Marketing is a culture, not a department

Welcome to the match. I’m Robin and today I’m joined by Ross Hastings, CEO and co-founder of Ne-Lo, a repositioning consultancy that helps companies to reposition themselves for growth. Ross comes at marketing from an unusual angle. His background is in organizational psychology and he and his co-founder Kieran built the anatomy of marketing, a model for how marketing actually works across a whole business, not just one department. He’s also writing a book with a title that I love, “Don’t mention the M-word”. So, today we’re getting into a provocative idea that marketing is a culture, not a department, and why he thinks that’s at the root of some of the biggest problems in modern business. Ross, welcome to the match.

Thanks for having me.

So tell us a bit about Ne-Lo. What does a repositioning consultancy actually do?

Well, it’s interesting. We didn’t set out from day one saying we are a repositioning consultancy. It’s taken different shapes and forms along the way, but ultimately what we realized in the seven years that we’ve been running Ne-Lo is that most of the problems that our clients come to us with in one way, shape or form are about repositioning the way they appear in the market. So that can sometimes be about developing a new product or integrating a new acquisition or developing a new proposition, or it can be: hang on, the market doesn’t think of us the way we think about ourselves. So how can we bridge that gap? So that’s obviously more about campaigns, creative ideas and things like that, but it’s usually about bridging some sort of gap between what the company is or is becoming and what the market perceives them to be.

Got it. And you come from maybe an unusual background for a marketer. You’re from an organizational psychology background. How does that inform how you think about the work that you do?

Well, it’s interesting. I actually came through what I would now describe as a marketing background, but I never would have seen it that way at the time. I studied psychology undergrad and then I went overseas to Canada to work as a ski instructor — originally for a year, but a year turned into more than a year. I ultimately ended up running a pretty interesting ski school over there, which was specifically designed to take destination tourists on a 3-day guided lesson through three resorts in Banff, Canada. This was actually a joint venture between three resorts called Ski Big 3, all about showcasing Banff as an entire destination. I ran the ski school for that — which was inherently about bringing people in, showing them the best of the three ski resorts, taking them out for dinner, showing them the best restaurants, making them have the time of their life just like locals would.

Now I would very much describe that as marketing — showcasing the product itself. But what got really interesting toward the end was a project where we tried to put value around this physical lift ticket. We built partnerships with local businesses so that visitors could experience what locals experience — Monday nights at the best burger in town, Tuesday nights somewhere else. It created this sense of togetherness for everyone who visited the resort.

What I found really interesting was how the culture of the team and of the town became the other side of the brand experience. The culture and togetherness and alignment that you’re building in the people delivering the experience is basically what creates the brand experience. That led me to study a masters in coaching psychology and positive psychology — with a particular leaning toward how you align executive teams in a way that allows an aligned customer experience at the other end.

Then in 2017 I happened to bump into Kieran Antill in a gym. He’d been at Leo Burnett in New York and was running JWT in Melbourne, and he was feeling a real separation from the actual intent and strategy and culture of the organizations he was working with. We’d been working on two halves of the same problem. So that’s really always what Ne-Lo’s been about: how do we build that strategic focus, that alignment, that culture internally that allows the brand to be perceived as the company wants it to be externally?

Got it. And that word culture that you mentioned a few times there — you talk a lot about marketing as a culture, not a department. Say more about what you mean by that.

So I think it’s probably a fairly well-known phenomenon in modern business. What we mean by culture not a department is that most people would accept that a brand — or the perception of a business — is made up of lots of touch points, some of which are determined by decisions made in the marketing department, but arguably the majority of which are made up of decisions that happen outside of the marketing department.

So you might describe that whole thing as marketing. Even if you keep it as simple as the four Ps — product is usually in a product department, price in large organizations is often determined by analytics or finance teams, place is ginormous these days with retail and e-commerce. And often what’s left in the marketing department is promotions. For us, marketing culture means being able to make coordinated, aligned decisions across that entire mix, regardless of department, that end up in a seamless integrated brand experience.

Understood. That makes a lot of sense. Marketing isn’t confined to a particular department. But it does typically have a leadership figure with “marketing” in their title — and that leader, the CMO, typically has one of the shortest tenures in the C-suite. Why do you think that is?

Well, this is the interesting thing. There is this culture, this function, this mix called marketing that spans an organization and arguably adds up to what most businesses want — which is growth. Yet rather unhelpfully, we still have a department also called marketing with somebody in an executive role that has the title of marketing. And if we buy into what I’ve just said, they don’t control everything that goes into a growth target.

So I think there are a couple of things that lead to CMOs having amongst the shortest tenures. One is that they’re often held accountable to a target that they don’t control all the levers for — somewhat of a poison chalice. But also they tend to be brought in with short-term remits, or at least pressed on a month-to-month or quarterly basis on much more short-term questions: why are leads dropping off, what does pipeline look like?

There’s this ongoing discussion in marketing science around “the long and the short of it” — long-term brand building leads to better long-term growth, while short-term sales activation leads to a jagged line that never actually goes up over time. But even that long-term brand building argument only stands if you’re genuinely building the entire brand — it’s not a promotions argument. So again, we run into this systemic problem: are we talking about all the levers, or just promotions?

And CMO or head of marketing job descriptions are among the most ambiguous there are. That is the manifestation of that confusion.

And commonly there are misunderstandings around what that leader or function actually has responsibility for — they’re brought in and then just kept being blamed for not delivering magical growth.

Exactly. That’s not a setup for success.

So what’s the solution? What’s the answer to changing that problem?

It might be worth saying what’s not the solution first, because there are things I see as the system trying to correct itself — things like the chief growth officer, chief customer officer, chief commercial officer. That’s the system trying to relabel a bit of itself to fix the problem. And mostly we’ve seen that doesn’t work, because it’s just a different label on the same systemic problem. If you don’t tighten the job description and change the dynamic, it won’t change the system.

On the other end of the scale, we see companies with “customer-centric culture” as one of their strategic pillars. But if you don’t have a way of actually breaking down the silos and the vertical management system, how are you hoping to achieve that?

What we’re talking about is a horizontal practice or function in marketing, yet modern businesses have a vertical management system. And that vertical management system — in place for the last 100 years or so — is really good at extracting value out of a business model, but not particularly good at value creation. That’s why we see startups identify a need, scale, with all hands on deck, very customer-focused. But at some point most businesses go, “Okay, now we need to industrialize,” and they put these verticals in place — which creates the problem we’re talking about.

So how do you solve it? First, it’s almost an impossible task unless you have CEO buy-in. We’re talking about a horizontal function — the only person that can actually orchestrate the levers across that function from a managerial perspective is the CEO. We call them the de facto chief brand officer. They need to be advocating for collaboration across those levers.

Then you need a common language to collaborate across the silos. This is what we call the common language paradox. Each silo has its own high-performing shortcut language — and they need that. But when two teams need to work with each other, they run into the issue of not speaking the same language. Even when they use the same words — strategy, value proposition, target audience — they might mean completely different things. And then some languages are genuinely different. So you need a universal language that allows those teams to have a conversation using the same terms and actually meaning the same things.

The third piece is a way for it to fit into the cadence of the organization. Once you’ve got this universal language, not everybody suddenly spends all their time collaborating. They need to be able to take those decisions and apply them in their expert verticals, while the cadence of the organization ladders up to those collaborative conversations.

And where does the anatomy of marketing that you’ve developed fit into all of this? What role does that play?

The anatomy of marketing is designed as that universal language. We recognized the common language problem quite early in Ne-Lo — it was showing up in the work we were brought in to deliver. So we developed the anatomy, deliberately leaning on the analogy of the human anatomy: something that everybody fundamentally understands, and also happens to be a connected system. That analogy is useful — someone understands why working on the heart matters for the limbs.

So what is marketing? Marketing is six bits of the human anatomy. It has a brain (company strategy), a heart (brand strategy), a skeletal system (brand expression and design systems), a face (execution across the four Ps — the only bit the customer sees), a sensory system (data and insights feeding back all the time), and blood flow (investment of capital, time, and energy). At the top level it allows an organization — ideally led by the CEO — to say, “This is what we mean by marketing,” and to use it to diagnose: where are our gaps, what do we need to work on, where does this decision sit?

Then it has layers below that where you break out the fundamentals of what sits underneath each element. And at the bottom level it connects to best-in-class frameworks and methodologies — so if you’ve identified you need to work on your heart, specifically your value proposition, here’s the value proposition canvas. This means you can go and engage broadly across multiple stakeholders and have an agreed way to bring that all together to a focused, insightful decision.

Let’s talk about repositioning. You’ve talked about organizational entry points — moments when a company can actually drive this kind of cross-functional change. What do you mean by that?

If there are any marketers listening, you’ll be familiar with the idea of category entry points — moments where we know our customer is going to be receptive to a message from us. We find there are similar moments in organizations: moments where you can break out of the malaise of BAU and actually introduce new thinking.

One is new leadership — often best if it’s a new CEO who wants to come in and have a way of actually understanding and organizing the whole. Another is annual planning — the cadence where the organization all of a sudden stops and says, “Let’s reflect and think ahead.” That’s also generally when organizations bring in external support around strategy. A third is crisis — often when everything is on fire, it’s literally the burning platform for change. Organizations are very open to anything that might help them move away from that. And the fourth is repositioning itself — if there’s a noticeable gap between what the company is and how the market perceives it, there’s often a receptiveness to new thinking, particularly if the way to close the gap isn’t evident.

And let’s just go a bit deeper on repositioning for a second. How do you think about when repositioning is warranted versus when it’s not the answer?

Repositioning happens a lot because of boredom — this idea of wear-out. You’re so much more familiar as an organization with the stuff you do than the market is. I think sometimes you get bored of your own stuff before they do. And we see time and time again that the companies that are super disciplined with their broad definition of marketing — Coca-Cola, Specsavers — are disciplined with this idea and they do some amazing different things with it, but they’re disciplined in their pursuit of building that brand.

Or you get new leadership with more of an ego-driven desire to make their mark — you change the kerning on the logo or add a new tagline. And it’s like: what was the intent of all of that?

Whereas we argue there is only one reason to reposition: there is an evident, objective gap between what the company is or is becoming and what the market perceives it as. And the only reason to reposition is that that gap has become costly. You’re losing market share, growth is slowing, your cost to serve is increasing — it’s become costly in some way, or there are early signs of it and you’re getting ahead of that deliberately. That’s the only reason.

There are a number of forces that can create or maintain or grow that gap — let’s keep going.

So that gap can be created from both sides. One is that the organization itself has materially changed. We see this a lot with private equity — buy an asset, acquire a bunch of related assets, and suddenly the organization has materially changed. Usually the market still perceives one bit of what you bought. So there’s work to be done to change the perception of your now bigger, broader market — in other words, why does that acquisition journey make any sense to the market, as opposed to being an internal ego or customer database play?

Or it could be a new product that materially changes what you’re all about. Canva would be a good recent example — massive investment in AI changes the proposition materially. Part of that is educating customers and potential customers around what you now are as a result of this internal innovation.

Then the market side can change too: new competition, new competitors, new expectations from prevailing change. Most consumers of tech now expect some sort of AI enablement. New competitors change who you’re compared against. The examples are massive — Uber to taxi companies, Airbnb to hotel companies. It can happen at quite a profound scale, or it can just be that your market is lucrative and startups are trying to grab a piece of the pie.

Coming full circle back to what we were talking about earlier — marketing is a culture, not a department. If you’re going to effectively reposition a business, it is a whole-of-organization thing. It’s not something that just happens in the marketing function.

Exactly. And so there are two ways that Ne-Lo often helps our clients, and we break our services up into what we call organize and amplify. Organize is: you’ve identified there’s a gap, or you think there is one, and you want to verify and validate it through research. Or you can see it in business performance — so you need to figure out what’s causing the gap and how to resolve it. And that’s where we come in.

Another way to think about the marketing mix: if brand is the perception of your business — what your target audience thinks, feels, and says about your business when you’re not in the room — you can’t control that directly. You can be clear on what you want it to be. But marketing is all the levers you can pull, all the decisions you can make, all the resources you can deploy to try and achieve that feeling in a target audience’s head. A good repositioning effort identifies what we want that feeling to be, what we think it currently is, and then what levers we can pull across the entire organization to close that gap.

It might be a new way of getting the product to the customer. It might be the product itself. It might be a new way of communicating it. It might be cutting out some of the fluff in the process of owning the customer relationship. The best repositioning starts there — understand the nature of the gap, then think broadly across the organization about what levers you have available, and decide which ones you’re going to pull in what order. That’s all what we describe as organize.

Amplify is: we’ve decided we need a new brand, or a new campaign, or a new value proposition. Can you come in and help us do that in a really creative, strategic, highly effective way? Great. Sometimes that organization has already done all the organizing, or they’ve done it another way — and that’s fine too.

Well, let’s talk about practical starting points. For the marketing leader who’s come into an organization — or maybe they’ve been there for a while but had the realization that to be effective, marketing needs to be a culture, not just a department — what would you say to them in terms of how they get started?

Let’s say CMO in a large organization. The first thing I would suggest is get CEO buy-in. I know there’s a lot of narrative around senior marketers needing to talk finance more — I find some of that kind of adversarial. I think ultimately it starts with getting a clear, in-depth idea of what the managerial mandate is. What type of growth, over what time horizon? I would hope a senior marketer in a new role would have found that out before taking the role, because there are certain scenarios where you just stop there — if you’re hearing “it’s just year-on-year cost cutting, do more with less” that’s very hard to work with.

Then understand where the marketing levers actually sit in your particular organization. If it’s a tech company, there’ll be a product department. If it’s a retail company, retail is a huge component. Take this vision of marketing as levers across an organization and show the CEO that this is the key to success in the growth story.

Now what’s hard for someone in the CMO seat is that it requires a large dose of getting the ego out of the way. It can’t be: “Marketing is in my title, so I should have more control over all these marketing levers.” You’ve got highly specialized expert people running their bit of the mix, and they need to be bought into the overall approach. It needs to be more a case of: “I’m not trying to control all of this. I want to be the catalyst for the whole to work better together. And I accept that I only really control the promotions bit of the mix.”

If you get as far as the CEO and your exec peers saying yes, then one effective way is a universal, common language — something like the anatomy of marketing (which is available on an open-source wiki — free to grab and use) — so everyone can diagnose, plan, and act as one.

Then the other piece is decision rights. There’s a really great model called DARE, developed by McKinsey — Deciders (ultimately on the hook for the decision), Advisers (who can offer perspective but don’t have veto rights), Recommenders (who bring data, insights, voice of the customer), and Executors (stakeholders who need to be kept informed). The kind of utopia is: CEO and executive buy-in, the right language as a map for the journey, and the right decision rights for each initiative. When done well, that unlocks really effective collaboration.

A striking example: we worked with a fintech company where we got brought in by the head of product to do a customer research project. He wanted psychographic personas, not just demographic ones. But to his credit, he said: “This would be a massive missed opportunity if we didn’t bring the rest of the organization along.” So we brought the CEO into the mix, and what started as a customer research project became a company strategy project that became a rebrand and a brand launch campaign.

What was interesting was when we got to the actual growth marketing problem: the marketing department was flying — cost of acquisition was down, more customers than ever were registering. But being a financial product, registering meant going into onboarding and KYC. And their revenue model was based on activity, so if you registered but didn’t deposit and act in the platform, there was no money. So we had 60% churn at onboarding. More and more money being poured into sending customers to a leaky funnel. If you look at that in isolation, it makes sense: marketing’s ROI is strong, keep investing. But you zoom out and it makes absolutely no sense whatsoever.

By taking a companywide approach, we were able to say: let’s dial down this activity for a little while, collaborate and work together on the onboarding flow, figure out what the problem is, then redeploy that budget back to dial up the marketing. It’s an example of how much more effective you can be if you don’t make the case for budget and ROI by vertical, but zoom out and see all those levers in one view.

Fantastic. That’s great, Ross. Bringing this conversation to a close — I wanted to make sure we touched on the book, “Don’t mention the M-word”, which is coming soon. What’s the one big idea that you want to get across?

If you’ll indulge me, there’s a couple of answers. The subtitle is probably the big thing: “Don’t Mention the M-Word — Why the top companies make marketing everyone’s business, and how you can too.”

The number one takeaway I want readers to have is everything we’ve talked about today in a nutshell, in a very practical and pragmatic way — so that leaders leave with a clear idea of how they can start to drive a companywide approach in their organization. It’s written primarily for CEOs and board directors. But if any exec picks it up, it’s relevant to them too. For the reasons we’ve discussed, it’s an easier journey if you’re a founder or CEO reading the book because the first step is taken care of.

The book is in three parts: the problem with marketing as we know it and the need for the anatomy of marketing; the anatomy of marketing itself; and how to actually act on it and get the most out of it.

And more broadly, our bigger purpose and vision is to see a paradigm shift in the way marketing is done in the world. Our lofty ambition is for it to do for marketing what Grey’s Anatomy did for the medical sciences — now on its 43rd edition, with the community applying it across all disciplines and contributing to its growth and relevance. As a consumer of healthcare, it doesn’t matter whether it’s a surgeon or a physio or a naturopath — they might fundamentally disagree on how to treat something, but they don’t disagree that your arm connects to your body via your shoulder joint. Nobody’s going to debate that. We want to see marketing debate stop being about the fundamentals and instead focus on what we’re going to do — clearly and without confusion.

So Ross, there’s a lot of discussion in marketing circles about how the CMO should have more or fuller ownership across all of the four Ps as a solution to marketing being more effective. What would you say in response to that line of thinking?

Yeah, it’s very interesting. We’ve talked about the marketing department (the vertical that exists in most organizations) and the marketing culture (the levers and decisions that sit across the entire organization). But I think there’s also a third piece: a marketing mindset — which is what we’re mostly talking about when we say we want the CMO to influence the four Ps more. I personally believe it’s dangerous to say we want them to have more control. But what I think we’re trying to say in that debate is: we want more marketing mindset, more marketing influence, in those decisions. We want the voice of the customer to be prevalent in decision-making. And if that’s the case, I absolutely agree. I would just push back on the need for that mindset to be held by a certain title or role.

Think through it carefully.

Yes. Always have the voice of the customer prevalent. And if we call that a marketing mindset I think that works. But be very careful about confining the ownership of a customer mindset or a marketing mindset to a department or a role, because we don’t want a bigger silo and we don’t want a land grab. What we want is collaboration. I’m all for putting the customer in the middle of all major marketing decisions.

Ross, you’ve brought a fantastic perspective to today’s conversation. Thank you so much. Really enjoyed it. Great to have you on The Match.

Thanks for having me.