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Russ: This is the BusinessMakers Show heard on the radio and seen online at thebusinessmakers.com. My guest now is Art Saxby, founder and CEO of Chief Outsiders. Art, welcome to the Businessmakers Show.
Art: Thank you for having me.
Russ: You bet. Well, tell us about Chief Outsiders.
Art: Chief Outsiders is a management consulting firm, but unlike a lot of management consulting firms, we don't really focus on selling ad campaigns or strategy decks. We work with mid-sized companies. We go in as a part-time member of the CEO staff, really as a part-time chief marketing officer to help implement the growth plans.
Russ: Okay, totally focused on marketing.
Art: Absolutely, but it's really the broader sense of marketing. It's not just the ad campaign or the website.
Art: We're often called in by a CEO because they've got vision. They know where they want to take the company or they know they need to be moving. They hit really good in one space. They think there's an opportunity to expand into another, or they've got a new product, but they're frustrated. They're frustrated with the organization's ability to implement it. So what they need is someone who can work as part of their leadership team, part of the management team to focus on bringing a market-based perspective to that vision and then implement it. So we usually work as a part-time member of the leadership team 1 to 2 days a week, but over the 6 to 12 months it takes to really bring that vision to life, bring it into market.
Russ: Okay, now how long has Chief Outsiders been in business?
Art: A little over four years.
Russ: Okay, okay, and so how many people, how many CMOs are on your team?
Art: There's 30 Chief Marketing Officers on the team now. Every one of them have been Vice President of Marketing or higher at one or more operating companies. So they're seasoned C-level execs; people whose careers come up in marketing, but on the client side really they're responsible for implementing things, making things happen.
Russ: Okay. How in the world did you attract that many people with that high of a level of marketing background?
Art: It's a great opportunity for marketers.
Art: The challenge we have in the marketing industry is if you get to be the Vice President of Marketing of AT&T, you've hit the top of the game, but you're not doing any marketing. You manage a budget; you manage a department. Also, the average tenure of a Chief Marketing Officer in the U.S. is 23 months. So, you're gonna be the Head of Marketing for AT&T for 2 years; then you're gonna move your family across the country and do it again. So, I've got 2 people on the team who were Vice President of Marketing at AT&T. Some people get to the point in their career where they say, “I know what I do. I know what I love to do, what I want to do, and it's not manage a department or a budget. It's get things done. It's get my hands dirty.” This gives them the opportunity to really be part of a mid-sized firm where they can make big things happen.
Russ: Why in the world is the average life span of a CMO only 23 months?
Art: There's a lot of discussion in the industry on that. It's hard to say. In some cases, for a lot of public companies if they're problems at the top, the CEO knows if he gets rid of the marketing guy, the board will give him another two years.
Russ: [Laughter] Okay.
Art: Others, is you need different skill sets in different life of a company. There are different needs during different times, getting new products rolled out, addressing a big competitive situation, and then once that's done, you need a different skill set at the top of the organization.
Russ: Okay, well it seems for sure at least in the last decade that marketing has changed several times in rapid succession and become a completely different challenge. Now, that's my opinion. Do you share that opinion?
Art: Absolutely. There's things that remain the same, but then there's an awful lot of tools that are very, very different. Some of the things that remain the same are looking at the marketplace from the customer's perspective back towards the organization, understanding where the company should be going, how to modify the products and services to meet the needs of the customer, and then take it out to the market. The things that have changed are the tools and the things you use to do that. Market research used to be very expensive and take a lot of time. Now you can do it quickly overnight.
Art: Communicating with customers used to be a one-way street. Now, it's a two-way street.
Art: But the basic strategic understanding of where do you lead an organization, how do you lead it from a market-based perspective is the same. It's just the fun tools we use, which are the last part of marketing. Those things have changed.
Russ: Okay. You know you talking about the amount of change and particularly the interactive part of the way that it works now with customers reminded me I have history - I entered the business world in the sales side of the house. It seemed to me once the interactive world developed, the way between sales and marketing got much more favored in the marketing direction. Marketing seemed much more important. It seemed much more capable of actually winning transactions and sales seemed to diminish. What do you think about that?
Art: A lot of times dealing with mid-size companies - because we target companies generally with revenue of $10 million to $300 or $400 million - there is some confusion on what is marketing versus sales?
Art: My opinion is sales is responsible for selling what's in stock. Marketing has got two jobs; figuring out where to take the company next, what's the next big move? What's the next big product? How do you adjust on changes in the marketplace? But then also giving sales the tools they need, the lead generation, giving them the tools to make sure that they're hunting in the right direction, they've got the right ammunition. The best sales person in the world can't bring home dinner if they're shooting blanks at decoys.
Russ: That's true.
Art: Marketing's job is to figure out where should they be hunting and then give them the ammunition to get it done.
Russ: I like that. So probably the most famous CMO that we have had on the Businessmakers Show is Jeffrey Hayzlett when he was at that position with Kodak. I think he was actually brought in to try to help them convert to the digital world.
Russ: He was passionate about it. He seemed very effective, but at the end of the day I think it was a mountain too high to climb and we've seen Kodak has kind of dwindled. Share with us one of your specific examples that you or somebody on your team did where they were brought in by the CEO that said, “We're perplexed. We think we have great products. We think we have it figured out, but we're beginning to think we have a marketing problem.” Share a sample.
Art: A good example of a challenged industry would be the newspaper industry. Well, the Dallas Morning News is one of our clients.
Art: A very challenged industry. They brought us in looking at a specific area; their single unit sales at supermarkets. The challenge they've had is they've always approached it as, we sell newspapers; we spend all our time developing the content. We approach it from the market-based perspective looking at what happens in a story when someone is looking for a newspaper and why is it that some stores sell an awful lot of newspapers and some stores sell less newspapers? We've developed a program with them, worked with some of the retailers to experiment it, and got a 300 fold increase on their sales in single unit sales in supermarkets. By approaching it not as a newspaper selling content, but as a marketing person saying, “What's the right way to merchandise this? What's the right target? What stores should you have this thing up front? What stores should you have this thing from behind the countertop? The marketing challenge is often understand what the marketplace needs, understand the customer, and turn that around for the company.
Russ: Very interesting. Talking with Art Saxby, founder and CEO of Chief Outsiders, and we'll be back with more with Art after this. This is the Businessmakers Show, heard on the radio and seen online at thebusinessmakers.com
Russ: This is the Businessmakers Show, heard on the radio and seen online at thebusinessmakers.com. Continuing on with Art Saxby, founder and CEO of Chief Outsiders. Now, Art, I'm impressed with the size of your team. Describe some of your team members.
Art: Well, everyone in the company has been a Vice President of Marketing at one or more operating companies. These are seasoned C-level execs who really focus on implementing things, bringing them to life. What's really exciting is they come from such a broad variety of backgrounds, some of the most interesting people in the world. One of our people, Joe Grace - many years ago as many marketers, Joe was out of work. He was into fitness equipment, so he bought some fitness equipment. He couldn't figure out how to market it, so he hired an out of work actress that no one wanted to work with, filmed a commercial in his garage, bought some remnant TV space and, dang, if the Suzanne Somers Thighmaster didn't take off.
Russ: [Laughter] That's what it was?
Art: He invented infomercials.
Art: Fast forward many years later, he's Chief Marketing Officer of WebMD. He was president of a division of a drug company they sold to Novartis. Joe is passionate about marketing, passionate about consumer marketing, passionate about health and wellness, and he absolutely loves what he does.
Russ: Okay, now consumer marketing, does that mean that's what most of the people on your team focus on, consumer marketing?
Art: Actually, most of the people focus on B to B marketing.
Art: We've got people that range from the Chief Marketing Officer of Kodak Health Imaging. So, medical technology, medical imaging. He's also been Chief Marketing Officer of Smith & Nephew Orthopaedics. We have people who are Vice President of Marketing at AMD Microchip or ADP, the payroll services company. We started in Houston, so we have people who came out of Haliburton and Schlumberger. So our people in the Southeast were more industrial-focused. In the Northeast, more healthcare-focused.
Russ: Okay, well this example you had of the healthcare guy, does that mean that that's all he focuses on for Chief Outsiders is medical marketing?
Art: Well, we've found that sometimes the best solution for the client is to have someone from that industry.
Art: When we talk to a client, we'll try to figure out who is the right CMO to put on the project.
Art: Sometimes it's a function of location. They really need someone in that town, in that city where you have a lot of face time. Second generation companies often really want that face time. Sometimes it's someone who comes from that industry. Often, the best fit is someone who has solved that business problem in a very different industry. They might have helped a company take its technology and expand away from where they were strong and even apply that to multiple industries.
Russ: Okay, so you have people, CMOs on the Chief Outsiders team all over the country?
Art: At this point, we have 30 Chief Marketing Officers. They are either partners in the firm or working to become partners.
Art: This is what they do. They work exclusively with us, through us, and we're growing. We've more than doubled each year, and it's been exciting.
Russ: Okay, now, this idea that sometimes you'll have somebody that's in an industry, but they might be best to serve a different industry based on the problem that you're trying to solve, who makes that decision? Is that your shot to call?
Art: When we talk to the client, myself and the other managing partners, try and figure out who is the best person that's gonna fit. Once we look at that, then we'll bring that person in to talk to the CEO and let them discuss, figure out who is the right person. A good example in Houston, Sharon Fortmeyer-Selan. She came up through AT&T, Bell Labs, Compaq. She was Vice President of Marketing at SunGard, IT services selling the software for oil traders to do their trading thing. Some of the clients she's worked on with us was $100 million industrial trucking company. They sell industrial lubricants. That CEO said, “We know we need to move, but how do we move?” He said, “When I go out on the management team table and say, 'Where should we move next?' Sales says, 'Well, find more stuff we can sell to our customers. They love us.' Operations said, 'Well, find more customers that like what we do because we're great at it.'”
Art: So there's gotta be a way to evaluate what market to go into next. That's one of the things she's really good at. Her other clients included Insperity, a publically traded energy consultant company and a company that makes designer proteins, makes proteins for medical research.
Art: Really different businesses, but they all rely on her full career worth of experience looking at a marketplace, evaluating what the company is good at, where should it go next, and then helping them actually get into those markets.
Russ: Okay, now from what you've described, I would assume that CMOs like to join you because it sounds like you're actually bringing them prospects and clients?
Art: There's a couple of reasons they like to join us. One is they get to be on the leadership team of two or three companies at once. It's always new to them. Because they're not getting sucked into the day-to-day fire drills of a company, they can help lead those big strategic initiatives one to two days a week. So they get to keep things fresh. The other thing is we've assembled a team of people who really love to learn, who want to keep learning. So, the culture of the company allows them to really learn from each other. We have a peer review every quarter where each CMO has to present back to the other CMOs their marketing strategy. So they get to discuss and debate and see what's happening in healthcare, what's happening in IT. The fact that they are surrounded by really smart people who can help them on projects, who can ad hoc ask questions, or they can bring into projects allows them to keep learning from each other and be really successful at what they do.
Russ: Cool. Now, you're implied that some of them are partners and some of them are working. I assume you're structured like a normal professional services organization?
Art: Yup, we're an LLC, similar to a lot of accounting firms and law firms.
Russ: Right. Well, I'm real curious what triggered the idea to start Chief Outsiders? How did you know this would work?
Art: Well, my background was large corporate. I came up from marketing in Frito Lay, Kellogg's, Coca-Cola, Compaq when I thought tech was the place to be. I then got involved in turning around troubled companies. I went into Imperial Sugar as part of their turnaround team after their bankruptcy. I was the Vice President of Marketing, the second person that the turnaround CEO hired, and realized you can take the big company strategy; not just the cool marketing stuff, but how do you lead a company based on the market dynamics? Where the seven years I spent with Coca-Cola, I did great things, I was never able to double the size of the company. You take that type of leadership, you apply it to something like Imperial and we did a lot of things right. I wasn't the only one there, but we got the stock from $1.00 to $35.00 in a little over 4 years. So I went and did that again with a private equity company in California. It was before bankruptcy in that case. The companies I can have the most fun with, that I can really use my passion and my career and my skills are these mid-sized firms. But unless there's a crisis, they can't afford to hire an executive level VP of Marketing. But if you don't get sucked into the day-to-day fire drills, you're focused just on the strategy initiatives, you can do it one to two days a week as long as you're part of the operating team, in the CEO staff meeting, working with operations over the 6 to 12 months. So they can afford to do it because they don't have to pay for all of you. You're working 2 or 3 companies at once.
Russ: Interesting. So what's your vision five years down the path? Are you gonna expand beyond CMOs and maybe CFOs too or CTOs?
Art: We have a lot of conversation about that and we think focus is a very magical word. We use it with all of our clients. We're gonna stay focused on Chief Marketing Officers. Now, the vision is $100 million U.S. firm and international expansion. We see this can work anywhere in the developed world where there's midsized companies that have a passion. They want to grow, but they need someone to help them actually do it; not just tell them what they should do, be part of the team to make it happen. There's marketers who have spent a career learning these skills who really love getting their hands dirty and making it happen. So, $100 million U.S. firm, international world travel.
Russ: Okay, good luck.
Russ: Let's just say we've got somebody watching right now that says, “Man, I want to join that organization,” or a potential prospect, “I'm interested in hiring a CMO from Chief Outsiders,” they find you at chiefoutsiders.com?
Russ: All right.
Russ: Well, Art, thank you so much for coming in and sharing your exciting story with us.
Art: Well, thank you very much for having me.
Russ: You bet. That's Art Saxby, founder and CEO of Chief Outsiders, and this is the Businessmakers Show, heard on the radio and seen online at thebusinessmakers.com.