On Tuesday, May 17, the Chief Marketing Officer Institute will reveal the winners of its "CMO of the Year" award for leadership excellence. As we did last year, CMO.com is publishing exclusive interviews with each of the nine finalists, who discussed with the CMO Journal the strategies and tactics they employed to achieve marketing success at their respective organizations.
>> Category: Large Organization
>> Company Description: PAETEC, a FORTUNE 1000 company, is personalizing business communications for medium and large businesses, enterprise organizations, and institutions across the United States. The company offers a comprehensive suite of IP, voice, data, and Internet services, as well as enterprise communications management software, network security solutions, CPE, and managed services.
>> Highlights: PAETEC had a banner year in 2010 despite a difficult economic environment. In addition to strategic product developments based on feedback directly from customers, PAETEC acquired four companies totaling nearly $500,000,000 in revenue. Each required customized planning, communication, and execution not just to integrate products, but also to absorb more than 1,000 new employees into the culture. Under Chapman’s leadership, the company received numerous accolades, including being listed at #35 on the Top Training Organizations in the World by Training Magazine, placement for the first time in the Fortune 1000 list, Products of the Year recognition from Communications Solutions and Internet Telephony, as well as Best Places to Work recognition in New York, New Jersey, and Texas.
>> The Conversation:
?CMOJ: It was noted in your nomination that your corporate strategy for PAETEC “is valued and adopted by the senior officers of the company in mapping the PAETEC’s strategic direction.” In the process of gaining that consensus among your peers, was there anything different or extraordinary in your approach that you would recommend other CMOs employ in their own efforts??
JC: Our most effective method for developing strategy is also the most intuitive. Twice per year, we simply bring our top 10 or 15 customers across 60 cities into a conference room and ask them what we do well, what we don’t do well, and what we should start doing that we aren’t currently doing. We call it our Customer Advisory Board program, and it has been the basis for many of our best decisions over the past seven years.
We then balance the strategic ideas garnered from our customers with feedback from our various sales channels, other voice-of-the-customer inputs such as surveys and Net Promoter Scores, and various industry analyst and market research to deliver a quality suite of personalized solutions with unmatched service. The closer we are to the customer and keep to our innovative approach of developing solutions with an outstanding service delivery model, the more we feel we are on the right track. Having a suite of innovation solutions that map to our customer needs and are difficult to replicate by our competitors serves us well. Overall, the key is listening to our various stakeholders to determine how to create a winning approach to enhance the customer experience.
CMOJ: PAETEC acquired four companies in 2010, which added over 1,000 new employees and incremental revenue of nearly $500,000,000. What role did marketing play at the front end of those efforts (i.e., due diligence, assessment, negotiation)? In retrospect, was there anything you wish you had done better in those pre-transaction efforts??
JC: We have been active in M&A over the past several years, and our biggest change was creating a dedicated team to help us with two areas: pre-due diligence and, more importantly, post-acquisition integration. This allowed us to continue to execute our day-to-day objectives and also to complete integrations in a more timely manner with a cohesive team and approach, from systems to products to people to operating culture. The marketing team plays a crucial role in the pre-due diligence process in terms of identifying the gaps -- which could be products, strategic assets, geographic coverage, or core expertise and skill sets -- and then corresponding opportunities. We are also active in the review of the operating analytics including revenue, products, churn, installs, credits, etc. The marketing team is critical in terms of the post-acquisition integration with the cross-functional teams in terms of messaging, positioning, branding, training, and product rationalization, and then mapping back to corresponding systems and processes.
This process becomes stronger with every acquisition (large and small) as we grow the company, our people, and processes.
CMOJ: Penn State researchers Raj Grewal and Rui Wang recently coined the term “Evolved CMO” (CMO Journal, Vol. I, 2009) to describe marketing executives that are “responsible for more than the traditional marketing tasks of branding strategies, corporate communications, managing channels, and customer service”. Given your own responsibility for disparate areas such as strategic alliances, sales contests, product development, sales and corporate training, and internal communications among others, you seem to fit this mold. In your view, is that the future of marketing -- or will it ultimately be the exception rather than the rule??
JC: I think that today’s CMOs often have a clearer vision and overall strategy for the company given our proximity to our customers, analysts, and employees. With that strategy comes the task of leading unique groups that help support that overall vision.
For instance, in addition to the traditional marketing functions, I also oversee two software companies that give an overall competitive advantage to our complete solution. While that might seem odd at first glance, it has become a natural fit in supporting our innovation across the company. It provides a more global view on the strategic decisions that span beyond marketing and products. This also provides a great learning platform to help influence and guide other team members to execute a positive outcome to enhance the customer experience.
CMOJ: Describe the relationship you have with your CEO, Arunas Chesonis. What are his expectations of you and your team, and how are those expectations measured?
?JC: Arunas is the overall visionary for the organization and will often approach us with both offbeat and innovative ideas. We then have an open, consistent, and engaging conversation with Arunas about the best methods to support our sales channels and to enhance the customer experience. The voice of the sales channels and the customer are essential to our overall success -- that drives our personalized solutions and unmatched service. We strongly believe that open communications and active collaboration with our sales channels, back-office teams, and customers provide a winning formula. Each month, we give an executive summary report that is metric-driven and provides a guide on how we are responding to our sales channels and customers. We have a strong set of both subjective and analytical touchpoints to measure our progress and make changes quickly to adapt to the marketplace.