Newell Rubbermaid Shakes Up CMO Model By Putting Research in Charge
Richard Davies Veers From Tradition, Trimming Staff, Shops and Emphasizing Consumer Insights
What happens when a market-research guy takes direct authority over all marketing decisions and marketers? Newell Rubbermaid is finding out.
Since Richard Davies became Newell's chief marketing officer 14 months ago, he's instituted big changes for the company that markets such brands as Paper Mate pens, Graco baby products, Rubbermaid storage products, Calphalon cookware and much more. He's consolidated marketing staff and agencies and given unprecedented authority to an expanded and independent research group.
Newell's marketing headcount is down 20% during Mr. Davies time at the helm and located in fewer sites. And Newell has gone from 65 marketing-services shops to six, which includes creative agency , media shop and four research shops.
Despite the culling, the company opened a 130-person marketing floor at its corporate headquarters in Atlanta along with growing outposts in Shanghai and Sao Paulo and a center for writing instruments in London. And Newell has roughly doubled its market-research staff to more than 20 and seen a similar rise in its overall spending on research. It's also preparing to ramp up spending on media.
Now comes the hard part: proving it all works, especially since the approach is in many ways at odds with standard practice at big multibrand behemoths like Procter & Gamble Co. and his alma mater Unilever.
When Mr. Davies was lured to Newell by CEO Mike in late 2012, he quickly saw the need for change. Former CMO Ted Woehrle was in charge of developing capabilities, processes and training, but the marketing organization had no central authority. Instead it was divided up among business units that controlled their own marketing budgets and decisions.
One consequence, Mr. Davies said, was "a lack of investment in consumer understanding," with some brands relying on consumer-habit studies that were 10 years old. Marketing people and spending also weren't aligned with company priorities such as growing in Asia, Latin America and writing instruments.
By consolidating into a single marketing department, Mr. Davies said he could increase "consumer insights" spending while reducing spending overall.
By consolidating into a single marketing department, Mr. Davies said he could increase "consumer insights" spending while reducing spending overall.
"I've got people in fewer places and can move them to work across categories," Mr. Davies said. "I can offer career advantages more easily. We can move approaches that work in one category much more easily into others."
The consolidation also made it possible to trim agencies and attract the likes of BBH and PHD, which never would have considered a $250 million account divided among so many category and country fiefdoms as the old Newell had, Mr. Davies said.
To find those agencies, named in October following reviews, Mr. Davies rejected the conventional pitch process he finds "a complete waste of time and agency resources." Instead, he talked with agency leaders about such things as "what makes great advertising and what work they've done it the past they're proud of and what could be improved."
Part of that is based on Mr. Davies theory that "any big agency can hire great talent. It then comes down to the quality of the leadership. How do they want to work with us? How do they find us as a client?"
Making that process easier was that Mr. Davies was the decision maker. "My predecessor was responsible for marketing as a capability, developing skills and training," Mr. Davies said. "I look after that, but I also look after the day job of marketing. I'm responsible for the advertising and mix development. And that's really helpful, because as we develop new approaches, processes and techniques, I don't need to persuade people to do it, that it's a good idea. I can tell them to do it."
Should that be the model, rather than the one of CMO as influencer in many big multibrand companies?
"Certainly for a company our size, we don't have the time to go around trying to influence people that this is how they should do things," he said. "Maybe some of the bigger companies don't have the time either. I don't know."
Perhaps an even bigger departure for Newell's marketing department under Mr. Davies is the unprecedented authority for market research, which also reports to him. While Mr. Davies wants product concepts and ad ideas tested with consumers, he's also given researchers authority to tell marketers an idea isn't even worth testing yet.
Mr. Davies believes such power should be the rule rather than the exception, because researchers are the voice of the consumer. "You lose count of the number of companies who claim the consumer is boss," he said. "But the question is do they really make the consumer the boss or not? I think by having a strong, independent [research] function you're a hell of a lot closer to doing that."
Of course, the market ultimately will judge. Mr. Davies pointed to market-share gains after Newell research showed the importance of a free-flowing pen to consumers. That translated last year into Paper Mate InkJoy pens, backed by heavy sampling combined with TV ads focused on how easily the pen flows.
Newell parlayed another insight -- that Brazilian construction workers were spending too much of their hard-earned cash on saw blades -- into a two-sided replacement blade from its Irwin tool division, which was also backed by heavy sampling.
"These are encouraging signs," Mr. Davies said. But he acknowledged: "2014 and 2015 will be the acid test."
