Insider Interview Series: Author of “Breakthrough Marketing Plans” Tim Calkins on Operations, Marketing and Strategy. Part 1
Tim is the author of Breakthrough Marketing Plans (Palgrave Macmillan, 2008) and co-editor of Kellogg on Branding (John Wiley & Sons, 2005). He has written teaching cases including Crestor, MedImmune: FluMist Introduction and Eli Lilly: Xigris.
Tim has received numerous teaching awards. He received the Top Professor Award from the Kellogg Executive MBA Program in 2007 and 2009 and the Sidney J. Levy Teaching Award in 2008. In 2006 he received the Lawrence G. Lavengood Outstanding Professor of the Year Award, the top teaching award at the Kellogg School of Management.
This is an in-depth interview that was done on the phone and then was transcribed to text. It spans various topics of operations management, marketing, future of the industry and much more.
Class 5 Consulting
Hi Tim, how are you?
I’m good – yourself?
Fantastic, fantastic! Good to have you on the phone! And to give a little introduction to our listeners: Tim has been a management consultant; he is one of the founders of Class 5 Consulting, and currently teaching for Kellogg University.
That’s exactly right! Good to be here!
Excellent! And we at www.OperationsManager.com are very curious about the interactions between Operations Management and Marketing. You are an expert on Marketing. Can you tell us more about your background and experience, in your own words – and how you got into the field.
Oh yes. I have actually background on sort of both sides of the house: both the academic world as well as the applied world. I was at Kraft Foods for many years; I started up there way back in ’91. And I was then at Kraft For eleven years, running businesses and brands – Taco Bell and DiGiorno and all of that.
And then I shifted over and now teach at Kellogg Northwestern University – so I teach Marketing Strategy and branding and all of those topics. Then, as you mentioned, I also work with companies on Marketing Strategy-type issues.
That’s fantastic! It seems you get the best of both worlds. You still get to work with them, and yet you get to educate the youngsters on the right ways to do it.
Well, it’s a nice combination. And the students really like the fact that I have spent some time I guess in the “real world,” if you will. Because that is very useful – and that’s where they will all be, soon enough. And so that combination I think is good.
Yes, absolutely! So what is your view right now on the whole world of Marketing, and management, and how it combines, and the different intricacies?
Well I think there is no question right now that companies are really challenged these days to drive profits, to drive growth. You know, in many parts of the world – over in the EU and certainly here in the US – growth is pretty hard to come by, and competition is incredibly intense.
And all of that means that companies these days really have to think about how do you carve out a distinct position in the market? And in a way that is all about Marketing. And the question I think for companies now is: How do you create something that is really unique and different in the minds of your customers so that you can differentiate yourself and you avoid getting caught in just nasty price battles that will drive down margins and destroy profitability?
So I think every company right now is – should be and really is – focused on thinking about “How do we do that?” And I think that is going to be the core challenge for many years to come.
And do you see, for the group of students you are working with, that they have to have not just Marketing background, but understanding more about how business processes work? Or do you think is it still enough to have a Marketing background if you go into management?
You know, I think cross-functional interaction is really essential because it is not enough just to be good at Marketing, and it is not enough just to be good at strategy. You know, you actually have to figure out how do you make all of that happen.
And at the end of the day, really it is the connection between Marketing Strategy and Operations that I think really matters. Because you can have the best strategy in the world, but if the Operations side of the business isn’t really working efficiently, it is very difficult to execute that successfully.
And likewise, you can have the best Marketing Strategy – but unless the entire organization is engaged in really performing well, it is just not going to work in the end when you get out into the market.
And like you mentioned before, competition now is really fierce in most businesses because of the international markets. And I have spoken with some experts in Operations Management and they say that for sales and Operations planning, working together allows for some cost-cuttings, for flexibility for overall improvement of productivity without increasing the costs. What is your view on this?
Well I think that is absolutely right! I mean, there is a huge opportunity to make sure that all of the sales efforts and all of the Marketing efforts are aligned totally with the Operations side of the house.
And it really has to all work together because the drive for efficiency continues. You know, what really is key is the ability to match the supply and demand. Because if you don’t, either you are going to be short on product and you are going to miss out on sales, or you are going to be long on product and then you will have problems with inventory management and obsolescence.
So making sure those two things work really closely together I think is so important – because the Supply Chain issues are really important and efficiency is critical. And especially with the global Supply Chain, you can’t reload inventories that quickly.
You know, if you are producing everything in China and it has all got to be shipped to get to some of the other markets, well unless you are really good at understanding what is going to drive that demand, you are going to have massive inventory problems.
And you mentioned efficiency. Do you see changes maybe from what we have right now, where we are working with different products, and how it was ten years ago, or fifteen years ago? Do you see there is any difference in Supply Chain Marketing?
Oh, I think absolutely! I think it is a night and day transition. You know, it depends a little bit by industry – but I think generally speaking you would say the rise of globalization, and the rise of production and global Supply Chains has really dramatically changed the challenge for managers. And I think it has made it much harder because the question is: How do you manage a global Operation? And I think most companies find themselves in that world where production is coming overseas; a lot of it is coming out of China – and the question then is how do you manage that? You know, It is a lot easier when your factory is right behind your offices because at that point you have got less shipping time, and a lot more flexibility.
But I think now every business is faced with this question, of “How do we manage it efficiently and at the same time how do we make sure that we service our customers and make sure our distributors are happy? And all of that says unless you have got really good integration and really good efficiency, you are going to be in a lot of trouble.
And can you maybe show us some examples from your work doing consulting for companies – what kinds of problems are they experience? Or not necessarily the problems but the differences in the way they approached things before and now, and how they have to adapt to it?
Well I think it is incredible if you look at some of the technology companies that are playing the global game – I mean, even if you look at a company like Apple, I think it is just an incredible story in terms of how they managed their Operations and Supply Chain – I mean, you can get on a website, and order an iPod, and then three days later here comes the iPod, shipped directly out of China where it has been assembled and put together.
And what they have cut out of the whole process there is they have cut out a lot of time; they have got an incredibly efficient delivery system.
You know, one of the things about Apple – a lot of people say Apple is pretty impressive because they can design great products and are pretty good marketers – and that they are. But it is also amazing how efficient they are and how good they are at managing the Supply Chain so that they are able to avoid a lot of the ups and downs – because that can really cause big problems.
You know, if you are at Apple and you find yourself with way too much inventory on a particular product, well that creates some issues because either you have got big write-offs or you have got to go dump that product – and in the process of dumping it you can sort of damage your brand and the road out to future sales.
So I think they are a great example of a company that is both pretty darn savvy on the front-end but also matches it with a lot of understanding on the back, too.
Absolutely! And do you find that in the world of Marketing – you know, you wrote a book, Breakthrough Marketing Plans – what do you find a big takeaway should be for a lot of companies, in terms of their Marketing plan, and how to align it with the Operations plan?
Yes, the key thing on Marketing plans these days – and what I talk about a lot in that book – is the need to really focus in on what you are going to be doing to drive the business. And I think the key to any Marketing plan is always answering two simple questions, which is: What are we going to go do? And in particular what are the three big things we have got to focus on to drive the business forward? And then get to the question about why exactly are those the right ones for us to focus on?
And the thing that is critical right now is that there are so many things that you can do; there is so much data in the world, that I think the challenge for any company is to say, “Well what exactly are we going to focus on right now? What are the three things to really drive the business forwards?”
The other thing I talk about in my Marketing Plans book is the need for cross-functional involvement. You know, I think you see companies can often get into big troubles when Marketing is disconnected from the Operations side of the business or from the financial side of the business – and it has really got to be a cross-functional endeavor.
So one of the best practices I talk about in the Marketing Plans book is really to make it a priority to involve the cross-functional team. And before you get too far along in terms of developing your Marketing plan, to be sure you have assembled the cross-functional team to make sure everybody is engaged in the process.