of things, and that is what the smart ones are doing.
So, I'm very bullish about the future of marketing broadly, and in fact, I'm so bullish that my biggest concern is that there are not enough marketers in the boardroom.
All right, well, I think that's a very valid concern because there aren't very many marketers in the boardroom.
And therefore, I believe that one of the reasons you're seeing disaster after disaster happen in big brands, right, is because there are no marketers in the boardroom.
Now, in some cases, the CEO came from marketing, but those are very rare cases.
Very well, right?
And so increasingly, you know, I go to the boards and say, okay, you have the voice of technology, the CTO. You have the voice of money called the CFO. You sometimes have the voice of your employees, which is your head of talent.
Right?
You keep talking about how consumer-driven and people-driven you are, yeah, but you don't have the voice of the customer.
So why are you doing such BS to everybody? Everybody knows this is BS.
Hey, but let me drill down on this a little bit because I agree with you. I don't think there's enough marketers in the boardroom, and I also think a lot of times marketing is discounted by certain boards and certainly in some of the investment communities.
And with the rise of performance marketing and the rise of measurements, it's harder and still harder than ever to talk about the value of the brand. It doesn't show up really on the balance sheet.
So, the storytelling thing—talk about that side of the equation here.
You know, my first book, the reason it was popular and continues to sell a lot, I in fact did a presentation in February at the beginning of February for Walmart and at the end of February for P&G built around my book, which is three years out.
Right?
And the old stuff is everything you say makes so much sense even three years later.
And the book basically says that the future of everything is a combination of the spreadsheet and the story.
Okay?
So, I don't go in and basically say it's all about brand building and not about performance. I don't think it's an either/or; it's an and.
And there are three reasons I give boards a different way to look at things.
So, let me give you one. What is the board very interested in? Their number one goal, though I don't think it's a fantastic purpose to have, but it is their number one goal, is increased value of the company.
Right?
How do I increase the market cap of my company?
Right?
So, I basically say, let's talk about the companies which have the biggest market cap, whether it be an Apple or a Louis Vuitton or a Tennessee or, you know, which is the biggest market cap in Europe.
Right?
And I said, do you think they differentiate on price, or do you think they differentiate on design, storytelling, logistics, and provenance?
Okay?
So, I said that, or Disney, the most valuable companies, right, use logistics and infrastructure as an input, but that's not how they differentiate themselves. They just don't.
Okay?
And by the way, most of the logistics of Apple are Foxconn and Samsung.
Oh, yeah, absolutely.
Things like that.
So, that's number one.
So, number two is, all of you in the boardroom, how many of you all wear a watch? You're wasting your money because your phone has a watch.
How many of you will drive a car that's better than a Toyota Camry? All of you, you're wasting your money.
Exactly right!
So, in effect, you are making this decision after decision which is not data-driven, and you basically believe that data-driven decisions is what drives results, which is total and complete and utter nonsense.
The third is, most performance marketing is a rigged game, which basically has Facebook and Google and Amazon taking all your margin.
You're sitting against other people for margin, so in effect, you are being fooled, deluded, and driving—and look at what? Look at their market cap.
So, give me a light.
And by the way, if you think it's all about math, AI is coming after your job. Get out there!
I so agree with this, but then to compound this problem, having been on some boards and in front of a lot of boards, people will say, "Well, look at Google and Facebook. They don't even do any storytelling."
And I'm like, that's because the marketers are giving them all their money, and they actually do storytelling.
So, I'll give you a very interesting fact. I've worked with those companies recently, and Google has done research that has basically shown—and this is Google research on Google advertising—that 60% of the effectiveness of all their marketing is based on the message, and 40% of it is based on targeting and optimization.
No kidding!
So, over half is based—everywhere you see that, you see it everywhere.
The problem has been that advertising and marketing technology has first been optimized for the plumbing. It has not been optimized to measure the poetry.
But now, there are a whole bunch of companies that are measuring the poetry, which is my quote.
We've optimized the plumbing, right?
So, the whole idea is, yeah, the future is about the plumbing and the poetry.
Okay, you got—you can stand another guy. Remember, I had an advanced degree in math, a degree in finance, and I've led some of the digital.
So, my whole stuff is, hey, listen, clowns, I believe in this nonsense, but it's essential but not sufficient to win with that because almost all of that, like when someone says, "I got amazing data," I said, unless you're Apple or Amazon or Uber or a few other places, you don't have amazing data.
Whatever data you have, I can go buy the same stupid data. Give me a break!
Most of these people don't even understand their own business, right?
And they hide behind all these terms: data lake, disruption platform. I said, speak to me in English, boys and girls. What are you talking about?
Okay, this is going to be, I'm just going out on a limb already, a red-hot show when it hits.
So, all right, we've established that, and I totally agree with you.
And I think it has been, you know, I actually think, but I'm on the other side of it, why I think marketing is more important than ever.
I actually think a lot of businesses are de-emphasizing marketing, particularly now that the free money era is open, and that's going to cost them.
Oh, it is definitely going to cost them.
And, you know, here's a very simple, you know, and by the way, marketing is lots of different ways of doing marketing, which is what I also explained, right?
So, it's not like I'm going and saying, like, cut everything. I put a got a mad on the Super Bowl. That's the one I'm talking about.
Okay, I agree.
So, I'll give you an idea. Like, I have, quote-unquote, because I am an unemployed person, I have a marketing budget of zero.
Yeah, okay, on paper.
However, if you look at the way I allocate my time, I probably spend the equivalent of six to eight hours a week.
So, let's say 20% of my—if I were working, 20% of my time, which means 20% of my budget on marketing.
Okay?
Even though I'm supposed to have a marketing budget of zero, I spend 20% of mine like this show, for example.
Wait, what is like the show?
But as importantly, it's my Sunday Substack, which goes to 30,000 people.
Right?
Including people like you, CMOs, etc., who hire me to speak and advise.
So, that's a marketing channel, right?
I have my podcast. I appear in other people's podcasts. All of that, and my podcast is subsidized by somebody else, which is my good place to work.
But all of that is marketing.
And so, my whole step is think about the fact that what you want to try to do, you want to build a brand. You want to get people to like you. You want to build relevance and likability.
You want to benefit.
And so, I'm not—I don't equate marketing and advertising as the same thing.
I think advertising is a very important part.
I agree with this.
Advertising is one sliver, one sliver of it.
So, you can have a zero—I have a zero-dollar advertising budget, right?
I have a significant marketing budget when it's allocation of my time, not—I don't have a dollar-like allocation of my time.
And so, my whole step is that's the thing.
Also, what tends to happen is it's really, really—listen, very—one of the things that we have failed, I think, both senior marketers and agencies, is we have failed to basically convince our leaders about how good we are.
Because at times, I think we've stopped being that good.
Okay?
And my basic belief is too many people have stopped investing in their own learning, in investing in their own teams, investing in building their own skills.
Right?
So often, what people say is marketing is the way I did it six years ago or ten years ago.
No, marketing is still important, but you can't do marketing like you did 10 years ago or 15 years ago.
Yeah, it evolves.
It's evolving at lightspeed, but you have to learn, and you have to be very comfortable.
Right?
It's one of those key things, and that is like really the challenge that we have to sort of think about.
So, I think that is an interesting point, and by definition, you've answered one of the questions I was going to ask, which is CMOs should always be learning and testing at the frontier of new.
They definitely need to do.
And by the way, they need to also learn themselves.
So, one of the things I tell everybody who's senior is to allocate one hour on their calendar every day to learn.
Yes, I used to always have.
Okay?
And I said, look, you're the boss, right?
So, you know, she or he can set an hour aside and learn.
And you can learn about anything. You can learn about AI, and I said you can learn it on Google. You can do it on YouTube. You can now go have a conversation and fall in love with GPT-4, whatever you want to do.
Yeah, look, and you can go learn other functions too, which help your job integrate.
So, you're speaking about the future and learning on the edge. You stated, and I couldn't help but read this in one of your postings, "The future will come from the slime."
Now, what does that mean, and how should our listeners get the most out of the slime?
All right, so the light in its entirety is the future will come from the slime and not the heavens.
Okay?
And so this is the key thing.
So, I truly believe that I've made many, many mistakes. I probably make 10 mistakes a day, but in my business career, when someone says, "How many mistakes did you make?" I said, "Very big ones."
I've made, but the one that didn't cost us much, but it cost a little bit, was I missed something.
And what did I miss?
As someone who was early and could get, you know, publicist early into lots of things, including recently all the recent stuff they've done, was I miss search.
Right?
So, on search, we were not leading, and so I tried to pay attention as to what—so my whole stuff is I quickly figured out I missed it.
I went to management and said, "I missed something. Here's how we can fix it," and we fixed it.
Right?
So, we went and bought performance from Google, and that was that.
Okay?
But we were used to grow things ourselves, and I said, "It's too late, and I missed it."
Why did I miss it?
I missed it because of two reasons.
One is us paying too much attention to my clients.
And where did search come from?
All of search's clients came from people who could not afford to advertise.
This is a really good story.
Yeah, it was for people who could not afford to advertise.
So, what basically happened? My client never talked about search, so I never thought about search.
Search was basically done by people who either had no money or were advertising in classified advertising or other kinds of places, Craigslist, etc.
My clients were not, you know, the PNGs and McDonald's. They were not.
So, I missed it.
That was one part.
But then I thought, okay, I missed it. I fixed it.
But am I as stupid as I look?
And I discovered, yes, I'm even more stupider than I look.
But there are lots of other people in the stupid club, and here are some examples.
Every automobile company looked at every automobile company. They benchmark against automobile companies, and all the wealth creation was created by three companies.
By two companies that asked me questions which no senior person could ever ask in a boardroom at an automobile company.
What were the three questions?
Question number one is, is the future of automobiles electric or internal combustion?
Question number two is, is the future of automobiles software versus hardware?
Remember, everybody in the boardroom are engineers who've been brought up with hardware and internal combustion engines and some finance people, right?
You have a three-question.
Is the future about selling cars or providing mobility?
So, that was the first two asked by Tesla.
The third one was asked by Uber.
Right?
Similarly, P&G and Shick kept looking at each other, adding more blades, making becoming so expensive they couldn't—you have to feel like a shoplifter to buy their products.
Well, a lot of times they lock them up.
Yeah, you got to get it basically unlocked.
But guess what?
They had basically had amazing manufacturing, fantastic blades.
They had locked up distribution at CVS, Walmart, all these particular places.
They had all the television airwaves, right?
And they were cool.
911, I mean, 2008, 2009 comes.
There's a recession.
Second connected age happens with increase of brand and social, and Dollar Shave Club and Harry's basically uses YouTube, one-dollar price and subscription, and takes away 17 share points, which makes perfect sense because who needs a sixth blade?
Did IBM see Microsoft coming from MS-DOS?
Did Microsoft see Google coming from search?
Right?
So, I always tell marketers, you're benchmarking against your existing competitors, and being less pathetic than your existing competitors is not a strategy for success.
So, this goes back to the boardroom discussion, though, I think, because if you don't have the right provocateurs on the board, right, you will—and if you have a culture that won't let the question live, the one, the question doesn't live, and two, even if it lives, it never gets asked.
So, how do you solve for that?
So, the way you solve for that, the two-way software is for people who want a solution.
There's the paid solution and the free solution.
The paid solution is buy my book and read this particular chapter.
No, listen, listen to this podcast, right?
The free solution is read this particular post of mine among my many posts, and the post title and the book title is the same, but the post is obviously a shorter version.
It's called "The Turd on the Table."
Okay?
It's the chapter that's most favored among one of my two ex-bosses, Jack Clues, and probably among Maurice.
And basically what it is, is I said everybody sits around the table. There's something brown and moist in the middle of the table.
Everybody pretends it's a brownie, but we all know it's a piece of shit, but nobody calls it out.
Okay?
And I said that's the beginning of the end of a company.
That's how Wells Fargo opens fake accounts.
Boeing sells bad software.
All the people who talk about innovation, but if you can't call out the turd on the table, no one's going to be calling out about innovation.
Right?
And I said, how do you build a culture where people can call out the turd on the table without being fired?
And that is a lot of what marketing and other leadership need to do.
Well, you know what I mean?
A lot of people know the turd is there, but the company has built a culture around not calling it out and punishing those that do.
And so, guess what? It's happening.
And the reason why that is very versatile, and that I'm seeing showing in my second book, and you see some of it in my writing, I don't get too extreme about it because I did work for a hundred-thousand-person company.
So, I don't want to basically say the large companies are not great, which they are, and most of the people I still work for are very large companies.
But the adva—here's what happens.
In addition to the fact that 66% of Gen Z have a side hustle or side gig, yeah, 76% of them want to work for themselves.
Okay?
And the most talented people, like you and I, had to stay because we were pretty pathetic, but the talented people leave.
So, my whole stuff is, guess what? Not only will you have a culture that you aren't talking about the turd on the table, but everybody around the table are all the turds.
All the good people have already left.
So, when I do the description for the show, I know that turd on the table will make it into my...
Yeah, and basically my whole stuff is like, cared—like, in fact, one of the big things that I do now is I go in, and they said, like, obviously, I'm respectful, and I don't say anything's, you know—
Oh, yeah, I sense that.
Right?
I do it with great—I first, almost everything I do makes fun of me first.
So, they say, okay, the guy himself is a flaming turd, but then I talk more about other things.
Okay?
But the reality of it is that so much of the problems and challenges now inside a company is that companies are not led correctly.
Right?
I agree with this.
Okay?
And there's a leadership challenge, and leadership doesn't mean it's a boss.
Everybody can be a leader.
So, I'm talking a lot about how to be leaders today, right?
Or even when people talk about culture.
So, I said, like, explain—let me tell you what I've studied.
Cultures is not hanging around in the office.
Culture is not going to a spa.
Okay?
That's not culture, right?
Culture of four things, and a couple of them we don't talk about.
We only talk about one or two.
Okay?
The first one, which we don't talk about, is you can't have a great culture unless you have a quest for excellence.
Okay?
So, unless you have excellent products, excellent services, excellent results, excellent people, that's not a great culture.
You can't do that without excellence.
So, let's talk about excellence first.
The second thing you want is a growth mindset, which is constantly learning.
The third one is you want collaboration.
People talk about that.
And the fourth is you want communication, and people don't talk about that, which is calling out the turd on the table.
So, for most people, culture is a highly collaborative place where people like each other.
That's kind of important, but by the way, that's a country club.
It doesn't stop the plane from smashing into the mountain.
It doesn't mean anything.
So, I said, where's the growth?
So, I think this is—we're almost out of time, so I want to—you know, we might have to have you back because we might have to have a follow-up on the turd on the table thing if you—
We'll come back, absolutely.
And I think so, as a last question, you've already talked about the fun you missing search, but any practical advice for our listeners that we haven't discussed yet that you would leave everybody with as we run to the end of the show?
Yeah, I would basically say these are the three practical pieces of advice in addition to spending an hour every day learning.
Right?
Once in a while, not all the time, spend time to build a case for the exact opposite of what you are recommending or what you believe.
Yeah, right?
It's like the team A, team B, rare team blue team, but do it for yourself because the reason that's very important for a lot of the people listening to this who are very senior managers, CMOs, you know, CFOs, etc., is nobody really tells you exactly what they're feeling because you control budgets and jobs.
Yeah.
So, they make you feel that you always know what you're talking about, and you start to believe that your flatulence smells like Chanel No. 5.
Okay?
So, that's the reason why you want to build a case for the exact opposite.
The third is, once in a while, build things, create things, make things.
Use your hands or your feet or your mind versus just processing and managing.
That's the reason I started a Substack.
That's what I'm like learning AI because, in effect, the people who are reporting to you want people—want to be builders, creators, makers.
They want you to—so you need to do that.
And the last, which is very, very important for senior management, is learn from George Saunders, which is err in the direction of kindness, which is sometimes be kind to yourself and don't self-lagulate so much.
All right, well, I think that is a great finish to the show.
I'm thinking Chanel No. 5, turd on the table, so many great quotes.
I can't wait to write the descriptor for this show.
So, thank you, Rashad, and thank you, everyone, for listening to CMO Confidential.
Look for more of our shows on Evergreen, Spotify, Apple Podcasts, and YouTube, which include "What Event Your Capital Really Thinks About Marketing," "The Case for Simplicity," "Decomplexifying Your Marketing," "What I Learned as New York City's First Ever CMO Under Michael Bloomberg," and "A Top Executive Recruiter Talks About the CMO Space."
Hey, all you marketers, be safe out there.
This is Mike Linton signing off for CMO Confidential.
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