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              Mike Harrison
         Chief Brand Officer


             Craig Hayman
          General Manager
           Industry Solutions

                                 On January 13, 2011, Mike Harrison,
                                 chief brand officer of Timberland, and
                                 Craig Hayman, GM, industry solutions
                                 at IBM, met in Manhattan, at Argyle
                                 Executive Forum’s CMO Leadership
                                 Forum, to discuss socially responsible,
                                 sustainable marketing.
A r g y l e Co nv e r s a t i o n s
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January 13, 2011

 Mike Harrison                      Mike Harrison has been Timberland’s chief brand officer since July
                                    2009, responsible for the design, development and marketing of
                                    Timberland footwear, apparel and accessories worldwide. In this
      position, he reports to Timberland president and CEO, Jeffrey Swartz.

      Mike joined Timberland in 2003 as senior vice president and general manager of Timberland’s
      international business and his role was subsequently expanded in 2005 to senior vice president
      of worldwide sales and marketing. In 2006, Mike became president of Timberland’s CasualGear
      division, responsible for men’s, women’s and kids’ casual footwear & apparel, and in 2007 was
      appointed co-president of the Timberland brand, with worldwide responsibility for the all the
      brand’s product and marketing.

      Prior to joining Timberland, Mike was a consultant at Telos Partners Ltd., a business consultancy
      specializing in sustainable strategic and organizational development. Prior to Telos, he worked for
      16 years at Procter & Gamble in a variety of marketing, operations and general management roles
      in Europe, Asia and the U.S., including as president of Max Factor KK (Japan) and vice president
      of western Europe cosmetics & skin care products.

      Mike is a graduate of Cambridge University and holds an MBA from the Wharton School of
      Business at the University of Pennsylvania.

 Craig Hayman                       Craig Hayman is the general manager of the industry solutions, IBM
                                    software group. As general manager, Craig has oversight for a business
                                    unit focused on delivering high value, integrated solutions that enable
      better business outcomes for clients by building smarter industries—a portfolio which includes IBM’s
      industry frameworks, enterprise content management solutions, and industry solution products.

      Prior to this assignment, Craig was general manager of the application and integration middle-
      ware (AIM) business unit for IBM software group—an organization of more than 8,000 software
      development, marketing, services, and sales professionals. He was responsible for IBM’s WebSphere
      portfolio and other strategic middleware technologies, including web application servers, transaction
      and messaging systems, business integration technology, e-commerce servers, and industry-oriented
      middleware solutions.

      Previously, Craig was vice president, WebSphere, with responsibility for AIM software development
      and portfolio responsibility for business process management, connectivity, application infrastructure
      and datapower. He has held numerous leadership positions in strategy, development, and customer
      support across IBM software group, including RFID, client technology and voice solutions.

      Craig joined IBM to work on XML standards to represent objects in transactional systems. He co-led
      the revamp of the IBM development tools and the resulting WebSphere Studio product line which was
      launched in 2001 together with the underlying development environment

      Prior to joining IBM, Craig co-founded an enterprise tools vendor after holding IT positions at British
      Telecom and Credit Suisse First Boston. He holds a Bachelor of Science degree in computer science
      and electronics from the University of London.

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January 13, 2011

  CRAIG HAYMAN: There’s been an astounding transformation, to focus on the eco-consumer,
  that’s gone on over the last two years at Timberland. What triggered that change?

  MIKE HARRISON: Part of it was driven out of necessity for change. Our business had been
  growing steadily for 15 years primarily on the basis of international expansion, and in the U.S.,
  because of some fortuitous trends in our favor. But about four years ago, the winds shifted against
  us. We really had to dig deep and figure out how to create demand. In doing that, we reached back to
  what the brand had always stood for. We went back to what we’re known for, which was an authentic
  outdoor brand with a very strong heritage of social responsibility and environmental sustainability. So,
  out of necessity, we made a decision to refocus on our strengths.

  How did you bring together your team to focus on this single endeavor?

  That’s a good question. First, we
  consolidated the team. The business, “We created a brand presentation of what we
  as it grew, had become very siloed. We call the Ten Truths of Timberland. This helps
  said, “We want a brand.” We needed to everybody—whether they’ve been with the
  pull the marketing and product teams
  back together and think about the brand
                                             company a week or 20 years—get on the
  rather than a segment of the brand. In same page regarding what we stand for and
  addition to the consolidation piece, there when we’re at our best for the consumer”
  was a rediscovery piece. We needed
  to remind ourselves what we stand for as a brand. Part of this was connecting with consumers and
  reconfirming that they still saw Timberland as an authentic, sustainable outdoor brand. The third piece has
  been internal inspiration and education of our brand-building people worldwide. We have a very disparate
  network of brand builders at Timberland—not only central groups that do product and global marketing but
  also local and regional marketing teams in different countries. We have a lot of partners, distributors and
  franchises, so it’s very important that we have a common language. We created a brand presentation of
  what we call the Ten Truths of Timberland. This helps everybody—whether they’ve been with the company
  a week or 20 years—get on the same page regarding what we stand for and when we’re at our best for the
  consumer. That process is still ongoing. It’s the way in which we’re making sure that the team is focused,
  inspired and educated by strategy.

  Timberland has been involved in tree planting long before it became a cool thing for
  corporations to take part in. Can you say a bit about the effort that’s underway in China?

  A group of Timberland employees in Japan wanted to address the deforestation issues in the nearby
  northeast of China. The lack of trees there causes problems with air pollution and dust storms. They
  developed a partnership with an organization called Green Net to create what’s come to be known
  as the Timberland Forest. The program started in 2001, and in 10 years, we’ve planted over a million
  trees. It wasn’t until six years into this project that we finally got around to selling stuff in China. Our
  values were creating a relationship even before we thought about doing business. This is a great
  example of the strength of Timberland’s culture, going all the way back to the founder, Sidney Swartz.

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    His son Jeff is now the CEO. We’ve always believed in doing good as well as doing well. This notion
    of giving every employee 40 hours of paid time to volunteer in their community has inspired all sorts
    of wonderful efforts around the world. Some of these efforts have no relevance to the business, but
    others, like this Horqin Desert Project, turn into inspiration for a global campaign.

    Timberland’s environmental efforts eventually became a core tenant of the Earthkeepers
    campaign. How does that connection, from local activity to global campaign, happen?

                                                              There was a very strong desire to find a way to
       “There was a very strong desire make our values, particularly in our environmen-
       to find a way to make our values, tal efforts, more meaningful and more visible to
       particularly in our environmental consumers. Consumers were becoming more and
                                                              more conscious of the environment, so the tree
       efforts, more meaningful and more planting was an opportunity to help guide those
       visible to consumers”                                  choices. We did some research; we talked to
                                                              consumers around the world. We had something
    like 27 different programs going on, but tree planting was at the top of the list. It was the thing that
    consumers seemed to grasp. It’s easy to understand: If I plant a tree, the world is a better place than it was
    yesterday. In comparison, if you’re talking about carbon-emissions reduction or recycled content, it’s a bit
    harder to be sure it’s meaningful. It also happens that our logo is a tree, so it fit nicely with Timberland and
    the brand. Our positioning is now that our brand, our commitment, is to the environment. This was already
    going on, but everything came together. It all fit, and consumers go, “Yeah, I like that idea.”

    In response to the success you’ve had with the Horqin Desert Project and the Earthkeepers
    campaign, is there pressure from senior management to replicate that?

    Absolutely. We’re pretty proud of the fact that we planted a million trees in 10 years. We launched
    a Facebook application where consumers could plant a virtual tree online and have it watered and
    grown to completion by their friends—and then we would plant a tree in the real world. Once that got
    to a million, we had to start looking for ways to keep up with the commitments that we were making
    to consumers. We’ve now made a commitment to plant five million more, not just in China but also
    Haiti and Nepal. We have projects in those three regions as well as dozens of local efforts. We have a
    sustainable fruit-tree program going on in Haiti, which has so far planted 300,000 trees. We also have
    a partnership with the WWF in Nepal, another area that has a good infrastructure for sustainable tree
    planting. It’s an exponentially growing commitment, but as long as we’re selling more products as we
    plant more trees, it’s a nice virtuous site.

    Ad campaigns come and go; launches come and go; new product introductions come and go.
    How do you keep building on this brand value that you’ve created?

    It’s like good marketing. You have to keep coming up with new insights and new ideas within the
    strategy. We’ve refreshed the Facebook application in the last three-to-six months. We believe the
    tree-planting strategy is going to be long term. We’re always looking for a fresh angle to come back

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    and re-engage on the issues around Earthkeepers and tree planting.

    You weave humor into many of your interactions with consumers. Is that paying back?

    We’ve found out the hard way that consumers get turned off by very earnest discussions about
    environmental issues. They don’t necessarily want to be reminded of these things when they’re
    buying a pair of shoes. They’d rather be engaged in a way that’s a bit more positive, so we try to do
    that. Humor turns out to be a great way to get the message across, particularly in a context where the
    majority of environmental messages suggest that the world’s coming to an end. By coming out with
    tongue-and-cheek ads, we’re saying, “You can do this.” It’s not a great rocket science; it’s just a little
    step forward that will make a difference. Most consumers are responsive to that kind of message.

    There’s this notion of never underestimating the consumers. One data point I saw said they
    don’t believe 75% of all advertising that’s presented to them. Have you found this to be true?

    I think advertising is probably the worst way to tell an in-depth environmental story to the
    consumer. We’ve tried that and learned the hard way. Print ads that go into great detail either turn off
    consumers or make them suspicious. What advertising can do is get them to take notice and register
    the message: “Yes, Earthkeepers is a cool-looking boot. I want one. Also, it’s environmentally friendly,
    which is different than any other boot I’ve seen.”

    Where you can engage the consumer
    much more deeply is on the web. This is “I think advertising is probably the worst
    where the three-dimensional model of way to tell an in-depth environmental
    marketing really comes into its own. You story to the consumer. We’ve tried that
    can no longer just put up a display ad and
                                                  and learned the hard way. Print ads
    make a few claims and sell stuff. You need
    to put up your headline, but then you need that go into great detail either turn off
    to invite your consumers behind the facade consumers or make them suspicious”
    to find out what you’re really doing. How
    many trees have you planted? Where are those trees? Can I see pictures of those trees? Who’s
    planting them? Which factories do you use? What’s your record on child labor? They can go as
    deep as they like; they can engage if they want. We have a blog and we have the CEO’s Twitter
    feed. These vehicles allow consumers and activists to really poke around and make sure that there’s
    substance behind the advertising. An ad that grabs their attention might be enough to sell some
    people a pair of boots, but for the ones who are really serious about understanding more, they can
    interrogate us through the web. This is why the time is right for brands to think about sustainability
    and how it can be part of their value proposition. This is much easier to do than it was 10 years ago.

    You’ve mentioned traditional advertising as well as Facebook and Twitter. What kind of
    process do you go through for determining your mediums?

    The way we think about marketing has definitely changed over the last four-or-five years. We tend to

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    think about seasonal campaigns because that’s the nature of our business. Rather than thinking of it
    like an advertising campaign with a few pieces of collateral, we think about it more like how a movie
    company would introduce a movie. There’s a poster of the movie, which is the headline. That might
    be the window in the store. You’ve got the movie itself, which is how we connect with consumers
    emotionally. Then with our digital presence it’s all about programming as opposed to announcing. It’s
    not a brochure. We see it more like an entertainment channel. You can go behind the scenes and find
    out more. You can “watch the movie,” so to speak. Maybe you’ll see some footage that didn’t make it
    into the movie. You can hear a designer speak about how the products were created, similar to how
    a director might talk about how a movie was produced. We talk about blockbuster campaigns. Every
    season we come out with a blockbuster campaign, which includes all of these different elements
    coming together around a core idea that can touch consumers in many different ways.

    In your retail outlets, many of your associates are passionate outdoor enthusiasts. What role
    do they play in getting out your message?

    We have about 1,000 stores around the world. Some of these we own and some are franchises or
    owned by distributors. These absolutely are huge assets when it comes to story telling and engaging
    consumers. Getting the associates up to speed on the products, and what’s behind the products, is a
    key part of marketing. Usually bundled into the seasonal launches, there will be training.

    Once you have a customer who buys a pair of Earthkeeper boots, for example, he’s probably a
    likely purchaser of a coat or another part of an outfit. How do you target existing consumers?

    We believe the long-term future for Earthkeepers is
    beyond just putting recycled content in our products. “We have a balanced portfolio,
    That’s obviously better than not-recycled content, but we’re relying very much on
    but at the end of the day, that pair of boots might
                                                             the retail channel to be an entity
    still end up in a landfill. Just this last year we’ve
    introduced boots that can be recycled. At the end
                                                             of growth for both revenue and—
    of the life of the boot, or the end of the usage, you equally important—relationships”
    can send it back to us. We’ll take the leather off the
    rubber bottom, recycle the rubber and refurbish the leather. We’ll put it back together again and turn it into
    a beautiful pair of boots. This creates an interesting concept, the idea of lifetime ownership of Timberland.
    It’s almost like a subscription rather than a purchase.

    We don’t have all the pieces in place yet, but we think this will be effective, particularly for high-
    value items like boots, bags and jackets—items that people grow to love over time. We could see
    developing one-to-one relationships with consumers in the future. We’ll need the technology to help
    us do that, but it exists. This is also one of the reasons why having our own retail stores as well as our
    ecommerce business is so important. It allows us to own the relationship with the consumer in a way
    that you can’t always achieve when you’re selling through third-party retailers. We have a balanced
    portfolio, but we’re relying very much on the retail channel to be an entity of growth for both revenue
    and—equally important—relationships.

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