Monday, August 1, 2011

Another marketing organization rip up and retry

How to organize marketing of B2B high tech products is always challenging. The best products rarely come from marketing people and the deeper the technology the more the R&D team is in the inventive role and driving marketing.

As a result, where to have marketing report is an ongoing political battle in many companies - and Cadence Design Systems marketing revolving door is a fresh example of this. According to the online gadfly DeepChip.com, editor John Cooley reports "Cadence CMO Bruggeman rumored ousted in unexpected palace coup", confirmed also by Gabe Moretti on his EDA blog because of the decision to put "product marketing within the three divisions responsible for product development. According to Pankaj [Mayor, chief of staff to the CEO], who will act as Head of Marketing in addition to his other role in the interim, this is the event that precipitated John's departure".

Product marketing belongs close to R&D, but as companies grow they often oscillate between a functional org chart (all R&D in one team, all marketing in another) and a BU org chart (all R&D and marketing for a business line working in one unit). Having been a part of this oscillation more than once in my tenure in marketing I have seen both sides. There are advantages and disadvantages both ways, but the deeper the technology the more important it is that R&D and product marketing work very closely together and so I favor marketing within the business unit.

The reason for this is that in very complex technology products R&D is leading the customer, not the other way around. The classical view that product marketing goes out and talks to customers, figures out what they need and then comes back and specifies a product for R&D to build is the road to a mediocre, losing product.

With breakout products customers don't know what they need. Sometimes they know the problems they are going to face, sometimes they can describe the performance, time-to-market or cost problems they are facing but they can rarely describe how to solve the problem.

Consider Salesforce. Did CRM users know they needed a cloud based product they could easily configure themselves? No, when Salesforce was emerging customers were asking for more and more features on their Seibel systems. And yet Salesforce dramatically reduced the cost of deployment and support of CRM systems.

Consider Synopsys. Did logic designers know they needed to radically change the way they described chip logic by moving up to the RTL level instead of drawing gates? No, they asked for more and more features to draw gates faster within their Daisy or Mentor systems and yet the move to RTL based design dramatically changed the complexity of designs that were possible.

Centralized marketing makes sense for all the cross functional responsibilities. Communications needs to be one voice with common positioning and messaging. Third party business development - coordinating partnerships and industry initiatives - needs to present the company as one entity to partners. Market research and competitive intelligence is more cost effective and can serve the sales force with one set of tools and content (like FirstRain) if the intranet and intelligence are run centrally.

But product marketing needs to be close to R&D, sitting with R&D and not confused about their role. Design collaboration with R&D, interface specification, customer introduction, field training and support all need to be done working hand in glove with the R&D team that is pushing the envelope of the technology. Org charts should not, in theory, change behavior but they do.

Organizational change is also almost always good and keeps people on their toes - and shows you a lot about the organization. Holden powerbase selling methodology teaches sales people that change illuminates the power structure in an organization. Any time you see a reorg someone wins and someone loses. If you want to really understand where the power lies take note of which executives build a little bit of power every time. Subtle, continuous, increases are a sign of someone strategically building power.

It's true that product marketing has an important role to play. Much of the time the work to be done is incremental, and then it does not really matter where product marketing reports. But when you are building a product that has to leapfrog your competition and stay on the bleeding edge you are reliant on the R&D and conceptual brains to figure out the leap and product marketing needs to be part of the leaping team.

1 comment:

Meta Brown said...

Despite my great appreciation for clever technology, I don't see much real life evidence of customers jumping on technology just because it is good. For example, it may be true that customers didn't know they needed cloud-based technology that they could configure themselves, but I don't believe that they are paying for that. They are paying for a way to track sales activity without a pile of aggravation dealing with IT organizations, a need they certainly knew they had, and acknowledged for some time before salesforce.com (and other vendors) came along with SaaS offerings. A lot of good technology waits a long time (or forever) before the market acknowledges its value.

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