Why Martin Lindstrom thinks CMOs and businesses have lost contact with what matters

During his keynote at Sydney’s World Business Forum, revered business transformation, brand strategy and consumer psychology expert and author, Martin Lindstrom, made a pronouncement: We have lost contact with what matters.

Whether it be our current obsession with big data, the lack of empathy in leadership and common sense in organisations, waning courage as marketers or our existential crisis as human beings, Lindstrom sees a perfect storm of forces challenging the way society and business is enacted today that requires a rethink.

Here, in this interview with CMO, Lindstrom details these concerns and the parameters of play for brands today and how he sees the role of CMO evolving as a consequence.

CMO: What worries you versus energises you about the state of marketing leadership right now?

Martin Lindstrom (ML): My biggest concern is that companies today believe the answer to everything is in data. The problem is the answers are not necessarily in big data, they’re in what I call seemingly insignificant observations we make of small, tiny things we do as humans.

What has happened as a consequence of Covid-19 is people have become used to sitting behind a screen and measuring and running the consumer from a remote control. They think they can see everything on spreadsheets. It’s not what’s in the numbers but what's in between the lines that matters. That's where you create a point of differentiation.

What worries me is the CMO increasingly believes they see the full picture through data. And increasingly, they’re seeing less and less of the complete picture. On one hand, this creates a generation of CMOs who are forgetting the essence of branding and marketing is to connect emotionally with people. We don’t connect emotionally through data. Increasingly, companies are going the same way. That means it becomes more of the same – the outcome is same, and you switch on television and every ad looks the same. You can't see a difference anymore.

Yet we still fall in love, right? There is emotion still in our world. I believe 85 per cent of everything we do every day is irrational and emotional. Yet everyone is competing in the other 15 per cent space.

It’s interesting you bring up this duality in marketing leadership between being a brand-driven marketer and a data-driven one, and not necessarily recognising that you have to be both. It’s something we’ve continued to debate as part of our CMO50 program. But don’t we need to be data-driven to demonstrate impact?

ML: The issue is the data guys are winning because they have supposedly have that link to the bottom line. The fact is, they don't. And if they do, the impact of their work is very little, because they don't dare to take chances. Everything is an incremental change of an incremental change of an average and the average is from an A/B test. No one dares to do those amazing activities that defined great brands in the past. You end up with an average group of CMOs.

The other group is a species in danger because they can't argue why this works. They can only use their instinct, informed by an accumulation of experiences over years. And guess what, a lot works, but it doesn't work all the time. Sadly, people have forgotten about the good side and only remember this approach for the bad side.

Over the course of the pandemic, we’ve seen an acceleration of digitisation, along with an elevated sense of value, purpose, societal and environmental progress. How do you see these forces transforming the way we need to pursue brand and marketing strategies?

ML: Let’s talk about first force and sense of purpose. It's very clear to me today the younger generation in particular lacks a purpose. We see that sadly with the suicide rate going up in Australia [39 per cent of all deaths for those aged 18-24 were suicides]. In the US, 65 per cent of young people have anxiety, and 42 per cent have depression. These are numbers we've never seen before in history. Why is it happening?

It's because we’re asking ourselves one of those nasty and very fundamental questions: Why am I here? You wake up and realise you don't know. At that stage, you lean up against things you trust and believe in. That can be religion, but we know religion is having an existential crisis. Or it can be democracy, but that’s also having an existential crisis. Or can be the environment or world peace. Well, both of those are in crises as well. We look at five parameters, and they're all in a crisis mode.

What these kids are doing now is either look at celebrities, which is kind of replacing religion, though I don't think a lot of people are getting value out of the Kardashians anymore. So what do you do then? You look at brands.

The issue is brands do not have a baked-in sense of purpose; their ambition is to make shareholders happy. Organisations were built in a time where that was the name of the game. The few brands that get it however, like Patagonia, have proven you can do good for the planet while also earning money.

That is a schism happening right now where marketers know the importance of aiming for good, but they can't convince the rest of the organisation because they don't have the numbers. Why? Because you have to predict the future. You can't do that with past numbers because there is no precedent on this topic. What happens is marketers lose the battle.

It’s also cross-function. If you want to be 100 per cent sustainable for example, you need to have operations and culture working together and all different divisions in the company aligned. And marketing is not respected so they lose that battle. That is a second big challenge.

The third challenge I see is that this is a people business. Great brands, with very few exceptions, depend on people. Take Uber: If Uber drivers are not happy, there's an issue and you will feel it. Uber can run all the apps in the world, but it doesn't help if my driver was angry. So you need to have great cultures as well. Culture is the last point between the brand and the consumer. That's where the employees are. Again, this is where CMOs have a problem because they sit in a bubble and are not necessarily respected throughout an organisation.

My question is, who runs culture? Is it HR? Guess what, in nine of 10 cases they don't know how to do it. And remember, culture is getting worse because of bureaucracy, compliance, rules and regulations. More and more people are less motivated, they have heavier workloads – 20 to 25 per cent more after Covid – and they have all these spreadsheets they have to fill out. Culture is collapsing because it's not landing anywhere and no one owns it. That means people are more demotivated, and it's being felt on the front line.

So you have three factors now to manage. As a brand, you are disconnected from the consumer, you have no purpose and the frontline culture is not there. Any sustainability or advertising becomes this shallow thing with a logo on the top.

One of the positives we saw during the pandemic in several organisations was a removal of red tape and processes to get things done, retain the customer and do what we can - sometimes out of necessity. How sustainable is that as a practice in this next normal?

ML: In my latest book, Ministry of Common Sense, my fundamental argument is empathy is having an existential crisis at the moment, and we’re losing the ability to put ourselves in the shoes of another person and feel what that person is feeling. We haven’t connected with people and that muscle memory we have of feeling empathy is slowly dying.

What's interesting is there's a direct correlation between empathy and common sense. Common sense is to see the world from another point of view and respect other views. But common sense is increasingly lacking in organisations everywhere. I can give you 200 examples from Australia alone - this is one of the worst countries on Earth together with the US when it comes to a lack of common sense. There's an addiction to rules, regulations and safety guidelines.

A study done around ‘safety clutter’ [produced by the Safety Science Innovation Lab at Griffith University] shows people gravitate in organisations towards more to a safety solution, creating rules around it. In fact, the study also shows you are less safe when you implement that, and that it takes more time to do that internally than actually makes people safer.

This nonsense happens to such an extent that because you use technology to push it through to market, I as a consumer end up blaming myself when it doesn't work. As consumers, we blame themselves all the time. I'm sure you’ve experienced it - you dial something or try to download something, or you have up to 15 passwords with 19 digits you used five times ago and can’t use it again. You end up with 15 post-it notes on your desk, and say to yourself, well, it’s probably me. We’re seeing consumers losing their self-esteem, which I find very worrying.

It sounds very dark. But what I'm also saying is there’s a flip side, and it’s those companies that have the courage to first reconnect with consumers and see what their true need is, then have the courage to implement a simple solution based on common sense. Once you do that, just let it go as a pilot and see what happens. A tonne of the time, you’ll realise, wow, it really works.

Is the forgiveness there if you don’t get it right?

ML: It depends on the foundations of the organisation. If the CEO is a strong CEO who understands and appreciates strong cultures, absolutely yes. If the CEO respects vulnerability and is willing to show vulnerability in their leadership style, yes, because that’s based on empathy. Every single successful brand started up with a founder that felt the pain themselves and solved it because they felt that pain. They recruited people and grew a company around it. Suddenly you skilled and tooled up and you lost that sense of empathy.

We have a new wave of CEOs coming in now with a higher degree of empathy and once that happens, I see a change.

Given what we’ve talked about today, what do CMOs need to do now to help both themselves progress as leaders as well as their organisations?

ML: CMOs have to refresh or rebrand their function. I don't believe ‘chief marketing officer’ is the right title because it has no respect unless you are in an FMCG company with a direct link to the bottom line. If you are a B2B company or anywhere else, you do not have that direct link. So I would rebrand the function. And I'd do this as cross-function.

A true CMO should also be responsible for sustainability, for culture and for comms. Those functions should meld into one. Because creating powerful brands means you create a powerful movement. That’s what Richard Branson has done. That's what Steve Jobs did in back in the days with the Apple fans and people rallying in the streets.

Weak brands are brands where there’s a big wall between what's front of house and behind the house. As soon as you go into the reception, and there's a plaque on the door saying we believe in this or that, there's an issue. Forget about it, you should feel it. Those companies are going to have big problems, soon.

The CMO has to rebrand themselves. And that means being willing to dive into how we build up our culture, how to create sustainability and build it into operations. Those questions are super tricky. But no one owns it. You can't do sustainability in one department, yet that's where we are right now. So CMOs should expand their role.

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