Fractional Leadership: What You Need To Know As An Outside CMO Coming In With Steve Watt 

January 15, 2020
YourLIVINGBrand.live

LBL Watt | Fractional Leadership

 

The most effective marketing strategies are those that involve teamwork from the top leaders down to the team members. But what if the company brings in someone from outside to manage the team? In this episode, Ben Baker and Steve Watt, a Fractional Marketing Leader, discuss what fractional leadership is and the importance of letting a team know their roles and the role of the outside leader coming in. Diving into the marketing world, Ben and Steve expose the reality of what’s going on in the space and explain why it’s more important to add value rather than sell yourself.

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Fractional Leadership: What You Need To Know As An Outside CMO Coming In With Steve Watt

We're going to talk about marketing. I've got Steve Watt coming to me from Toronto. I talk about brand strategy, he talks about marketing. There is such an incredible amount to unpack in what's going on in the marketing world now that I had to bring Steve on so we can have this conversation. Steve, welcome to the show.

Thanks for having me. Ben, I am excited to be here. I felt immediately as we started talking that we could go all day. Our job is to dial this into something useful for the audience in some reasonable timeframe.

You call yourself a Fractional Chief Marketing Officer and I love that. Take me back to where you came from, where you are now and where are you going with this? The world has changed, marketing has changed, it's changing and the needs of different companies are changing. What brought you to where you are now?

The gig economy is not just for Uber drivers anymore. Who says leaders can't participate in that model as well? There's a bit of a long-term established concept of the Fractional CFO. A lot of startups and scale ups need real financial leadership at particular times when they're raising funds and that year end and when they're involved in mergers or acquisitions. They need a CFO or someone who brings that kind of real expertise. They neither need nor can afford an experienced CFO all year round. Fractional CFOs fill that market need by working with a variety of smaller companies. That way of thinking and operating is starting to spread into some other areas and marketing is one of those.

A good friend and mentor of mine have been on this road for a few years and it's been working well for him and his clients. A couple of years ago, I found myself between jobs as one often does in a lot of fields. Even more so in marketing and tech marketing where I play. It's rough out there. Companies come and go, jobs come and go, strategies come and go. It's a lot of rocky waters. I was reflecting on some great experiences I had working with some amazing people and organizations and some experiences I've had that had gone the other way.

I thought, "I need to be more purposeful in choosing what I do, where I do it and who I do it with.” What better way to take ownership of that than not go look for another job? Instead, establish myself as a successful and knowledgeable person within a particular niche that delivers a particular value that particular companies at particular stages would need. Be able to be a little choosier as to who I work with and in what way and work with two or three different companies at once. A couple of days a week here, a couple days a week there, maybe flex it up and flex it down based on their needs and on my needs. The hypothesis was, perhaps this would be an amazing thing for me and for the organizations that I'll be working with. Thus far, a few years in, it's going well.

That's interesting because we had Paul Riegel from The CFO Center on this show and that's exactly what they do. They're part-time CFO type work. It makes so much sense in this economy because how many companies that are $5 million, $10 million, even $20 million can afford a full-time Chief Marketing Officer, Chief Financial Officer at $250,000-plus? Two years down the road they realize, "We got the wrong person. We've got to get rid of this person. We’ve got to do a transition all over again." Having somebody on part-time not only is more beneficial cost-wise, but it allows you to have that flexibility both as an organization and also as a CFO or the CMO. It allows you to sit there and say, "If it's not working, let's help you transition through this without all the ugliness that goes through it."

If you find the right dance partners, it's truly a win-win or I would even say win-win-win. It's a win for the individual, for the fractional leader. It's a win for the company, the CEO, the ownership or what have you. It's also a win for the team within that organization, the marketing team in this case who gets to level up their game by working with someone who brings in some outside perspective and expertise, but who isn't there all the time. There's also a real opportunity for them to level up and lead and perhaps lead in new ways.

LBL Watt | Fractional Leadership

Fractional Leadership: Sometimes people underestimate the importance of jelling with the team.

 

If you choose your partners right, which doesn't always happen, but if you do, it's a mutually beneficial environment. It mitigates risk all over the place. I jokingly say to CEOs when I talk to them, "I'll come in and we'll do this thing. If at some point you're not loving it anymore or you want to go in a different direction, just stop paying me and I'll stop showing up. No harm, no foul." You're not in a legal obligation, a moral obligation or a PR optics obligation. We can go in different ways without hurting feelings and burning bridges. It takes a lot of trust on all sides to have that work well but I am definitely finding that it absolutely can and I know others are as well.

It’s not only that. If you are a cyclical business and all of a sudden you have two months where there's operational stuff that needs to be done. The high-level stuff can go on hiatus, stay over summer because the strategy has already been done. The tactics need to be built. You don't need to have that person. You can go on holidays for eight weeks or six weeks or whatever and come back. They don't have to pay you for those six or eight weeks. There are a lot of benefits to do that as well. I want to talk to you about leveling up the team because that's a word that you used. That is an amazing thought process as an outside leader coming in to be able to level up that team because you have a lot of people that come in and say, "We've got this part-time consultant that's coming in to manage us as a team."

It's not managing, it's leading and it's giving them the tools to become better leaders. I want to talk to you about that. When you come into an organization and there is already a team in place and they're jelled and they're working well-together, how do you build that trust with that team and how do you give them the tools to realize, "I'm here to help make you better and I'm here to help create the opportunities and be the advocate for this department to larger organizations." That's tough being the pro from dover just parachuting in a time. How do you go about doing that?

I think firstly, it’s coming in with a lot of empathy, coming in with a true understanding that this could be awkward, this could be difficult. Is this person being brought in because senior leadership doesn't have faith in us? Is this person being brought in because senior leadership has a lot of faith in us and wants us to level up and wants to help us achieve greater things? Recognizing that there are different personalities and different career aspirations going on here and then it can be difficult. Being empathetic, transparent, honest and investing in those relationships. I hate the consultant word because that implies dropping a PowerPoint deck that explains why you people are doing everything wrong and heading to the airport.

It probably has no empathy for the existing experience or existing personality like, "Here's a framework. Here is a playbook and you're all doing it wrong unless you do this. I got a flight to catch, bye." That would be a disaster and I never ever would want to be that guy. I've had the great pleasure and benefit of working with some amazing marketers over the years and they're not all at senior levels. I've worked with many amazing marketers who are much more junior. I've learned a lot from them. Sometimes I've learned technical things from them. I've learned aspects of the customer from them. I've learned the ways that they work together. I've learned so much. I truly believe that you can learn a lot from everyone.

When I go in, I invest a lot in those relationships with the marketing team and trying to be a sponge to understand where they're at now, where they've come from, what's going well from their perspective and what's not going well. What they know needs to happen, but they don't have the budget or the bandwidth to do. I’m demonstrating authentically to them that I am a part of their team. I am not here to tell them they're doing everything wrong because they might be doing a whole lot of things right. In fact, I hope they are doing a whole lot of things right because then we can all succeed together better.

A lot of empathy, a lot of investing in those relationships and asking a lot of questions before I start saying, "Here are the things I want to change." It’s treating them as partners throughout the whole process. The critical relationships for anyone doing what I'm doing, there's a critical up relationship with the CEO. There are critical parallel relationships with the head of sales, head of product, customer success and other things. There are critical relationships in the marketing team. You're going to fail if you get any of them wrong. Sometimes people underestimate the importance of jelling with that team.

The underlying word that I'm hearing without hearing it is trust. There's trust in all things. There's trust with the CEO, the C-Suite and the people that you're particularly working for. There’s a parallel relationship with sales, with operations, with whatever. That trust is something that takes a lot of effort, a lot of communication, a lot of standing there and doing the job. My question to you is, when you first walk into an organization or even before you walk into an organization, where are your first levels of communication? What are the first questions that you're asking to make sure that it's the right fit? Taking on employment, whether it's part-time employment or going to work for somebody or whatever, it's got to be a two-way street. There's got to be an understanding both ways. A lot of junior people look at us as, "I'm applying for a job and it's up to them to ask the questions. It’s up to me to answer the questions." I never think that it's true. We all need to sit there and say it's a relationship when you're going into any of these types of situations. How do you start that relationship because how you start will determine its success long-term?

The job seeker is interviewing the company as much as the company is interviewing the job seeker. Click To Tweet

Oftentimes, people will intellectually agree that it ought to be a two-way street. The job seeker is interviewing the company as much as the company is interviewing the job seeker. Everyone nods their heads and go, "That sounds right." If you're unemployed and you've got bills to pay, it's like, "I want this job." All of a sudden, you're selling yourself. You're not having an honest two-way conversation. You're selling yourself in hopes of landing a role. Sometimes success in that is not a good thing because you sell yourself into the wrong role. It's bad for everyone.

One of many things I love about this fractional model is I never need the job per se. I'm never without income. The new client, the new opportunity is something that may be beneficial for me and for them. It may add some extra income and some extra experience and some extra fun and problem solving for me. I'm excited about that but I don't need the job per se because I've got one or two other things going as well. The different mindset that I'm not selling. I have a lot of phone calls, coffees, lunches with CEOs and other senior leaders of firms. I'm never selling myself to them. I am honestly sharing what I know and asking a ton of questions about them. If they then invite me in, it’s great. Let's talk about how we could structure that to our mutual advantage.

The fact that I'm not selling myself, I'm not job-seeking creates an entirely different frame of mind for me and for the other person and therefore an entirely different conversation. More specifically, I write a lot. I speak a lot. I will take a phone call or if I can work it out logistically, a coffee meeting with pretty much any CEO who wants to reach out. I'm not there to pitch. I will ask them a lot about what's going on in their business, what's working, what isn't working, what's next, the strength of their product, of their strategy, of their finances, of their team and on and on. I will honestly answer all of their questions about what I think might be impactful for them and strategic things and executional things. I don't hold back.

It's funny, sometimes people will say, "Aren’t you giving away all your secret sauce or whatever for free?" Anyone who would think that in over the course of a 90-minute coffee conversation, they could get everything that is there, then I must not have very much value to give if it can all go in 60 or 90 minutes. Honestly, there's more there. I write a lot of things. I podcast a lot. I try to share everything that I know. That causes a lot of companies and CEOs to lean away from me because it's not a fit for what they need. That's fine. Let's not waste their time or my time. Some portion of them lean in and now we've got the beginnings of potentially a mutually beneficial relationship.

That's understanding who your customer is and through that entire conversation, you've nailed it down to say, "There are people that are going to be my clients and there are going people that aren't going to be my clients." Investing the time and the energy in a cup of coffee, in a telephone call, in a Zoom conversation to your podcast, this and other thing, allows people to determine, "Is Steve the right person for me or is he not?" As you said, you're not selling. What you're doing is you're adding value. There are some real important things for people to listen to for that, to be able to sit there and say, "You're right, nobody's going to get all your information out of you in 90 minutes. It's impossible." No way you can get all the information out of me. They can't get the information out to everybody, but the more we can share, the more we can add value, the more we can build a relationship on trust.

My question is when we start looking at the next step, how do we take a look at this and say, "How do we move things to a point where we can be the person that people believe in?" What is that thing? What's that tipping point? What makes people think that tipping point is there and its ability to do this? The thought process I came into with this is that it's important for people to understand to stay in their lane, to understand what they're good at, what they're not good at, who their client is, who their client isn't and how they add value. What are the important things? I'm sure like me, we only do work with business to business type companies. There's business to business, there's business to consumer, there's government clients. I've worked a lot with government clients. I don't tend to work a lot with government anymore.

When you're going in, when you're sitting there going, "We're going to give a CEO 90 minutes of my time. I'm going to sit down and I'm going to have a conversation. I'm going to add value,” what are the things that you're listening for? They're going to sit there and say, "This is the right conversation. This is going the right way. This is the type of person I can help because obviously there are people that you believe you can help and there are people you don't believe you can help. That's pretty much my question. What are you listening for to know that it's time to start taking that conversation to the next level? 

Half of that happens even before the conversation starts and that is the origin of that conversation. The conversation originates because the CEO has read something that I've written, has seen me speak somewhere or has listened to my podcast, either The VP Marketing Show, which is my own podcast or Flip My Funnel where I'm a recurring guest host. They have been talking to a friend or a colleague who knows me through one of these things or something else. There's a sense of, "Steve's a guy who does this thing." If they're leaning in so far as they want to have that coffee or that conversation, we're halfway to a meeting of the minds already because others wouldn't be the right person for them to spend their time with. We’re halfway there already.

LBL Watt | Fractional Leadership

Fractional Leadership: Do not sell yourself into the wrong role.

 

When we're having the conversations, I don't have a system. It's not a sales rep doing a discovery process. It's an authentic conversation. If not explicitly but implicitly what I'm listening for is honesty and openness about their business. I ask a lot of questions. If someone is going to gloss over every wart and wrinkle in their business and tell me how amazing everything is, I'm not getting a good vibe. If someone's super guarded about wanting to share any information, I don't feel that there's the foundations of trust there. Absolutely in some cases where things have progressed, I'm very happy to sign an NDA. If you need to sign an NDA to have a coffee, then there's a problem.

Honesty and integrity and ability to engage themselves in an honest conversation about where their business is at, I love that and an appreciation for marketing. There are some CEOs who have no appreciation or understanding of marketing. Some think that marketing is an outdated concept of slapping logos on water bottles, making brochures and hosting parties. Some think marketing is digital demand gen and nothing else. It's SEO, SCM. It's how many leads. Brand building is much more than those superficial things. Demand generation is much more than generating leads. Marketing is such a powerful and multi-faceted animal that can take shape in many different ways. It can contribute to businesses in many different ways depending on the needs of the business and the capabilities of the individual. I find that sometimes in speaking with a CEO, it's immediately apparent that they get that.

We have a meeting of minds around all the things that could be done. How do you prioritize? How do you balance near-term revenue generation with longer-term brand building and category building? How do you work marketing and sales and product and other things together? When there's this meeting of the minds like they get that this is complicated stuff, then I get a real warm feeling. As opposed to someone who three times in five minutes asks how many leads can you generate with no budget, which is what it boils down to in some cases.

That's how I think about it and it happens organically. Sometimes after or midway through a coffee or a lunch, we're leaning into each other. It's a natural progression of the conversation of like, "How do we go to the next step together?" Other times it's like, "It's been a pleasure meeting you. Thanks for your time. I’m wishing you all the best," and off we go. That's not a loss from my perspective. I've met someone new, I've guaranteed I learned something from them. I hope they've learned something from me and who knows where our paths may cross in the future. When it does lead to something more, it's coming from honest place on both sides.

It's getting people to understand what marketing truly is. Some people get it and some people absolutely don't. Some people look at marketing as a cost center. How much is it going to cost me? Some people take a look at it, sit there and say, "There is true ROI for branding, marketing, advertising and communication." Some of it is short-term gain and some of it is long-term gain. People that are visionary, those are the people I want to work with. I want to work with people that understand there are short-term needs, but there's also long-term vision. If you can't understand that both are important, not only the marketing department but to the company as a whole, there isn't a basis of communication. That's important.

The other thing you talked about was building the relationship with the various departments and with sales. It’s getting the sales buy-in as well. The one thing I notice in most organizations is the animosity, mistrust and misunderstanding between marketing and sales. They have different objectives. They're compensated differently. They're spoken to differently within the organization. They're given different levels of trust within the organization. How do you go about breaking down that barrier and that law? For me, it's all about communication but I want to hear it from you.

The way I look at it is that it all starts with objectives. What I mean by that is that oftentimes, a mistake is made by thinking that it all starts with the metrics. Therefore, everything needs to drive particular metrics. If you don't take that additional step back and say, "Why are these the metrics? What objectives do these metrics serve?" You can end up spending a whole lot of time, effort and money in pursuit of false goals. Every business is in a different place. Sometimes it's a startup, sometimes it's a larger firm, sometimes it is in an evangelical sales motion where they need to change the way people think about the world. They're selling something that you don't know you need and you don't know it exists. They need to change your understanding of the world before you buy it.

In other cases, it's a Coke versus Pepsi thing. It’s like, "Stop drinking Coke, drink my Pepsi instead." That's a completely different situation. Sometimes you're up against an 800-pound gorilla competitor. Sometimes you're going into an incredibly fragmented marketplace. Sometimes you're venture funded and the expectations for you to grow extremely quickly are overwhelmingly strong. Sometimes you're bootstrapped and a very different growth trajectory is appropriate. There are those and many more. There are many things and I always seek to uncover all of that first and then think about objectives. I'll sometimes say to a CEO, "If you had a magic wand and you could wave it and make something happen but you can only wave it once, what would that thing be?"

Oftentimes, a mistake is made by thinking that it all starts with the metrics. Click To Tweet

Is it more new customers? Is it expanding our business with our existing customers? Is it changing the perception of the marketplace and getting them to recognize that we're no longer about A, we're now about B? What would you do with that magic wand? That leads to a lot of interesting conversations. Once you get clarity on the objectives, you can start to say, "Do the metrics and the incentive systems here support or work at cross-purposes to that?" It's amazing how often they work at cross-purposes. It's like, "What we're trying to do is build long-term enterprise value by establishing an entirely new category and building a compelling brand that alters the way this piece of the market works. Yet our metrics are MQLs, SQLs and Demos this month.” You've got transactional short-term metrics, yet ultimately you're trying to pursue an entirely different thing.

You're incentivizing both implicitly in explicitly. You're incentivizing people to do things that are not in your own best interests. Explicitly because their pay depends on hitting certain numbers perhaps generating hundreds of marketing qualified leads and then they probably define that as loosely as they possibly can. Anyone who downloaded one little piece of count, "It's an MQL, look at me." Now you're phoning them. You're doing all these things. You're incentivizing people both in terms of their paycheck and whether they're going to get promoted or fired based on one set of activities when that isn't what you ultimately need. It’s a long answer but you have to start with real objectives. From the objectives, you get the metrics. Only then can you start thinking about what are the tactics, tools and activities that are going to drive those metrics in pursuit of those objectives.

Communicating throughout the organization, what are we truly trying to achieve? You and I have both seen it where you look at the metrics that are there and you sit there going, "That might work well for IBM or that might work well for Coca-Cola. Why are we even measuring this? Why do we even care about this? Why is it part of the incentive program or whatever?” “Because so-and-so company, that's what they use as a metric,” but they're not us. That's the problem. Too many organizations are not building their metrics, their goals, their communication based on what's important to them. They're doing it based on these supposed industry standards. Organizations need to start looking at themselves as individuals, what they need and what they're trying to achieve rather than trying to put a yardstick up against the industry standard which is artificial anyway.

A recognition of the vast difference between a high-velocity transactional sale versus a long and complex enterprise sale. They are dramatically different. If you are in a high-velocity selling motion where you can close relatively simple deals in a couple of phone calls, maybe an online demo, then you need a whole lot of qualified leads. Of course, you do. That is going to lead to a particular set of structures and activities. Who you hire, what tools you use, how you budget, what you measure, what you reward, all of those things in support of that. That is dramatically different from another organization that maybe has a year-long sale, a seven or eight-figure sale with multiple stakeholders and they've got to engage across different buying units, across different geographies, different levels of the organization, procurement, legal, IT, all these areas. That's entirely different. What works in one will fall flat on its face in the other. It's so obvious and no one would disagree with what I said. When they start putting it into concrete action about how they structure their teams, what metrics they pursue, how they incentivize their people. They sometimes lose sight of that. They start incentivizing the wrong things and then no surprise, things aren't going well.

I think of things like Boeing or IBM and trying to incentivize those people based on short-term goals. It doesn't work. How long does it take to sell a 787? It will probably take years.

Let's start incentivizing Boeing production guys. Let's pay them per screw that they tighten. They'll tighten a whole lot of screws, won't they? They'll miss a few along the way and we'll have disastrous consequences. They better be incentivizing people for 100% quality above all. What are your objectives and from that, what are the metrics that support those objectives and then everything else lines up underneath that?

I'm going to ask you two quick questions and I'll let you go. The number one thing is how do people get in touch with you? What's the best way to get people to get in touch with you?

There are a couple of things. LinkedIn is my primary social channel. I spent a lot of time on LinkedIn, both sharing my own content and engaging, but also learning. I have so much respect for many of the amazing people that I engage with on LinkedIn. It's my window to the world. I don't start out by heading to the homepage of business publications or anything. I end up there because someone in my network shared something from HBR or from wherever. LinkedIn is my homepage. It’s Steve Watt and there are probably a few others with my name. I'm the guy who builds himself as the Fractional Marketing Leader.

LBL Watt | Fractional Leadership

Fractional Leadership: Approaching things with true intellectual curiosity and a passion to always learn and get better, allows good things to happen.

 

That's one of my things and I do most of my writing. They're both short-form and long-form content. I'm very happy to engage with people there. Podcasting like yourself, although I'm a much more junior in the podcasting world than you are. I launched the VP Marketing Show. That's been an honest effort on my part to learn more from my peers and solve some things. I had a lot of questions that I was dealing with some of the clients that I've been working with around how best to structure marketing team and metrics and operations of a marketing team. Do we go agile or do we use quarterly OKRs? Do we do annual plans? I thought, why not set out and interview a bunch of marketing leaders about how they run their teams and how they do things and why not make it a podcast instead of one-on-one conversation? Perhaps others can benefit and learn along with me. That's been great.

I'm expanding the aperture there a little bit of what that show was. It was quite literally the first episodes where everyone was a VP marketing and those were the questions I asked them. There comes a point of diminishing returns where it's like, "This is starting to sound the same." I've been broadening that and having some interesting conversations with people about what's wrong with modern marketing. What's next for modern marketing? I had a conversation with an executive recruiter who for almost 30 years is focused on leadership roles within tech firms. I'm starting to interview tech sales leaders now about what works for them in terms of that relationship between sales and marketing. The VP Marketing Show, I would urge anyone who finds the stuff we're talking about now and to be interesting or valuable to them. They may want to check that out as well.

The last question I asked people. When you leave a meeting, when you get in your car and you drive away, what's the one thing you want people to think about you when you're not in the room?

I want people to say, "That is a passionate, curious person who cares a whole lot, who knows a bunch of stuff, but also has a real appreciation for all that he doesn't know. He's a lifelong learner. Someone who I could feel good about calling a friend, calling a peer, calling a part of our organization in some capacity.” I would never try to position myself as someone who has it all figured out. If you approach things with a true intellectual curiosity and a passion to always learn and always get better, that good things almost always happen. If I left that impression, I'd be happy. It’s an interesting question. I don't think I've ever been asked that question before.

It's my favorite question. It gives me the great insight into people's soul. I love asking that question. Steve, thank you for being a phenomenal guest for adding some real insight and talking about a subject that we don't talk about a lot. It adds value to my audience and I appreciate it. Thanks for being here.

Thank you for having me on, Ben. I have truly enjoyed this conversation. It's an absolute pleasure to speak with you. I look forward to continuing our relationship because we are fellow travelers on this road to building great companies and building great careers, and I've thoroughly enjoyed this. Thank you.

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About Steve Watt

Fractional Marketing Leader

Steve Watt is two years into an experiment. The hypothesis is that working in a fractional capacity with several organizations accelerates his learning and his opportunity to make a meaningful impact. He regularly leads marketing initiatives at an enterprise B2B demand marketing agency (Quarry) and at a mid-market SaaS company (Avanti Software).

He also advises several technology startups, regularly writes on B2B topics, and guest hosts the #FlipMyFunnel podcast. His latest project is a new podcast, The VP Marketing Show, in which he explores core marketing leadership topics including organization structure, hiring, metrics, brand building and more with a wide range of successful executives across North America.

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