Transcript:
Tim Calkins:
Strategy ultimately is a bit of a balance. It's a balance between what we have to do in the short run to deliver the results, but also in the long run, to build the business for what's going to happen in the future.
It's a bit like Wayne Gretzky. As he always said, you know, he didn't skate to where the puck was he skated to where the puck was going to be. And I think that's the spirit of great strategy. It reflects the world as we know it today, but more than that, it reflects the world that's going to happen in the future and positions us for success in that space.
Melinda Spaulding:
Welcome back to another episode of Practical Marketing Skills, and the voice you just heard is our special guest today.
Mitch, you want to introduce our special guest? Tell us more about him.
Mitch Tull:
Yes, I'm excited about today. I'm always excited, but I'm extra excited about today, because it's my pleasure to introduce a friend. Someone I've collaborated with in the past, and I consider an expert and authority when it comes to marketing and strategic thinking, Tim Calkins.
Tim is the Clinical Professor of Marketing at Northwestern University's Kellogg School of Management. He teaches courses, including marketing strategy and biomedical marketing and is the co- academic director of the Kellogg on Branding Executive Education Program. So, I want to welcome Tim to the program today.
Tim:
Well, thank you. It is great to be here.
Mitch:
Now, most everyone knows you, Tim, due to your association with Kellogg. But what are a few other things that people might need to know about you outside of Kellogg.
Tim:
Well, I do a variety of things. You know most of my time is teaching at Kellogg, that's the bulk of what I do.
But on top of that, I work with lots of different companies on strategy issues and work sessions and talks and things like that. And then, along the way, I've written a number of different books over the years. I wrote a book on marketing plans, breakthrough marketing plans. I've got a book on Defensive Strategy, "Defending Your brand". I wrote a book on presenting, which has the very unusual title "How to Wash a Chicken", mastering the
business presentation. And then I was involved also in a couple of different books that we did at Kellogg. "Kellogg on Branding" and then the, the updated version of that, "Kellogg on Branding in a Hyper-Connected World".
So, I do a whole variety of things from the classroom to writing, to working with companies, to writing cases. Lots of different things, that all relate to strategy, and all relate to thinking about marketing in a strategic way.
Mitch:
And for our listeners, Tim just rattled off several books and so we will make sure that we provide a complete list of your books for our listeners in the pod notes.
Melinda:
Yeah, the Kellogg Book on Branding in a Hype-Connected World is actually on my desk at all times. There are several times on Zoom, calls where I hold it up, and I say this is from Chapter 13.
Mitch:
Tim, I don't think you mentioned it, but there's something else you do.
But you're actually an expert on Super Bowl advertising and you created the Kellogg Super Bowl Advertising Review. So, I know that's got to be fun evaluating and ranking all, those Super Bowl ads every year.
Tim:
Oh, yeah Mitch, that's a really fun event that we do every year. So, we've been doing it for a long time now. And every year, we look at and evaluate and study all the Super Bowl ads.
We pulled together a panel of our students at Kellogg. And it's really all about experiential learning. But we also come up with a perspective on Super Bowl ads. And what's different about our lens, is that we look at these things and we try to figure out which ones will really work from a business perspective. Which ones make strategic sense? Which ones are most likely to build the brand and build the business? You know, lots of people talk about which Super Bowl ad was the funniest, which was the most entertaining, and we don't really care about that. We're really trying to think about, will these things ultimately be successful at building the brand or are they good business investments?
So, that's a really, really fun event.
Melinda:
You may be wondering why we selected the title for today's episode. Because strategy is one of those terms like insights that we use in our day-to-day working roles in marketing. But when you actually have to think about how you would define it, sometimes people struggle a bit to come up with that clear, succinct definition. And, just to give you an example, Mitch and I googled the word strategy and got over a billion results. And you see things about planning, and goals, and frameworks, and shapes, and arrows, and all these PowerPoint templates. But let's get into reality.
What does strategy actually mean? And since we've got an expert with us, Tim, I'm going to
put you on the hot seat. How would you define the term strategy?
Tim:
Well, one of the things that happens with strategy, I think, is that people make it far too complicated. And as a result, the definitions we toss around, just clutter our thinking, and they lead to model marketing plans at the end of the day. When I think about strategy, I really go back to a single word, and that is choice. You know, you think about strategic marketing. Strategic marketing is all about making clear choices, about how we are going to move forward with our product or with our drug.
If we're going to launch a new product, it's the choices that we're making along the decision process. How exactly are we going to bring that drug to market? If we're managing an existing product, what are the choices that we're going to make this year about how we're going to build that?
So, when you think about strategic thinking, it's as simple as saying, "Well, what are the options we have, and what are we going to choose to do?" And that is the essence of strategic thinking.
Melinda:
And what you're not going to do? Right?
Tim:
Well, absolutely. What makes what makes strategy difficult; it's not coming up with the things you want to do, it's deciding what you're going to do and what you're not going to do. And that is the harder part, and you know, we're not going to do this. And then of course, somebody comes back and they always say, "Well, what do you mean you're not going to do that? You're leaving money on the table there. I can't believe that." But, if you're going to have strategic clarity, you've got to be really clear about what you're doing and what are the choices you're making. And why those are the right choices to be making at this point in time.
Mitch:
So let's talk a little bit about how strategy gets built, and the process for developing strategy. You know strategy making is uncomfortable for people because it is about taking risks and facing the unknown. And then on top of that trying to make those choices, and, you know, all executives know that strategy is important. But some find it, they would, probably wouldn't admit it, but a little scary. Do you find this to be true?
Tim:
Strategy is really hard, and I think people struggle with it a lot. People get confused in the frameworks and, and all of that. The part though that is more difficult in strategy and the crux of it is that it really does come down to saying, we're going to do this, and we're not going to do that. And then it's the process of selling that recommendation and getting people on board. And explaining, you know, why this version, or this path forward, is the
optimal play relative to the other paths that are forward.
And so to be good at strategy, you have to really think it through. You gotta think about all the different aspects, and then you need, ultimately, to have the confidence that the recommendation you've come up with is indeed the best path forward for you know these particular reasons.
Mitch:
You know, I've heard you oftentimes speak of, in developing this process of strategy that there's layers to that. You want to speak about those layers?
Tim:
Well, the process of developing strategy, I think, you know it really starts in two places. One, it starts in understanding your objectives, understanding your goals. I think, great strategy builds out of that. What are we trying to achieve here? What really is the goal?
And you know that's important, because if you're trying to get 2% growth on a particular business, well, that's fundamentally different than if you're trying to get 30% growth, or 40% growth. So, the strategy process, you've got to start first with a really good sense about what are we trying to achieve?
The second step, though, is particularly important. The second step, you really think about, what are all the different things we could do. And that's a really important step in the process, because there's always multiple ways to approach a situation. There's multiple things you can do. And before you can pick the right strategy you've got to think broadly about, what are the options? What are the different things we could consider? What are the different things perhaps we could do this year? And then, once you have all the options laid out, you can pick which one is most likely to get you to your objective.
Once you have the overall strategy, then you get into the into the details, into some of the executional things. But you can't do all of that until you have a really good sense of what are you trying to achieve and of all the options that are out there, which way is the best overall path forward.
Mitch:
I've often heard you say to that there are a lot of beautiful strategies that have been written but cannot be actioned. And so, oftentimes, I think, whether it's strategic initiatives or imperatives, it's denoting, "How will we put that strategy into action?"
You know, in my experience, it's common for organizations in building strategies to focus almost entirely on the question of what we should do while leaving the actual why, and the how to be figured out later. And I think that's one of the common traps that I see teams fall into. Are there any other common traps that you see teams falling into Tim?
Tim:
Well Mitch, there's so many traps all through this whole process. You know, when you think about taking strategy, where strategy really gets traction is when you get into developing
the actual plan and plans can go awry in lots of different ways. But I think you've touched on a couple of the real pitfalls. One is, you know, a strategic imperative or strategic initiative can be a lovely thing. But it's only going to happen if there are tactics associated with it that really are credible and that are really going to get the job done. I mean, you might say, all right, fine, maybe the strategic initiative is going to be that we have to get a blank percent of physicians to try our product in the first year. That maybe is going to be one of your strategic imperatives, but you better be pairing that with some very tangible tactics to try to figure out how exactly you're going to make that happen. Because otherwise, it's just wishful thinking. The other piece though, is you've gotta connect the tactics then to the money. And, you know, that's another place where things often fall apart, where people say, oh, this will be great, you know, we're going to make this happen. This will be our great strategic imperative and here's all the tactics associated with it. Yeah, that's going to be terrific. And uh, oh by the way, there's no money. And that's not going to happen. I mean, there's no money, you won't be able to do that and now you've got this fictional plan.
You know ultimately, if a brand and a business is going to be successful, the whole thing has to work together, and there's got to be the resources and the tactics that will make all of this happen. But that's why it's so important to be clear on your strategy.
Mitch:
Now Tim, there have been many books published on the topic of strategy over the last 50 years. You wrote a book a few years ago called, "Defending Your Brand" which is the only one I'm aware of that addresses the use of defensive strategy. You know, most people don't like to discuss this topic in public, so what was the idea and the premise behind this book?
Tim:
Well, defensive strategy is, I think, the most important part of business. But you're exactly right, people really don't talk about it that much. So, the idea for the book came from my experiences back at Kraft Food. So I was at Kraft for over a decade, and managing brands there. And while I was at Kraft, one of the things that really struck me was that some of the most intense battles, and the most exciting things we worked on were these great defensive fights where someone's attacking your business, and you've got to figure out how do you respond to that? And what are you going to do in light of this changing market? And, it's an incredible world. It's fast moving. Its intense. It's really important.
But, the interesting thing is that people really don't talk about it very much.
You know, everybody talks about innovation, and growth, and mindfulness, and all of this, but how do you protect the business is really not a topic people talk about very much. So, I wrote the book in order to really develop that thinking, and to help people realize there's a whole world there, in the area of defense. But you've really got to focus on it and think about it and protect your brands.
Mitch:
One of the last chapters too that you had in the book was titled, A Cautionary Word about Competition Law. And I thought that was interesting to have that is the last chapter of the book. What was the reason for that?
Tim:
Well, I wanted to touch on some of the legal issues around defensive strategy. You know, I think some people, they don't talk about defensive strategy, because they get so worried about antitrust law, competition law. And that is a big complicated area and certainly, there are times when that is a factor, and we always want to operate in the bounds of the law. But one of the reasons you don't hear much about defensive strategy is, people get nervous about it and so they just don't talk about it very much. The reality is, the defensive strategy is totally fine. And in almost all cases, it is absolutely something you can do. Something that you should do. Now, if you have a monopoly or close to a monopoly, so right now, for example, Google is struggling with this. And they've got such a high market share that the regulators are looking at Google and saying, wow, that's looking a lot like a monopoly to me. In that world, you really do have to be particularly cautious. For most companies though that's just not a limitation. For most companies, defensive strategy is just a core part of the business. That's something you should be thinking about every day. Who's attacking my business now, but maybe more important, who might be attacking my business next year, the year after that year after that?
And what do I do to try to make sure that I'm delighting my customers, so that they have no interest in going to any of those competitive products when they come along.
Mitch:
And I liked your takeaway in the book. You said, you should never undertake a defensive effort without a direct involvement and advice of your legal team. And I think that's just good advice.
Tim:
I think that's good advice, whether you're thinking offense or defense. You know, the thing about marketing plans, whether they're offense or defense, is that you really need, the team working on it. And you need lots of perspectives. And in health care, for example, you really need to include the legal team. You need to include the regulatory team there, because you want to be sure that everything you're doing is OK, and is appropriate, both from a regulatory perspective, from a legal perspective, from an ethical perspective. That's a given. The way you do that, is you make sure you get people in the room and so they just let you know if you're getting anywhere near a line that you shouldn't be getting near.
Melinda:
Well, let's switch gears a bit and let's focus specifically on pharmaceuticals and health care since that's the space Mitch and I seem to live in these days. What I think is fascinating about health care; everything I was taught in graduate school focused on a direct contact with the consumer and in healthcare it's different. Mitch and I like to say there's these multiple actors involved. You've got the patient receiving the care and the product, but they maybe didn't pay for it. They didn't decide to get it. That's done by other actors. Right? The actor of, you know, that their employer is paying for it or their insurance company. There's the physician who's making decision who might be limited by what's available on their formulary or their system that's in place. So, with all of these different actors that are in play for healthcare, how do you think that impacts the way our clients need to think about
developing strategy?
Tim:
Well, Melinda, you're absolutely right that there's so many players in health care.
It's what makes healthcare and pharma in particular, such an interesting space for marketing because it takes the typical product, which is pretty complicated, and takes it to another level.
I think the key is really need to be aware of, who are these different players, and I love the use of that word, the actors, and who are these different actors that are going to be involved in my product's customer journey, if you will. And really think about which ones are most important. You know, the reality is there's not one model that always works. For some products, it's just really important to make sure you've got that physician on board, and if you went over that physician, that's going to be just fine. You're going to be OK.
There's other products where it really is about motivating the patient and getting patient requests. There's other products where the payer is really going to drive things. You know, for me, I think you've got to think about everybody who's involved and what's motivating them, then you have to think about who's going to pull this thing through. Somebody's got to fight for this product. At the end of the day, somebody's gotta pull it through, and you really want to ask yourself, "Who is that, and, and how do I leverage that actor to make sure it happens?"
Melinda:
Well, how about sticking with pharma for a bit? Can you give us an example of a brand that you think is a good example of a successful strategy?
Tim:
I've been really impressed with Ocrevus. So, this was product came out from Genentech, and it was in the MS space. And the amazing thing was, you know, talk about a crowded market. I believe that product was the 14th drug that was going to enter the MS space. But what was amazing was by making a number of strategic choices, they were able to bring that product out and turn it into just an incredible, incredible success. So, you know one of the things for example when they were doing their clinical trials, they said, "Fine. We're going to put this in relapsing remitting. We're going to test it there but we're also going to test it in primary, progressive MS." Which is a smaller part of the market. But, of course, there's no products in that space. What they did by doing that, and this was way early in the development process, was they created differentiation about the product. That created news, created excitement. Then when they brought it to the market, they made a really concerted effort to make sure that people thought of that product early in the treatment paradigm and not late. You know, very often, the newest molecule comes out, you get used late in the treatment progression. But they went off and they said, "No, no, no. The goal here is to get this used really early." So, they went ahead with a big campaign about early treatment. This whole campaign, it starts with a flicker, was one of their early executions.
They were trying to make sure that people move quickly to treat, but also move quickly to treat with Ocrevus.
And that product came out, and because it had convenient dosing, just twice a year, and it had this compelling marketing about use. But also, this very empowering marketing for patients. And then what they did is they also paired it with a really interesting decision on pricing where they came in and they priced it below the existing products that were out there. It was smart, really in each step in that process, because they were able to look at the players, the actors, and make sure that all of the actors saw this as a success. And, of course, that's turned into what was that 2019? That was almost $4 billion now in revenue. Just an amazing success story, which came from though a series of really smart strategic choices.
Mitch:
You know, kind of goes back to what we were talking about, the multiple actors in pharma. Here's a great example where they had a cohesive winning strategy based on medical, marketing, access. It's almost like, you know, some of the better successful strategies we see are when you have cohesive imperatives for each one of those groups that are focused on a single strategy.
Melinda:
So, we are witnessing an acceleration in health care industry. This greater focus on digital solutions, including communications and health solutions and Mitch and I often reference the "Kellogg on Branding and Hyper-Connected World". I think that's been very helpful for our clients to think about digital in the right way. Tim, could you give us some just high level tips on how to include digital in their developing strategies? Because right now we keep saying an app as the solution. Can you give them some tips to how do they think about incorporating digital?
Tim:
So digital is interesting. It used to be, I think, that people took digital and they a little bit set it on the side. And they said, "We've got all of our activities. And then we've got our digital things going on." In a way it's a little bit like how we used to teach it here at Kellogg at the business school. We would have our marketing courses, and then we'd have 1 or 2 on digital marketing. More and more though I think that's not the right way to look at it, and it's, things are evolving. You know, at the moment, everything has become digital. It is so much a part of every business, every go to market strategy. Today, I wouldn't be thinking of digital as this thing you do on the side. Digital and all of these tools that are available to us are now just core parts of marketing. So, when you think about digital, really the question is, "How is it that we communicate with? How is it that we influence? How is it that we shape behaviors in the market?"
So, the biggest piece of advice I would have for people, is not to think of it as a separate thing; what are we doing in digital? It is to incorporate digital in everything that you do. You know now you go back to Kellogg, we don't really have a lot of digital marketing courses, because every course has become digital. And that's just what the world of marketing is all about.
Mitch:
So, Tim – Columbia, Professor Rita McGrath, and I think you may know her,
said a few years ago, that strategic thinking frameworks and tools like Porter's five forces, you know, there's the Boston Consulting Group Matrix, there's the SWOT analysis. That these tools came from an era when competition was less vigorous. And that these tools were great, and they work well, because we had stable industries. But today, we're seeing a more rapid change with industries competing with industries and different arenas being created where competition now manifests itself that it didn't before. So, do you believe we're entering a new era of strategy where new ideas and models for thinking about strategy are needed?
Tim:
I think that a lot of the core models that we've worked with are still 100% relevant today. If you go back and look at, know, the five forces or the SWOT analyses, a lot of these frameworks, they worked in the past, and they still work today, even, as things move faster. You know the thought process is still really important. The thought process of saying, "Well, what are the barriers to entry, and what are my opportunities?" These, are all, I think very good disciplines to get used to. My big concern with a lot of the frameworks though, is that they don't necessarily get you to action. So, when you think about developing, a great marketing plan, for me, it's all about what are we going to go and do?
And I think, when you think about strategy, that really is the big question. You know, it's great to analyze things, but we've gotta get to the question of, "Well, okay, so, what? What are we going to go and do?" And that really should be the focus of the conversation.
Melinda:
Tim, this has been really helpful and a great discussion. Mitch and I like to end our podcast with what we call Quick Tips. So would you mind being our guest and share what you see as some quick tips for marketers to develop good strategic thinking?
Tim:
Number one, when you're developing strategic initiatives, make sure they're actions. Also make sure they're debatable. If it's not debatable, you really haven't gotten to the choice that's involved in it. If it's something everybody agrees with, that's not going to happen. The other tip I would say is to try to keep it simple. It is so easy to make things complicated, but all that really does is obscure the thinking and obscure the ideas. I think simplicity is just such a fundamental thing when it comes to great planning. That you want to make sure, at the end of the day, you've got a plan that is crisp, that's clear, that's simple, that people can really understand. And if you've got that, it's going to drive your success.
Melinda:
Well, we are all out of time today, and I want to give a big thanks to Tim Calkins for joining us. That was great. We could have spent an entire day with him or an entire semester if we were enrolled in one of his classes. So, I really hope you enjoyed the episode. And as always, if you have questions, see the pod notes for more information, but you can also e-mail us with any questions. And special thanks to our sound engineer, Rick, at Earshot Audiopost.
And we always like to end with a little comedy. So, Mitch, how are we going to close this one out?
Mitch:
Well, you know, we've seen a lot of direct-to-consumer advertising for prescription medications on TV over the last 20 years. We've all seen them. Melinda, you and I've even been a part of helping create some of these ads. These are typically your 60 second spots showing people doing, you know, various everyday things in life while communicating the benefits of their brand for a particular disease. But due to FDA regulations regarding fair balance, the side effects often comprise more than half the time allocated. And to the average viewer these can sound ominous. So, we're going to leave you here with Jeff Foxworthy who, in only the way he can, describe what it must sound like to consumers.
