Back in the late 90s, Silicon Valley, and the companies that hailed from there, could do no wrong. The likes of Cisco, Sun, Dell, HP and Microsoft were riding high on the dotcom wave and comprised a global elite of B2B brands for whom anything seemed possible. The events of 2001, and their aftermath, certainly brought these organisations down to earth, and in the years since they have had to adjust to existing and carrying out business in a less stratospheric environment for some a thoroughly chastening experience.
Like the economy as a whole since then, the Silicon Valley fraternity have felt the good times return; if not to the same extent as pre-9/11. The stable and more measured economic growth has allowed most of them to rebuild their businesses and profits in a more sustainable environment. Most, but not all.
Sun Microsystems, arguably the most creative, idiosyncratic and above all interesting of this group, has found the new world order more difficult to deal with. The last five years has been a troublesome time for Sun, with competitor activity taking the gloss off some of its best known innovations such as programming language Java and operating system Solaris and asking fundamental questions of what it was and where it was headed.
Unpalatable as it may be, however, the medicine appears to be working, and there are signs that Sun is confounding its critics and heading in the right direction. Meanwhile, wholesale changes are continuing to take place across the organisation, in all markets and in all areas of operation; particularly those that reach out to customers in other words sales and marketing. And in the UK, these fall largely under the auspices of marketing director Michael Avis.
Avis took on the marketing director role in 2002, with a brief to work closely with Trudy Norris-Grey, president and MD, to help steer the company through the challenges ahead. Yet it would appear that, in many respects, his job only started in earnest more recently. Specifically, Avis pins this down to the last 12 months, which saw the launch of a three-year programme aimed at fundamentally changing the way that Sun relates to, and communicates with, its target market. The easiest way to explain this, he says, is through a four-letter acronym the company has coined: BMFO: building a market-focused organisation. It means the whole company has to change, he says. This is a long-term process.
Avis is very specific here: it is about being ‘market’ focused, not ‘marketing’ focused. Whilst he readily acknowledges a historical problem in the relationship between marketing and sales, the objective is not to say that marketing is good and sales is bad; it is to get both functions working together for the benefit of the organisation. Sun is in a turnaround situation, explains Avis. Sales and marketing have to be on the same page, otherwise you don’t get the best out of the resources.
Besides ensuring functional co-operation, which is obviously an objective that all organisations should be striving towards, what does being ‘market-focused’ mean from a business perspective? Avis explains succinctly: It’s about understanding and meeting the current and un-met needs of our customers.
Again, this may appear obvious on first impressions, but has repercussions for the way in which Sun Microsystems has marketed itself, fitted into the Silicon Valley world and ultimately what it has delivered.
It’s becoming more difficult for technology companies to differentiate themselves by product, explains Avis. This is the consequence of the evolution of organisations attitudes towards IT (or ICT, to use the rapidly encroaching US parlance), which is driven at by the board through procurement departments, who are taking responsibility for purchasing. The result is that IT is increasingly being evaluated from a commodity-based business-benefits perspective, rather than on the basis of a philosophical functional methodology. In other words: companies are looking at what the technology can do for them, rather than being so concerned with how it does it.
IT brands have not been slow to understand this, and have sought to address it through their marketing, but some are achieving this more successfully than others. The success of IBM in reinventing itself as a solutions company rather than a hardware vendor is the most obvious example. IBM’s trump card is its link with its customers this gives them a competitive edge, says Avis. Dell’s is efficiency they are easy to work with.
Sun Microsystems, meanwhile, had a long standing commitment to innovation and delivering new ideas, and its market position reflected this. But this product-based positioning was at odds with the solutions-based proposition the market was demanding. Something had to give, and Sun recognised this. It had to shift its positioning and approach to the market to meet the needs of its customers, but without losing its cultural heritage and positive associations. More specifically, it had to deliver products, services and solutions that the market genuinely demanded and could use to drive business benefits, rather than strive so much for innovation for its own sake. This was a major philosophical shift for Sun, and therefore a significant challenge.
So what does being market-focused mean in practical terms? Avis says this calls for fundamental changes from the old model. Being market-focused makes a massive difference to what you do. It requires the role of a marketing department functioning within a sales-led culture to be transformed.
Sun has switched from looking at companies by size to looking at vertical sectors. This is not rocket science, but it is revolutionary in enabling Sun to understand who its customers are, what their needs are and how to meet them.
To achieve this, the old district sales managers, briefed on driving sales in a particular geographical area, have been transformed into ‘business unit managers’, tasked with being ‘accountable’ for a particular economic area. Each has been provided with a vertical market ‘board’ featuring representatives from all departments, enabling them to take charge of all activities required to meet objectives in their sphere of influence.
The word ‘accountable’ is an important distinction: formerly, the district sales managers were described as ‘responsible’ for their area. The buck has been passed.
The second change identified by Avis is a change in the characteristics, structure and make-up of Sun’s marketing department, as well as how it works with sales.
Traditional behaviour was that marketing generates leads, explains Avis. This means success was dependent on a closed loop with the sales function, despite the fact that most leads may have been ignored or rejected. Under this model, sales and marketing were functioning in isolation, not working together to achieve the same specified and agreed objective.
The new, holistic approach requires a different mind-set within marketing, a different function for the team, and as a consequence to a certain extent different personnel, says Avis. Five years ago we took a full-service approach to marketing, with a big team working with an army of agencies producing collateral. The skill set of that department was appropriate to achieving that objective, he says. It required a particular kind of person. Now the marketing team is much more business-orientated.
A final shift of emphasis in Sun’s marketing activity relates to a new emphasis on customer insight, aimed at understanding customers’ needs and empowering marketing to add value. Sales and service personnel are being encouraged to gather and feed back insights gained from customer interactions via an email alias. These often unstructured comments are analysed and segmented and then distributed to the marketing team to assist in the development of value propositions, Avis explains.
Far from being something that Sun pays lip-service to, it is viewed as critical to its evolution and, correspondingly, is treated very seriously. I have appointed a customer insight manager in my team, and this is a very senior person, says Avis, it is not a clerical job.
Avis claims this insight drive is already starting to have an impact, identifying space and power requirements in the data centre due to gradual escalation in concerns over energy issues as a differentiator. The language used to promote the new SunFire server range has been directly influenced by this. We are promoting it as the world’s first eco-friendly server, and the fact that it is cooler, cheaper energy-wise and smaller, he says. Such messages are certainly unusual in the dry world of technology marketing.
Although Avis is enthusiastic regarding what has already been achieved, he is quick to point out that the change process is still relatively new and has a long way to go at least another two years, according to the plan.
He also acknowledges that there has been resistance, and interestingly that much of it has come from within the marketing function. Sometimes marketers are uncomfortable with being part of a bigger team. All they want to do is execute their campaigns, and actually prefer to work in isolation. It can be quite a leap to have to work on the board of a business unit amongst other people. But the whole business is going on a journey, and we have to be totally collaborative and break down barriers.
Lessons have be learned along the way, explains Avis, particularly with regards to ownership of the customer, an issue on which he suggests conflict arose with sales. We have pulled back from suggesting that marketing owns the customer, he says, but adds that the objective is for marketing to own the pipeline.
Avis also claims that sales and marketing interdepartmental co-operation has been strengthened by the success of the first Sun Live event, held last summer at The Brewery in London. Sales people were blown away by Sun Live. It was a fantastic event for them to bring their customers to.
A further, and perhaps more critical, reason for the swift resolution of conflicts from this change process has been because of the commitment to the process and leadership of Trudi Norris-Grey. Avis is adamant that without this, the change process that the company has embarked on would not have even worth been considering. And this applies to other companies. Marketing directors cannot change things fundamentally without support from this very top, he says. You can’t do this by yourself.
Avis clearly has a close working relationship with Norris-Grey, not to say considerable respect for her. This is in no doubt due at least in part to the fact that, like him, her background includes spells in marketing, as well as other business areas including sales. She originally trained as an accountant.
Both Avis and Norris-Grey came to marketing later in their careers, and whilst both have a great passion for it, their view of it has been shaped by their exposure to other disciplines. For them, and marketers like them, marketing is simply a functional tool, which must be mastered and utilised to help the organisation achieve its objectives. It is a means to an end.
I had an aspiration to get into marketing, explains Avis, and I think marketing has come in my direction. It used to be about producing large amounts of collateral. Today, Sun Microsystems’ marketing efforts are tightly focused on helping to drive the business, and Avis plays a strategic role in ensuring this is met.
Whilst this new accountable approach may lack the pizzazz or presence of what has gone before, it will also almost certainly cost dramatically less and is likely to generate better results. If it succeeds over the next three years, it will enable Sun to take back its place amongst the Silicon Valley elite.
Click here to search and apply for the latest B2B Marketing Jobs
