dca time for cmos to adopt the 7s framework

It’s Time for CMOs to adopt the 7S Framework

“While it’s critical to consolidate cost, you can’t consolidate creativity.” By Dean Crutchfield Associates

Dean Crutchfield Associates

Marketing faces its first real existential crisis today, especially as pressure on CMOs to achieve what many are referring to as “the same impact for 60% of the dollars” builds. That’s why now’s the time for CMOs to adopt and apply to marketing operations the 7-S Framework: An analytical tool that’s been successfully used by hundreds of firms.

The 7S Framework Developed by McKinsey consultants in the early 1980s for organizations, the framework represented a new way of

thinking about organizational effectiveness, focused not on structure but on coordination. A simple concept:

change one of seven interrelated levers, and you must change them all.

CMOs today have remarkable

opportunities to engage consumers in a two-way relationship. To do so requires

recalibrating their entire marketing operation, from departments to brands through to agency partners. Leveraging

the principles of the 7-S Framework can help CMOs standardize the success

and efficiency of the process.


Today’s consumer admires brands that enable them to participate. CMOs must adopt narrative-based brand and marketing strategies that can engage consumers: creating brands that are more magnanimous, malleable and functional. Product (RED)’s unique approach reinvented the business of philanthropy by creating reciprocity with the customer while simultaneously demonstrating that its partner brands promote the cause and concomitantly make money by doing good. That takes coordination of all seven levers.

Here’s an overview of the seven levers and the ways in which CMOs should apply the framework to optimize their own operations: 1. Shared values. The interconnecting center of McKinsey’s model, this is where the other six levers come together.


2. Strategy CMOs are seeking new ways to get and keep customers. According to Verse Group and Jupiter research, more than 60% of CMOs surveyed said that traditional advertising and brand positioning are not as effective for attracting customers. So CMOs are looking to improve CPM, e.g., Reckitt-Benckiser’s decision to boost TV advertising effectiveness by ramping up online video spend with the likes of Hulu.com. According to eMarketer, online advertising is expected to generate $39.5 billion in sales this year — a 23.3% increase from 2011 — compared to a sum of $33.8 billion on print. By 2013 that figure is estimated to be closer to $43 billion.

That doesn’t mean TV advertising is dead, far from it, it just the “traditional part”. Today we have affordable and reliable technology and orchestrated media to tap into the consumer, it’s opened what we can see, hear, taste, touch and smell all sorts of tools for pre-event anticipation, preparation, and experience; the actual shopping, interactions, and flow; as well as post-purchase memories and rewards


3. Structure For the CMO, what matters is the structure of agency relationships. Consolidation is king, as evidenced by a number of flawed big brand attempts, e.g., Dell attempt to consolidate 800 agencies into Enfatico. While it’s critical to consolidate cost, you can’t consolidate creativity. The fix? P&G’s “Brand Agency Leader” value-based compensation model,

where one agency is responsible for all the other partners, including payments, budgets and hires.

On the other hand, you have moves being made by industry leaders such as Coca-Cola and Unilever who are both looking under their belt to find efficiencies that they can add back into their media spend. Coke is planning to find over $500M! The 7 variables are crucial for this model to succeed.

4. System ROI is the system the CMO needs to perfect. To enhance the CFO’s view of marketing’s value, CMOs are leading the charge for change, as demonstrated by Coca-Cola Co.’s recent initiative to push for the adoption of value-based compensation models. The idea isn’t new, but the need has gained momentum as CMOs hasten to cut costs and complain that current ROI tools are inadequate. Management consultancies are piling in to help. Look out!


5. Staffing The CMO is the key to a successful

staffing strategy as he or she decides how to build the brand

across multiple channels and the people required. Understanding the

variables of the 7-S Framework is essential as pressure mounts to reduce headcount, but retain the best people for the task in hand. “The Vitality Curve” is one of the

best tools for doing so: It prioritizes the top 20% for special treatment,

70% for training and the bottom 10% for firing.


It used to be the 4Ps (price, product, place, promotion); now it’s the 4Cs: content, community, commerce and consumers. To tap these, the full force of marketing is awesomely powerful, but there are caveats if you neglect certain levers. PepsiCo Americas CEO Massimo d’Amore’s vainglorious attempt to revitalize seven brands simultaneously to save costs, consolidate agency partners and bring a cohesive approach to the brands backfired, costing millions. While big results require big ambitions, appetites need to be separated from requirements (7 of them).

6. Style/Culture For the CMO, it’s the style of marketing communication that can optimize the changing relationship between brand and consumer. Today marketers can hold entirely different conversations with the consumer by shaping brands that enable people to participate. .


7. Skill For marketers it’s about how to generate more “earned media” from budgets and how brand narratives, non-traditional media and innovation will play a central role, but there’s a skill gap between need and capability. Ultimately, with a shift in the world of brands and marketing, new skills are required as ever more complex programs are designed that integrate traditional and non-traditional media.

P&G’s “Build From Within” program tracks the performance of its star performers, known as Proctoids, via monthly and annual talent reviews. Evidently it’s been successful in so far, but issues are afoot for P&G as customers switch to lower value brands.


The success of contrarian marketing strategies requires CMOs to table prevailing marketing theories and embrace experimentation.

There are very few things in business that pay off by waiting. Now’s the time for the CMO to leverage the 7-S Framework.

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