Gartner, Inc. (IT) Earnings Call Transcript & Summary

Hello, and welcome to the Gartner webinar. CMOs bridge the gap between marketing strategy and operations. This presentation will provide actionable objective insight, expert guidance and solutions that enable faster, smarter decisions and stronger performance on your most critical priorities. I'm Kelly, your moderator for the session. Before we get started, I have a few tips to help enhance your webinar experience. Around the video player, you'll find a variety of ways to interact with the session. We encourage you to participate by clicking the Ask the Speaker box to submit your questions and thoughts throughout this program. You can either submit a question anonymously or if you choose your name, title and company can be visible along with your question. To download a copy of the presentation slides and other helpful resources just navigate to the bottom of the page. Throughout the program, you can rate this session and share feedback on the insights provided. To submit your rating, locate the Rate Session link below the player, a box will open for you to select 1 to 5 hearts. Please note that 5 hearts is the top rating. Share your feedback on the insights provided and there'll be further feedback box and click send. This webinar is being recorded. You can watch this presentation again and find more great insights on demand at gartner.com/webinars. Now I'd like to welcome Gartner Vice President analyst, Michael McCune. Michael, thanks for joining us. And now I'll turn it over to you.

Thanks so much, Kelly, and thanks to all of you for having some time to spend with Gartner today. I'm really excited to be able to bring you our guidance related to how to bridge the gap between marketing strategy and operations. But even before we go any further there, I want to just set it in place with 2 other themes that are really important to us into the CMOs that we're bringing guidance to. Now you can see at the top here bridge marketing strategy and operations, we're diving into that today. But 2 other pillars or anchor the guidance that we give CMOs across 2025 about how to get the most out of the activities that they're driving in their organizations. Now we won't have time today to talk about differentiation or journey orchestration. But it's important to know that bridging marketing strategy and operations, while important, is not the only lever that we're advising CMOs to pull. But it is the one that we want to go into today because it is most pertinent to accomplishing our goals in the era that we're operating in. Now that is the era of the new less or in the way that most CMOs are hearing it, they do more with less, or do more with the same era. At the left-hand side, you see a quick view of marketing budget trends, and we'll come back to the marketing budget overall in just a moment. But what I wanted to say here is that when we think about doing more with less, we often think about how can we change the way marketing works, right, in order to become more efficient. It becomes one of our key strategies. Maybe it's given to us, handed down to us, but nonetheless, it is imperative, right, that we are figuring out how to do more with less. And so we find that most CMOs need a little bit more help on bridging the gap between that kind of marketing strategy and execution. And so today, I want to take you through 3 key components about how we're giving guidance and what that guidance is for navigating the era of less when it comes to getting more out of the way marketing works. If you're trying to get more out of the way marketing works, are you trying to change the way marketing is functioning, you're definitely likely to spend money on marketing operations in terms of how to drive the efforts to change and transform the marketing function. And if you're going to be doing that, you want to make sure that you're having an impact. And so it brings to light immediately, well, how are we measuring marketing productivity. And if we're measuring marketing productivity, that's great. But we still need to make sure that we're doing the right work. There are other enterprise strategies, of course, that we're supporting. And we need to make sure that what we execute is aligned to those strategies. And so we'll want to dive into that as well. And that's what we'll cover across the time together that we have. And we'll just kick things right off with getting into justifying our spend on marketing operations. And I say justifying because it's getting harder in the era of less to spend money on changing and transforming the way marketing works, and it's exactly the time when we really need to be changing the way marketing works. I said earlier that I'd come back to the budget slide. You can see this carries us from pre- to post-pandemic to last year. We haven't quite recovered at all to pre-pandemic levels. In fact, there's kind of that downward slope. In May of this year, we'll reveal the 2025 CMO spend findings, and we'll understand what the current percentage of revenue is that marketing is getting allocated. But the preliminary data says that we're not seeing a tick back up, it's going to be more of the same. Now the reason it's still valid to talk about the 2024 data is that this is when we started to hear voice from your peers, other CMOs, about why this is becoming an important topic. That's because when we ask them, whether or not they were being asked to do more with less, we could tell that the vast majority of them were. And when we asked them about whether or not they had enough budget to execute their 2024 plan, we already saw a majority of people feeling behind at this juncture. And so it became imperative for CMOs to start thinking about if I don't have enough budget to execute my plan, how am I going to get more efficient? How am I going to get more throughput? How am I going to speed my time to market of my activities in order to be able to get more done across the calendar year? Now that translated into a couple of priorities that we can see on this page. It's interesting to note that aspects of reducing costs and eliminating waste at the bottom of this chart are pretty nominal, minimal in terms of like what CMOs turn to when they want to do something. Certainly reducing cost is possible. You could just do less with less, but that tends to be an unappetizing approach. And we know that CMOs are trying to figure out how to eliminate waste, but it certainly -- it is hard to stop certain programs that are already in play or it's hard to be able to have a way to think about, shall we say, making things more efficient without a clear objective, just reducing waste as a strategy itself doesn't help. And so we see the top 3 there in terms of getting more out of our assets that we do create, fixing our processes or like making sure that we're optimizing those in-flight campaigns being the ones that are dominating that. I will say just -- Kelly, in a moment, I know you put through a question that came from the audience about sort of those splits on CMO spend. We do have splits by B2B, B2C, by industry type, et cetera. So there's more detail always to be shared. I'm trying to keep it more at a high level for what we're going to run through today, but thank you for that question. So when you see the top 3 bars here, what it really means is we're trying to change the way marketing work. And it begets a question. The question is really how much should we be spending on change in transformation, and this is something that has caught our eye because we started asking about this a couple of years ago and have continued into this year. You'll pardon my own sort of like line art here on this slide, but I wanted to be able to sort of convey some shifts or changes that are going on here about how much people are spending on change in transformation as a percentage of their marketing budget. Now we can't go all the way back in time to when marketing started first and foremost, trying to change the way marketing works. But we know it probably didn't start at 0 and it certainly advanced rapidly. But in 2022, when we asked this question, you can see that 31% of the marketing budget was already being put towards change in transformation initiatives by CMOs. That already was alarming to us. That's a lot of money to put towards change, not just because the risk of an effective change is high, but also because change brings fatigue and burn out to staff that are at the front lines of experiencing it. So when we came back to this data point last year and we found that there was even more enthusiasm or shall we say desperation perhaps, given the era of less, CMOs were suddenly pushing more chips into the table and betting that they could change their function more rapidly perhaps. This certainly was too much from our book, and we saw an indication and some preliminary data this year. It's not final data, but that we've come down to, I don't know, a more reasonable level, but at least a level lower than last year's exuberance for spend. And again, this comes back to thinking about what is the right amount to spend on changing the way marketing works. What's wrong with the way the marketing currently works, especially in the era of less if we're trying to actually get more out the door, maybe more business as usual activities would be helpful. Great question in terms of what are we talking about between -- about for change in transformation. Fundamentally, it is related to those objectives of being able to improve the way the marketing gets it's work done. So it could be an insight process. It could be the campaign development process. It could be other elements that we'll look at in a moment. But certainly, it's the expenditure and time investment necessary to reconfigure processes for better outcomes. Just having a sense of how much you're spending on this is important to understand, but more importantly is a conversation that CMOs are having with their CFOs and COOs, which is, okay, thank you for letting me know how much we're spending. But I'd also like to know what our future state is going to be. Now this interface doesn't allow me to do fantastic builds with my great art. But right on to the slide here, we are offering up 4 different scenarios to CMOs to prop their own thinking about what is their future. So you'll see that, that sort of red line that we were looking on the last page is kind of taking us to present day. It doesn't have to be that it was going up or down, but let's just say it was at that dangerously high level of 30% still. What comes next? What's your plan? Where are you going to go with your spend on change in transformation? It doesn't have to be 1 of these 4, but these 4 are worth lingering on for just a moment. The first one I want to speak to is that green dash line that falls straight to zero. These are CMOs that are done with the change fatigue that burn out, the waste of change in transformation that is all a part of the risk of pursuing it. And they're saying, in this era less, what I just need to do is put all my money back into business as usual marketing activities. I'm going to get good enough out of them. I'm going to be able to get more out of them, and I'm going to be able to get more focused effort from my staff. Nothing wrong with that, right, as long as those deliver the results. But just below that one in the legend is the transformative scenario, which is the lighter blue dash line that bumps up and then drops down. These are CMOs that feel the opposite of BAU scenarios, where we want to push all our chips into the table. We're on the cusp of completing change in transformation. And so we need to actually spend more to put ourselves over the hump. Maybe that's what people were thinking last year when they kind of got a little bit more. And then some of them pulled back and realized they weren't as close as they thought. But if you feel like you're close and you feel like this is right where it's going to be, then you can articulate that need for more funds connected to the promise of rapidly dropping them to a lower rate. There's another scenario, the one in orange that kind of looked like what was happening on the prior page. This growth scenario is a little bit of laissez-faire. It says, I think we're growing as an organization, okay, or we're going to find a way to growth. And even if my budget in the nominal terms doesn't increase, right, it will decrease in terms of percentages. And so you can play the game. That's a little bit of risk to just assume that because the company grows, if your budget stays flat, it looks less risky. But I think it is something that people do, do and then the other scenario that is also, I think, a practical reality is that some people realize the change in transformation is actually never ending and that they need to be on a constant execution scenario. They need resources to be -- and have more operational autonomy and independence to maybe do all of the digital operations change initiatives themselves rather than sort of submitting a ticket to IT or engaging with a service integrator on the outside, which can be higher cost and sort of perhaps delay time. So again, not that each of these offer their own silver bullet. These are scenarios to help CMOs reflect in this era of less, how much and for how long are you going to be spending on change in transformation. Now when we talk about, again, this question, what's included in change in transformation, it's the perfect tee up to this next question because a good COO and CFO, well, they've talked to all of the functional heads. They all know all the functional heads are trying to transform, they are very wary about sort of ineffective change. And so they want to be able to ask you about how is it going? They want to be able to say, how are you accounting for change in transformation effectiveness? Now we'll come to a productivity aspect of this in the next section of our time together. But right now, I want to linger on the financial part of this. One of the downfalls of talking about change in transformation, right, in order to adhere to this strategy of doing more with less in the era they're working in is that CMOs or marketing ops leaders frequently pivot to talking about Project A, Project B, Project C. And no C-suite executive has time for this. We have to figure out a way to distill this into cleaner, more holistic buckets about what are the components of change in transformation. And that's the data point that we have on the next slide. Now this data is a snapshot from 2022, but it's going to serve 2 purposes for us today. First, it gives us a little bit of around the circle look at the 6 categories of spend that help us sort of aggregate all the different efforts we're doing and communicate more clearly to ourselves as marketing and also to stakeholders that fund marketing. We see that we have spend on operational marketing technology, right? That is like marketing work management tools, approval tools and things like that. We obviously have a MarOps staff that we pay for. We actually have external support for that MarOps staff in terms of consultant that are trying to help them figure out what's going on in marketing. And then we have training for that dedicated MarOps staff because there probably aren't that -- well, we know not that many people that come in to MarOps came from other MarOps. It's a new role in this function. In fact, it's about 6 years old on average right now. And so I understand these elements here about spend on actually marketing operations and on the work to understand what marketing operations could do. But the [ red ] flag here at the time, perhaps understandable, given that marketing operations was only on average 3 years old when this data came in, is that only 30% of the overall spend on change in transformation was going towards the front line. I would draw an analogy here to thinking about nonprofit and how we judge their efficiency, not always fairly to be sure. But if somebody is spending 40% or 30% of their money on fundraising and administration, we might not feel that enough of the money that we give is going to impact the constituents, our stakeholders that are supposed to be benefiting from the programs that, that nonprofit is -- exists to pursue. Same thing goes here. Maybe it's understandable at a point in time for only 30% of the budget to be directly impacting the front lines. But we better have a plan to expand those 2 sections. We better figure out how to streamline our marketing operation technology. Maybe we overinvested in staff, maybe that has to stay the same. Maybe we've learned a thing or 2, have been able to assess our own organization, don't need as many external consultants to help our dedicated MarOps staff understand what's going on. And maybe our MarOps staff gets their footing and they don't need as much training on how to be like good process improvement managers, changing transformation managers, et cetera. So we can shrink the blue ones and increase the footprint of the training and upskilling for marketing staff and the external support for helping them change the way they work that's absolutely necessary in order to route and bring through solidify the change in transformation that we want to see. So this is the financial aspects of aligning to this new era of less, the strategy of being able to do more with less should always probably involve some aspect of managing change and transformation to improve the way marketing works, right, because we want to be able to deliver more of that budget that we have, right, to ever more efficient and effective marketing programs. And it's going to take a change in transformation management to do that. We need to be able to talk in a clear, concise way about how we're trying to make that happen with the stakeholders that might be approving the funds, or our own team if we're going to like shift our strategy about how much appetite we have for change in transformation in our function. Now if you're going to pursue change in transformation, obviously, it's to improve the efficiency and effectiveness of marketing operation -- marketing organization. And so that brings up our second key issue here, which is how do we approach measurement of marketing productivity in the first place? Now Gartner is pretty clear about this when it comes to thinking about the KPIs that should be associated -- with the KPIs that should be associated with operational performance. And you can see the 6 listed on this page here. Certainly, everybody talks about capacity. We want to stay aligned to other strategies and make sure our execution is connected to them. We want to make sure that we're shipping product on time. We want to make sure that it's air-free and that our business stakeholders are satisfied with that. And of course, we want to be able to make progress against goals. I think putting -- getting clarity sort of on the main 6 KPIs that we see CMOs getting value from is fantastic, but we need to be -- have -- give ourselves a way to sort of self-reflect on which one of these is the one that we should pursue. Each KPI, right, has its own journey of being defined, composed, a road map for improving, getting it used, making decisions by it. So to run at doing 6 is probably too much. We did a piece of research where we wanted to compare what marketers thought were the most important KPIs with which KPIs correlated the most with the outcomes that marketing is pursuing, which would, in this case, was an index of acquisition, retention and growth of customers. And we can see, although it's slightly grayed out on this slide, that on the left-hand side axis, where marketers are perceiving, right, the influence of KPIs, they're prioritizing consistency, progress and quality. And I think we understand why, right? There's something we feel very directly if we have errors in our work, if we're not making progress against goals that we set for ourselves, people get -- team managers start talking to us. If we're talking about whether or not the quality of the work was to the satisfaction of the business stakeholders, maybe we have an internal NPS score and it goes down or maybe they just use their voice and cause trouble for us. So there's certainly KPIs that can have value and may add value for you. But in general, they indexed more on the perceived importance rather than the correlated importance with business outcomes. Those that correlate with the business outcomes were whether or not what we did was actually aligned to enterprise strategy, whether or not we were doing things in a timely manner, whether that's starting work and completing work or whether that's acknowledging a request for work and finally deploying that work and then, of course, capacity itself. Capacity certainly is talked about. It's a very difficult number, right, to be able to compose in your organization. And so our focus more has been on timeliness in terms of helping people sort of anchor their efforts on a KPI that could be correlated with operational performance measure. And so when you think about that, let me just click over to the next slide, the element that comes out is not just like I want this KPI, but like basically, I need a baseline. I need to understand what my current measurement, what my current state of a KPI looks like. And I want to share with you an example that came from Mutual of Omaha, which we feel is really replicable when it comes to using time or time stamps even in order to create sort of a look back or retrospective of how productive we've been and how productive we're becoming. There's a lot on this slide. I'm going to let us marinate in it for a second. I just want to give you some guidance on what you're looking at. If you put your eyes across the bottom, you'll notice that we're going to be looking at a 13-month range here. So an opportunity at Mutual of Omaha to get year-over-year data on productivity. And if you see the left-hand side axis, it says total projects, that's represented by the bar charts. And the bar charts themselves are broken down to projects that are currently in progress, completed in that period, carried over from a prior period and completed, or carried over from a prior period and still in progress. And across the top in that orange line, they have a pretty blunt measure of productivity in terms of projects per full-time employee. Now you look at this chart, and you really think, well, there's a lot of data on this chart, but it really just comes from 3 sources. It comes from knowing when they started a project, knowing when they completed the project and knowing at a point in time, how many people worked for them. Those aren't necessarily difficult data points to get. They may exist across different systems, and it may take a little bit of effort even to bring them together, but when we looked about what they did was how simple they kept it and how rewarded they were when they were able to plot that data onto charts like this because right away, they found themselves looking at a type of mirror, maybe not a perfect mirror, but certainly not a fun house mirror either, right? They were able to look at this and say, in the light blue bar, gosh, why is there so much carryover work? Why is it so much work that was going on last month, still go on this month and still persist in the next month? And why is it so hard to complete a project that was started this month within the month? Or why is there these dips in productivity as you want to say it like that, where we have high points and low points. Maybe there's an -- is there an opportunity to pull forward work where we might not be completing as many projects and we have so many projects to do later. What would the impact beyond that for our actually month-by-month trending of projects per FTE? These are all questions that immediately started to be talked about. This is a power of self-reflection that comes from data. We still just need to make sure that we're able to be able to put this in place. I see a good question coming to hear about like Net Promoter and return on sales, not part of KPIs. So return on sales is a completely different conversation about the effectiveness of marketing. It gets into marketing attribution modeling and market mix modeling, which have different applications for B2B and B2C. And it certainly is -- can be a measure. But even then in this era of less, right, while that can be a way to have more impact, right, there's still this desire of like, what's the right amount of work that we can get out of the resources that we have. And in fact, one of the origin stories for why Mutual of Omaha, which is a documented case study on our website, so I'm not giving away anything that's proprietary, is that they were looking at their productivity, and they realize the cost of talent is never going to stop rising. And we can't just let productivity exist at its current levels or at the very least, we have to have some improvement in productivity in order to know whether or not we're going to beat the rising cost of talent over time. So putting this in place, that was important to have that red line for certain stakeholders in order to say, how much more productive are we getting per year. And in fact, this became an interesting conversation that was going on, which if we were actually organically, through the good work that we normally do without like major change in transformation initiatives, going to experience some type of improvement just through the way that individual humans try to do better at their jobs day by day, then we may have like an organic improvement in productivity that compounds year-over-year. So if we have that or if we think we have that or if we can track that, we should be more judicious about what change in transformation we're going to get because it certainly could get in the way of organic improvements of productivity and certainly can distract from those types of efforts and we want to make sure that it's going to at least beat whatever our organic optimization is in order to make sure it's worth it because of the aspects of change, fatigue and distraction and burnout that can occur from managing change or living through changes of work. So again, we put this up there on the screen because when we talk about trying to manage towards productivity to do less with more, right, we have to wind up having sometimes a baseline, some type of way of getting at this. Timeliness has been the most consistent data point that people have in their systems, and it has turned out to be something that even with the most simple set of data can be a powerful way to self-reflect on what is going on in your organization, even if it's not happening or being able to cascade down to the most granular data set possible. Now even when you have this, we have the question I was just alluding to, like, how should we improve marketing productivity, and I want to bring this back to something that this is one of our research teams. It's one of the areas that we're trying to go deeper in. So I want to share a little bit of work we've done on a specific aspect of work that marketing does and thinking about how it can be more productive. That type of work is cross-functional collaboration. It's something that all marketing is doing, whether it's in data, it's in technology. It could be on content operations as we try to think about how product information flows from one part of the organization, say, like a PIMS into an e-commerce tool or into something on another part of the website or in some type of product split that we have. There's a lot of different kind of cross-functional collaboration efforts that are done under the auspices of change and transformation. And all of them experience, what we call collaboration drag, which is, of course, the efficiencies of trying to figure out how to collaborate across functions towards a common objective. And I'm just sort of giving this more of a short treatment in the time we have here together, but what we observed in talking to marketing functions is that, on average, 2/3, right, experienced collaboration drag across their cross-functional initiatives. And when they try to solve for collaboration drag, we were able to distill their solutions into the 7 that you see portrayed on this screen. Not all of them are under the control directly of the marketing function. Some of them themselves are like cross-functional collaboration efforts to solve cross-functional collaboration drag, how the entire company works, whether or not marketing works well with other functions, there's cross functional roles and teams, especially in, say, commercial functions. And then, of course, can marketing solve collaboration drag by focusing on how itself works internally. And I bring this up because there are a lot of things to be distracted by when it comes to cross-functional collaboration. And just as the productivity measure creates self-reflection to know yourself to understand where you might have issues or bottlenecks or whatnot, the research on a cross-functional collaboration drag also showed that the most and only efficacious path to improving collaboration drag was to focus on investing in your own processes and people. Now I might sound like a little uncollaborative because marketing certainly has a collaborative gene. But when it comes to thinking about improving the way marketing works, the payoff tends to come from focusing on marketing itself, not how marketing is interacting or influenced or affected by other organizations. There's a lot of different changes that we could possibly make. And what this research was telling us and telling our CMOs is that it's okay to be a little bit more myopic when thinking about the issues at hand. And that really, it's really our workflows that we control. It's our talent that we can invest in developing. And it's actually those out of all of the others -- as supposed to the other 5 that are the ones that are going to have an impact on reducing that collaboration drag, helping marketing itself be seen as a better partner for those projects actually to move forward better, faster with better outcomes. This is, I think, a critical finding when it comes to thinking about doing more in an era of less and thinking about how many issues there are, that are a part of an enterprise-wide initiative. And while we may need to participate in them, we need to also think about making sure that our way of participating in them, our way of interacting with them is under our control and that we're able to improve them. And I think this is a tea-leaf reading here for sort of wider hypotheses that we have, and we'll be testing this fall in our research about where and how marketing goes about driving those change in transformation projects that they're spending money on. The question there in terms of like the sourcing of the 22 surveys and studies. We have -- that's all done from primary research with samples of businesses in North America and Europe. And so I just wanted to sort of speak to one of the questions that I saw coming through. And that's -- aspects of that research will be updated this fall as we do another organ ops survey that is related to how people are being able to manage themselves to change and improve the way marketing works. So this is just like, of course, you can only do sort of one study at a time. This is one of the fresher pieces of information that we have. I would also say that we -- it sort of brings us to the sort of final key issue area where we want to think about. It's not the only thing that marketing is doing, right? In the era of less, we absolutely need to think about how much we're spending on change in transformation. We need to figure out our KPIs for operational performance measures and be able to bring them to the floor as quickly and as simple as possible in a way that manifests with -- cause is self-reflection, which is the first step in being able to self-help as it were. And that self-help actually does work when we look at some aspects of research where we've been diving in and trying to help marketing gain more focus and impact from its changing transformation efforts. But there are other things to do here, right? There are other strategies that enterprise has that align to growth, and we need to make sure that we are supporting them that the work that we're executing right is aligned to those other enterprise strategies. And so this comes back to a core question of prioritization. Now this is in sort of large orange here because I'm trying to echo what we hear from CMOs, right? We need to prioritize our work and they try to cascade that down through their system. There are challenges that underpin why they want to prioritize work. But really, I think it's fair to be honest and ask this question, which is not just how does marketing products work, but actually can marketing prioritize work? Can marketing really say no to work? Are you saying no to work? Or are we just triaging on a first in, first out basis? Or are we trying to maybe schedule work according to how much of a priority it is, and then perhaps rescheduling that work when certain stakeholders or loudest voices, our biggest budget people get upset about when their project is going to be taken care of. That's really not prioritization. And so our guidance doesn't necessarily get into how to say no. Although I am going to talk about how one of your peers says now in just a few minutes. Our guidance falls into how to understand the way to route work to the right resource, which can be internal or external. And that comes down to a framework that one of my colleagues produced, which has to do with tiering of work. Now again, this environment doesn't allow us to build, so I know that the lot just showed up on the slide in front of you. Let's focus for a little bit on the left-hand side of the screen here, where you have 5 quadrants of work in each one, call it a tier. And you can take a look at the different components of this. But what really matters here is thinking about for any tier of work, what resource should be doing that work, right? If we're doing let's go with the Tier 1 launch work, right? If we're doing some work here, it's go-to-market critical, it's absolutely aligned to our business goals. In fact, it's about planting a flag, earning a new attribute, targeting a new audience, bringing a new product out, that's really important work. Perhaps our best resources need to be on that work. But then again, there's another perspective on that. And again, this is particular to any one organization, which is, "Oh, you know what, even though it's a product launch, even though it's go-to-market critical, we've done this before. We have a playbook for this. We know how to do this." And so while the desire of the business is to like have like the A team on this work or the desire of the business is to work with like the top agency minds on this. Really, we probably don't need to do that, right? We probably can say we've done this work, we know what this work looks like. We've done it before. We know how it's all going to get organized. We know all the milestones. We know the criteria for quality. We know how we want to be able to push this through. So perhaps that doesn't have to go to like the most rare and expensive resource. Again, it's not -- it's about rerouting work to the right place. Because if we think about what's on the page here, maybe there's something about innovation, right, something that we actually want to do, it's a genius idea. We haven't done it before. In fact, our agency, our own selves haven't done it before. But we really like it. We really think it could have an impact. We just actually have to create a game plan. We have to figure out a new process by which to get things done. In that particular case, maybe we do need the A team. So maybe it's more not the go-to-market work, right, which is just part and parcel of what we have to do every year, every quarter, every month, but perhaps it's more that we've never done this before work. We actually have to create a new chapter in the playbook that we need to have the right minds that can work quickly, that can work with confidence, that know how the relationships and know where the resources are. And so it's really a question of routing work. So if we can take that assumption that tiering work isn't about who goes first, right? It's really about what work goes where, we can think a little bit more about the right-hand side of the work, which is how do we know what work should go into what tier. And here, we do advise getting quickly into a type of tabulation or scoring mechanism, by which you can triage any incoming work. And that it's about standardizing with business partners, how you evaluate work. So it's not about saying no, right? It's about, in this case, I understand you need this work. This work tends to be in this bucket. This bucket gets routed to those resources. Those resources work on it at this time. So to do that, without getting into too much detail today, we have deeper guidance on how people might look at -- making sure that they can assess the importance of work or the likely impact of it based on similar work in the past or even how prepared we are to do this work, whether that's because we've never done it before or because this work has shown up on our doorstep without a lot of great planning around it, and it's going to need a certain type of resource in order to do that, that even might be better handled by an agency versus an internal resources that is working on something that may be more important, so should somebody be rewarded for handing us like a half-baked plan, maybe not. In fact, there's a whole another discussion that we can put a pin in for today about how to deal with rush work, whether or not rush work should be able to distract us the way it all it does for so many different people. But I think what's more important here is to land on the idea that, yes, you might be thinking about prioritizing work, but we don't really encounter folks that are able to prioritize work. What we encounter are people that are able to route work to the right resources. Now they're still going to wind up with capacity issues to a degree, right? And we always have to think about how much work there is and how we're forward hiring or how we're building new competencies that align to capabilities that we need to deliver work. But that's a future resource investment. So we're going to -- we can't really avoid the constructive tension that occurs around capacity constraints, but we can certainly minimize the capacity constraints or how they tax our system by routing work to the right resources based on a more principal standardized evaluation of work. This is how we ensure that we're aligning to strategy in the deeper workings of marketing operations. But this isn't the only element that's going to matter here because there's actually a sixth component to the tiers. What we hear about time and again is that the actual work to do work gets in the way of work. This has really come to the fore as -- for 2 reasons. One is that a lot of marketing work is becoming more always on. So there's work that we need to attend to in order to keep things running. And it's not the same type of work as we used to do. Maybe it's a different tier of work, right, that hasn't been there before. But we also know that as we try to get more rigorous about marketing work management, we try to standardize the evaluation of work, it can raise the specter of more work just to do work. Let's call this planned work. And when we go about work planning or work management, we can see all these elements on the right-hand side that go into the work to do work. If we take this back to, can I get -- can we do more with less? It's really important to take a hard look at what kind of work to do work is happening in your organization. We sometimes hear estimates that the majority of work that marketing staff are doing are just the work to do work. That's unfortunate and really isn't the goal of margin operations. Just as we saw a need to direct more spend of change in transformation to the front lines as a percentage, right? We also need to make sure that we're working on our own work management processes in order to lessen the burden of the work to do work. When I look at the list on the right, I think about 2 things, in particular, the fact of the work intake can sometimes be quite a mess for folks. And in fact, the fact that we know that work is desired, doesn't mean that we've actually scoped the work to a sufficient standard that which we would activate the project, start the project. And so just in scoping, right, we see a huge sort of accordion moment for different companies that has no standardization. And it's also, to a degree, it's like not about saying no, it's about setting expectations with your business partners about, "Hey, you need to give us the right type of information, or else we're going to spend more of your time that you want us doing your work on the work to do work." So that's what I call it growing the backbone. That just comes from having a more clear-eyed view of your stakeholders' interest, which is they want you to do more of actual work, and they have to understand the knock-on effect of them not doing the right type of job they can do to help standardize the inputs to help you gauge what tier of work, what resources you work on this work and how quickly you can get to like starting their project versus going back and forth about understanding what it is they wanted in the first place. There's a question about, how are we weighing the respective tiers to rank their importance on the wheel? And I think, again, this is something that is up to your own categorization. We have a piece of guidance and partner that goes through more detail about each tier. But really, I think it's about what percentage of work should be being done in the first place. Some organizations maybe are trying to innovate more, do things they've never done before in marketing. Maybe others are trying to launch more products. Maybe there's been more investment right, and new product development. And so we have an acceleration of new products that are coming to market. And so maybe it is the go-to-market tier that is going to be more valuable. So the Tier 1 through 5, it is more of a helping you see that there are 5 different ones. But in terms of which one's more important for you, like this is a communication with stakeholders. So if we can create the tiers, if we can think about how we would score and resource the tiers, we can come back to the stakeholders and say, look, this is how we're going to triage the work. And we're trying to make sure that we can't just like not everything can be innovative because if you're asking me for a launch of an update to your product that existed for the last 5 years, I'm not saying that's not going to fall in the innovative category. Now whether the innovative category is most important or not is the question for that what is happening in the overall enterprise itself. So how much percentage of work should being done by each tier is definitely like a shared goal that is reflective of both what the businesses are doing and what marketing is aligning itself to support. So it's super important to answer that question yourself, and I'm not trying to be coy, right? But we do have guidance on sort of how to think about your current state and showing a picture of a potential future test where different tiers have different weights as it were -- or share of percentage of work based on the resources available and trying to get the business to realize I need -- we're equipped to handle the capacity in this way. And if you need us to shift our capacity, that takes time. So if you want to shift towards doing more innovation work or more go-to-market work to align with the enterprise strategies, fine, it's going to take us time to migrate to there because right now, we can do these tiers of work to this extent, and these are the resources applied to do that. I just want to underscore that part of that standardization of work, right, comes right into this work to do work element here, where we're triaging the work request and intake and scoping to understand what this work is in the first place in order to get there. And so we have to have a complete picture of the request. But again, it is an element not to be missed, right? We're thinking about not just aligned with the strategy, but also being more efficient with our marketing dollars and the amount of spend that we're putting on people. Now I did say that I would mention that there is an example out there, right, probably others, but one that we thought was replicable to a degree, and we brought out as a case study, like, can marketing just say no? And I want to just give you one example. There's no build on this chart either, but it's from Sealed Air, which makes packaging solutions as well as like packaging for inside packaging to like protect the products. And their CMO was saying, we have all this work that's going on. We have all this new work that's constantly being requested. If we have a shift in enterprise strategies, like we suddenly went from trying to be new and innovative with all these new engagement models that we can do virtually with customers to like, no, no, no, we need to just launch the right products in the coming year. Well, that's a shift in enterprise strategy. And if we have a shift in enterprise strategy or priorities, then we need to be able to accommodate how that's going to show up in their planned work. And so they instituted a quarterly reevaluation of work with the agreement of their business partners where they stripped out, right, the prior evaluation, right? The original business justification, the percentage, whether or not how much money has been spent on the project already, whether or not the stakeholders like had previously been super excited about what that work was. No, if there's been an enterprise change in strategy, we're going to have to rescore the work. So this is work to do work admittedly, but it was work that paid off for them because they were able to change the amount of time allocated to pre-existing work. They were able to create capacity where there wasn't capacity before. You can see the release of about 33% of the team's time suddenly on a quarterly review basis was able to be repositioned, right, to new work that was all going to happen like with different resources or perhaps at a different time, and we just could remove some of that backlog because it no longer was a line of strategy. Now that's a very disciplined approach to staying in aligned to strategy, but it's also in terms of the theme of our work here today, how to bridge the gap between marketing strategy and operations. It's a very prudent and effective way to say the work that went -- some of all of the work that we've been doing is equal as we look at how strategies change. I would say there's an echo in here from Sealed Air about something they're not doing, which is zero-based budgeting. I would call this zero-based prioritization, but some organizations are looking at zero-based budget in a way to sort of say, every quarter or every half year, we got to step back and say, is everything worth it? Like we can't just be afraid to start spending money on something because what's more important is we're spending money in the future on the right things. So that's sort of laddering us through the key issues today. Looking at how bridging the gap between marketing strategy and execution is supposed to happen in this era of less, first and foremost, comes back with how we can do more with less, which results -- which relates to how much we're spending on change in transformation as one of our pillar strategies, which relates also to how we know whether we're having an impact with change in transformation through our productivity measures. And of course, how we're bridging this gap like can we actually realign resources as they go. I know Kelly is in my ear right now, telling me that I've only got 12 minutes left. Let me just leave you with one last element here, which is how AI plays a role more broadly. There's lots of other guidance at Gartner about how people are piloting AI and how we're looking at using it. But just recall like one of the things that they're thinking about the most is that it is coming back to like doing more with less. I would just say that while everybody wants to have the improved efficiency, improved cost efficiency, I would keep an eye on what we've just been talking about here when you're going after your AI pilots in trying to be able to show, right, the proof of concept is that change is hard, change in transformation takes up money, change in transformation gets in the way of business as usual work. When is the right time or what is the right pace or cadence by which to do this? And where is it happening already in your own organization. So while this is good for self-reflection about it. I purposely didn't leave AI into this story because it gets caught up with the fact of like what is the right next change in order to get more done with the marketing resources that we have. Kelly, I appreciate you having some patience with me there. I will see the stage to you, of course, before coming back to some of the other questions that I see in the queue.

Thank you, Michael, for sharing your insights. We have time to take some questions now. So please continue to submit your questions and thoughts in the Ask the Speaker box and remember to rate this session. To submit your rating, locate the Rate the Session link below the player, a box will open for you to select 1 to 5 hearts. Please note that 5 hearts is top rating. Share your feedback on the insights provided and then wait for the feedback box and click send. Before we get to the Q&A, here are some resources to take you deeper into the topic Access the latest research-backed insights to master your role and transform your organization at Gartner Marketing Symposium/Xpo. Visit the link on the slide to learn more and sign up for conferences updates. Additionally, we invite you to empower your organization and gain a competitive edge using Gartner's 6-point brand health framework. Also learn insights on some major trends and predictions along with leadership strategies for CMOs to tackle upcoming challenges using the Q1 2025 CMO journal. Follow us on social media and stay up to date on the latest insights to transform your brand and marketing team. And if you want to learn more on how Gartner can help you achieve your mission-critical priorities, contact us on the methods on this slide. You can download these resources from the bottom of the page, plus you can find more Gartner insights, access the presentation slides and the upcoming and on-demand webinars at gartner.com/webinars. And now over to you, Michael, to address some of those questions.

Sure. Thanks, Kelly. I was just scrolling through the questions, picking up one here. Have you found correlations between difficulty in prioritizing work, org structure and our culture? I find this to be a great and fascinating question. When we are looking at the tiers, if we know the nature of the work that we're trying to do that's important in the organization, then we absolutely can think about what resources do we need to do that. If we're going to do more innovation work maybe we need people that really know much more about how our organization works and more institutional knowledge, and maybe we need to find more people internally to bring into our marketing organization because maybe junior staff is not the best way to be doing that type of work. Just the same, it doesn't mean that we could pivot to using any contractors, if you want. I don't mean to sound sort of blunt on the phone, but I mean, on a virtual call like this, but these are hard questions that need some answers and showing knowing what tiers of work we have and how we're trying to shift our work from one to another completely relates to capacity and where we can best find that capacity. And maybe initially, the best way to find capacity for innovative, like work if that's priority is with an agency. Again, it just depends on the culture of what's going on, but it absolutely can shift the way that we're thinking about resourcing. The other thing that happens here is, it was alluded to sort of that preparedness element. I said there's sort of more to talk about in the terms of the idea of rush work. We see people think about how early do I know about work requests. If I know 2 months in advance that people need work, maybe they say, okay, I can call that planned work. And if I only know 1 month in advance, I call that unplanned work, but I can't guarantee that the traditional resources are going to get it. It might have to go to an agency even though under normal assessment, it would go to an internal resource. And if I get rush work, maybe I'm not going to touch it at all. Maybe it's just going to go to agency X, and those stakeholders have requested the work in a rush way are just going to have to pay a 30% premium for it because it was undisciplined of them to ask it, and my job is not to burn out my employees and marketing. Now that's easy for me to say on this side of the screen, but there's a culture of work out there that we need to help ratify and help the broader organization see when it comes to the marketing obligations. And so if everything is going to just be rushed work, why would I ever build a team of resources that are only going to do the majority of rush work. I will lose them. So it comes back to this great question. It's like, has there -- what's the correlation between difficulty and prioritizing work. I don't think it's difficult to prioritize work. I'm not part of that work. I don't think it's difficult to score work and put into different buckets and think about what capacity I have for that bucket. I think it is based on what that is, what resources do we need and what reasons do we have. And I think also depending on the nature of how work comes in, it affects how I want to have resources to do certain types of work. So again, that's why I like the question. It reflected that interrelationship between tiering work, prioritizing or standardizing the evaluation of what -- where work goes and how it relates to our culture. There was another question I wanted to come to which had to do with how the -- I'm sorry, scrolling back up. The question that came in was, what are the most significant marketing digital transformation contributions and related business impact. And I just wanted to recognize that question. It's a great question, right? I would say that I don't have an answer for it in this session. We track 2 different things here. We track digital engagement as a benchmarking tool across 1,400 brands for all different sectors and go-to-market styles. And so we're able to see what good looks like, and we're able to see what technology is driving the performance of those what we would call genius brands for digital engagement. And we also interview those brands, those genius brands to understand where their processes may have differences from sort of everyone else. So for example, and again, not to dive too deeply on a short time in front of me. But when we looked at the people that were performing best in search and search engine optimization to be precise, we found that they were refreshing their keywords at a 25% faster rate than all others. Now is that technology? Is that a major change? Well, it's somewhat of a change, right? If you're going to do something more, like how are you going to do that more? How are you going to get the insight of what the key works could be? How are you going to test those keywords? How are you going to pay for those key words? Again, there are sort of a subtle change in processes. But I think that one of the areas that we look to is to the genius brands from our digital benchmarking indexes that give us a clue of like where people are trying to do different. I think the other aspect of this is really and again, I have a little bit of bias here, but in marketing operations and putting in marketing work management tools and having sort of a standardized holistic system, a record of past, current and planned marketing work, is definitely an area where we see a payoff when people can know not just who did what work when, but like what type of work are we planning? And how quickly can we reflect that back to the enterprise is very important because we want to stay aligned to the right work that we need to do. Now that's a change in transformation effort to standardize on one work management platform. It's not as common as we'd like to think it is. But it is something that when people accomplish it, that they're able to sort of answer a lot of operational performance measures right away, and they're also able to give their staff a lot more certainty about what work they're going to be working on and even migrate that staff prudently, slowly towards developing new competencies to increase capabilities that affect their capacity to do certain types of work. Let me just come back to one more that got piped in here. It's -- do you have any recommendation on how to create a winning -- sorry, when thinking about productivity, have you also considered collective productivity, including that of agencies and other marketing resource partners? So the answer to that question is, yes. But right, that's under the KPI timeliness. If you -- although capacity is most correlated with the business outcomes as a KPI that we all pursue, it's really hard to be in the weeds of an agency and understand their own capacity plans, which they may not even want to talk to us about. But timeliness, right, when was work requested? When was work started? When was work completed? When was work deployed, right? These 4 time stamps exist across all projects in all locations. And so we do see integrations happening or at least management of those timestamps so that we can understand not just how long it took the actor to start a product from start to finish to complete a project, but also from that business stakeholder perspective, when did I request work and when was that work deployed, right? That brackets what marketing cares a lot about, which is how fast did we get our work done? But what really matters is also the sense of the stakeholders like, when did I request working? When was work -- market facing, if you will. So timeliness is the data point that travels those 4 time stamps of started work -- I'm sorry, requested work, started work, completed work and work deployed, tend to be -- simplifies the quest for what operational data to go find from what system and where to bring it and how to present it as we saw from Mutual Omaha in a way that causes some self-reflection that can move us forward. With that said, let me make sure I don't take you guys across the top of the hour. I greatly appreciate you having some time to hear what we have to say at Gartner on this topic. You're very generous to do that. I know everybody is busy, especially in an era where we're trying to do more with less. You have given us a scarce resource, your time. So thank you very much for that. And Kelly, with that, I'll turn it over to you to close this out.

Thank you, Michael. Before you go, just a quick reminder, you can download the presentation slides and other resources from the bottom of the page. Please rate this session and share your feedback on the insights provided. To submit your rating, click Rate Session below the player, a box will open for you to select 1 to 5 hearts. Please note that 5 hearts is the top rating. Share your feedback on the insights provided, and there'll be further feedback box and click send. With that, I'd like to again thank our presenter. And of course, thank you all so much for joining us. Have a great day.