October 22, 2024 • 46 mins
Marisa and Steven continue their recurring series on building understanding between the Marketers and the Money, when they sit down with private equity leader and former CEO Joshua Schultz to tackle this burning question: do finance leaders truly understand the value of marketing? Together they get real about the tension between short-term financial performance and long-term brand building, and volley on marketing as an essential investment vs. just another cost to be managed. It’s the kind of conversation that needs to happen more in boardrooms around the country - and one you won’t want to miss.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:06):
Hello, and thanks for joining us on brand new from
the iHeart Podcast Network and brand New Labs.
Speaker 2 (00:12):
I'm Marissa Thalberg and I'm.
Speaker 3 (00:13):
Steven Wolf Beta. So good to see you. Marissa.
Speaker 1 (00:18):
Hello, partner, It's good to see you back through screens.
But we had a moment of togetherness about a week
ago at a conference which was always a treat.
Speaker 3 (00:29):
What was it forty eight hours in real life, and
we got to be together and actually have a meal
and just actually spend some quality time, see a.
Speaker 1 (00:36):
Lot of our favorite industry colleagues and friends, get recharged
and inspired by that, and then we were back off
in separate directions again.
Speaker 3 (00:44):
Huh yeah. But you know, it's just such an interesting
time because we're in full blown, you know, kind of
conference circuit, but not just you know, kind of things
related to marketing or media or advertising. But you were
actually at an event that actually was kind of a
throwback to your old days in the beauty industry.
Speaker 1 (01:00):
Right, definitely not a conference, but I went from that event.
I was supposed to fly from that event just back
home and back to work. But when I learned that
my new colleague with whom I've already just established such
a great rapport was being honored at a big event
that's iconic in the beauty industry. I knew that it
(01:21):
was worth it to instead fly to New York.
Speaker 2 (01:24):
I mean, it was kind of crazy. I got off
the plane, thank goodness for once my plane was on time,
got to the hotel.
Speaker 1 (01:31):
Great thing about now being back in a retail environment
is there was hair and makeup provided. I was so
happy because I was up at four in the morning.
Speaker 3 (01:39):
It's the details, Marissa, the little things.
Speaker 4 (01:41):
The little things, the little things, and it was a
really amazing, surreal moment of when you get to feel
all your lifetimes kind of coalesced together like that.
Speaker 1 (01:55):
Saw a colleague who had been our chief legal counsel
when I was ahead of global advertising at Unilever Cosmetics International.
This was this is a very long time ago. It's
just like this was well over twenty years ago. And
then I saw some people from of course my Esday
latter days and then and now I'm with all these
new colleagues and people.
Speaker 5 (02:16):
It was just it.
Speaker 2 (02:17):
Actually felt really great. I was on a high from that.
I have to say, Look.
Speaker 3 (02:22):
I think, especially as we go more and more into
this AI era, there's going to be such a premium
on in real life experiences. So true. We already see
it that everyone's on their devices, but people are lonely.
They are craving togetherness. And when you have the opportunity
to kind of be together in a real world situation,
I think those are going to be highly, highly valued
(02:43):
and coveted.
Speaker 1 (02:44):
That's a real insight. It's a real insight. So, speaking
of which, first dinner event for Alpha and Company, Yeah, no.
Speaker 3 (02:53):
I mean so, I also travel to New York. I
was actually with also some former colleagues to be a
part of something that Rashad Tobakawaala was doing.
Speaker 5 (03:03):
Smart.
Speaker 3 (03:04):
He's just so insightful. If you have not subscribed to
his sub stack, please do. But Rashad is kind of
truly like the Yoda to so many folks in our industry.
And he actually has a new book called Rethinking Work
coming out. But he held a salon session and I
moderated a panel of him and our dear friend Troberman
from iHeart, and we were talking about AI, of course,
(03:26):
because it's in every conversation, but again, how do you
talk about it in a substantive way? You know, Rashad
just had such a smart you know, ref on it
because obviously, you know everything with artificial intelligence and how
it's the automation of automation, but he was also focusing on,
you know, what does human intelligence look like in this
AI era? This really makes you think about like what
are we going to really be able to do? How
(03:46):
do you really think about where we add value? And
that kind of leads into Alpha, my new company doing
these dinners, you know, to just trying to convene folks
to really have substantive conversation around a variety of different
topics and the intersection with AI. So we actually had
one in a Los Angeles with creators and AI that
was co hosted with our friends over at Whaler, you know,
(04:08):
Neil Waller and that crew. It was just wonderful to
have just such an interesting cross section of technologists, investors,
creative people, agency people, brand people, publishers, just really looking
at all the different touch points and you know, everyone
is kind of struggling with how to kind of think
about moving forward. And again, this is not linear, It's
(04:29):
going to be exponential, and so I just really I'm
on this just this you know, kind of mandate to
really get everyone to think about how to get AI
ready because it's coming and you know it's going to
hit people right in the forehead before people realize it.
Speaker 1 (04:43):
So between the Reshot event, his book, your event, getting
all these people together, were there any.
Speaker 2 (04:50):
Really juicy takeaways that you can share with me and
with everyone.
Speaker 3 (04:55):
I mean, there are a lot of juicy takeaways. I
think one of them is I think people are are
really really you know, kind of in two camps. There
is the camp that has their head in the sand
and they really don't think that you know, it's something
to worry about right now, or it's going to come
down the pike. But again, you know, not not for
right now. They're kind of just going about their lives.
(05:18):
And then they're the folks that are kind of really petrified.
And I think some of them have actually been impacted already.
You know, a friend of ours who is the CMO,
she actually had her role eliminated. Effectively, she got pushed
out because half of her role was tucked under sales
and the other half of it was kind of tucked
under a product. And now she's kind of out of
(05:40):
a role. So it's starting to happen. But again, like,
how do you get AI ready? How do you go
on the offense. And again, I feel like it's very
timely to make a nice little transition to our special
guest today is really trying to think about how do
we reframe this marketing conversation, and you know, kind of
tied to our marketing and the money series, I wanted
(06:01):
to bring one of you know, my dearest friends. His
name is Josh Schultz, and Josh is now an operating
partner at a mid market private equity firm. But prior
to that, he was a CEO of a life sciences
company called Sitel. They were just a real leader in
advanced analytics and data in life sciences. Before that, he
was a senior executive at a company called park Cel.
(06:22):
He was there for I think thirteen plus years, and
he's super smart. He was an entrepreneur. He did a
pharma tech company where he's capital for that, he was
in consulting, and you know, he's just now in this
private equity world. I thought it would be really interesting
to kind of get that purview of private equity on marketing.
So let's talk to Josh Morrison and we are ready
(06:48):
to kick off our special guest, Mister Joshua Schultz here
on brand new Josh. Welcome, Welcome, Josh, Hey, thanks for
having me, Marissa, You're meeting one of my dearest friends.
He is someone that I've known for a very long time.
But I am thrilled to actually have you here, Josh,
especially with this whole theme of you know, talking about
(07:09):
marketing and money. Your background. I gave a little bit
of your bio before, but you know, you were the
CEO of pharma related company called Citel. You're now an
operating partner at a mid market pe firm. Help us
understand a little bit of just like your perspective and
your kind of engagement with the world of marketing.
Speaker 5 (07:28):
Happy to you know. In the life sciences and life
sciences services industry, on particular life science service industry where
we serve big pharm companies, marketing and sales are largely
driven by business development professionals. It's largely driven by subject
matter experts seller doers. In the case of services, brand
is important, but it's probably not the number one thing
(07:49):
that might be in CpG or some of the other areas,
which is ironic maybe because pharmaceutical companies obviously there's a
big role that brands play there, but in terms of
selling to what is a relatively small a set of businesses.
The role of brand is probably less important in the
companies that I've worked for, although it has still been
a factor for sure.
Speaker 1 (08:07):
I think that's okay in the sense that we want
to bring in trusted voices and kind of a real
dialogue from the different seats at the table that we
might have. And you've had this really interesting seat and
a few different contexts from inclusive being an operating roles yourselves,
but then back in kind of the money side, the
(08:27):
private equity side, the investing side.
Speaker 2 (08:29):
And it's funny.
Speaker 1 (08:30):
I was just having this conversation this week with the
context of my new company and finding myself quoting something
I know I've heard and said many times, which is,
you can't cut your way to growth. And I'm curious,
do you agree with that? And in that context do
you see marketing And you don't have to speak from
a farmer land, just speak from someone who's thinking about
(08:51):
wanting to get a great return of investment in a company.
Do you see marketing as an essential investment generally speaking,
or more of a cost to be managed?
Speaker 5 (09:00):
You know, it's a great question, and so first off
both by just kind of my own personal proclivities, but
also very much the sorts of private equity firms that
I've been familiar with, which I think is probably the
majority of them, although I can't speak for all of them,
but generally speaking, private equity wants to build great businesses,
and they reason they want to build great businesses is
because you can celebrate businesses for more money at the
(09:20):
other end of your whole period, and so building great businesses.
There's a whole variety of things that a private equity
firm thinks about doing when it buys a company, things
like putting in place scalable processeds and systems, perhaps bringing
in a management team with an orientation towards a bigger
and maybe different, better, hopefully company, but also things like
(09:42):
investment in commercial investment in product. I mean, I've personally
done those things in the contents of privat ecty back company.
I've personally been involved in those on the private ectority side,
helping companies to implement those. So generally speaking, there's huge
alignment that you have to invest more to grow more,
the idea that you're in a cograway to glory that
maybe some private equity firm playbooks, But it is not
(10:04):
I think it's probably not the typical one that said.
The big question to me, and I think for purpose
of this conversation is of all the many ways that
you can drive growth, marketing is only one of those.
And in many cases, as CEO, you have to work
amongst a bunch of very articulate senior executives who are
(10:24):
all advocating that investments in their pot is going to
drive more growth. And so do you believe the product person?
Do you believe the sales guide? Do you believe the
HR person who's saying, well, if we have a better
culture will have less pletrician betweens? All of the various
ways of spending money to drive growth, that is the
hard part, and I think that's the milieu that marketing
(10:44):
and brand in particular has to compete for scarce investment.
Speaker 1 (10:48):
Dot really well said, I'm really fair, and I would
just say that I think the most enlightened cmos who've
graduated from just thinking of themselves as functional leaders to
being enterprise leaders who care, you know, are part of
a management team of a company, don't want to carry
the whole burden that all of growth in the company
(11:09):
rests on their shoulders. That's actually an unfair burden. I'd
say to put on a marketer shoulders. You need to
have other pistons firing across the company to make it work.
But you're right, there is a battle for resources and marketing.
I mean, maybe this is my bias, Stephen. You jump
into like marketing is often an easy one to see
(11:31):
us expense and cut.
Speaker 3 (11:33):
That was a little bit of the conversation that we
had Josh, you know previously, which is all intents and purposes,
the CEO is really a portfolio manager, right when you
really think about all the different functions. You know, your
cfo's role is pretty well delineated. Your CTO, you know,
your chief revenue officer, I think chief marketing officer is
probably the murkiest, but you are really the allocator of
(11:55):
capital and help you know, kind of share that perspective.
You know, I thought you had a really good insight
into terms of looking at the return of investment on
that incremental dollar and kind of what are the hurdle
rates that you're actually looking at your marketing executive to
actually clear because you had a very specific way to
kind of phrase it.
Speaker 5 (12:11):
Well so sure, although I want to come back to
your point in a moment about the hurdle rate that
your marketing executive needs to clear, because even talking about
or thinking in that way, I would argue, is pretty
uncomfortable for a lot of folks, not just marketers, by
the way, but so generally speaking. You know, there is
a typical private equity return in the mid market is
about two and a half times, which means you've got
to grow in about twenty percent top line two and
(12:33):
a half times what exactly right, two and a half
times the original invested capital. So I invest one hundred bucks,
I want to be able to deliver two earn and
fifty dollars in five to seven years, which is an
average hole period. So doing that, if you grow about
twenty percent and a little bit of leverage aka debt,
ideally make the company more interesting, which means people are
willing to pay a higher multiple of your profitability than
(12:53):
maybe when you bought it. All these various things come
together to try to get to the sort of returns
that the investors in private equity companies expect, And when
you're looking at that, this goes mercy to your point
a moment ago, it's very hard to get two and
a half times by cutting your way to glory, very
tough to do. As a matter of fact, you can't. However,
if you can grow the top line through a variety
(13:13):
of means, whether it's better product or better marketing, or
more sales people, better salespeople, whatever it is, there are
ways to get there. But you as the CEO, and frankly,
I would argue you as any the executive team has
to be thinking about it in that lens of how
am I going to drive the most growth for more capital?
Almost certainly, but not infinite capital. So that actually that
leads me, Steve to your point that you just made
(13:34):
a moment ago and I just want to highlight it
for a second. One of the most interesting transformations that
I've seen with executives that I've worked with, and this
is true general counsel, LEO, folks, HR, commercial CTOs. Every
single person around that table also needs to transform from
what got them to that place, which was probably being
(13:55):
great at HR. But frankly, I don't need a great
HR person be my CHR. I need someone who understands
the business dynamics that we're all facing and helps me
solve those with an expertise in HR and by the way,
that means inevitably, if I'm going to make an investment
in something, there needs to be a commitment to deliver
a return on that investment in a quantified way. Same
(14:16):
thing I would argue with marketing. If you're a great marketer,
that's one thing, But for you to be able to
engage with me about how we're going to run the business.
And it may be that the right answer is less marketing.
Probably not, but that may be the answer. Another answer
may be we're going to invest heavily in marketing, but
I need to know that when I spend ten million
(14:36):
dollars on this strategic marketing brand two point zero plan
that you've got, I'm going to need confidence that that's
going to be a better use of the money than
more salespeople, more product, more or whatever it is. That
requires a commitment, though, and a quantification of the output.
That is very hard and I think a lot of marketers.
(14:56):
Certainly twenty years ago marketers really didn't have a nice
clean way to quantify. Now there's much better ways, although
it's still far from perfect, but that ability to convict
to provide conviction and quantification of that investment makes my
job about who to give the money to much easier.
Speaker 3 (15:13):
But demensialize that does. To continue with that point, So
if your EBITDA margin right, your earnings before interest, taxes, depreciation, amortization,
that is, you know, kind of the key proxy for
cash flow. So your EBITDA margin is called it twenty percent,
and your head of marketing says, you know, I want
ten million dollars to do brand two dot O. How
would you be thinking of the hurdle rate?
Speaker 5 (15:34):
Like?
Speaker 3 (15:34):
Do just use that example just for our listeners.
Speaker 5 (15:37):
Well, obviously depends on the size of the company all
the rest of the stuff. But the best way to
think about it is not in terms of EBITDA. But
let's say I must spend ten million dollars, and with
ten million dollars, let's say I could hire twenty salespeople,
and each one of those salespeople on average generally three
and a half million bucks of revenue. Three and a
half million dollars of revenue is seventy million dollars of
revenue across those twenty people, and then that's seventy million
(15:58):
has an EBITDA margin of let's say twenty percent, that's
fourteen million bucks, So fourteen million bucks of return and
my ten million dollars investment. Now, of course it's nothing's
ever that linear, right. Inevitably, there are also you know
that not all twenty will work out, and some of
them will exactly all the things, so there's nothing that
is perfect, there's no straight line. At the same time,
if I've got fifty other salespeople and on average they
(16:20):
all generate three and a half million dollars of new
sales every year, and my commercial head says I can
hire twenty more people. I'm confident I can do it, Josh,
And then the marketing person shows them and says, I
want ten million dollars. And by the way, words words, words, words, words,
but no conviction, no quantification to anything else. That's a
hard balance, right, It's a very hard position to put
(16:40):
the CEO in, who then has to decide which of
these is more plausible. And the fact is the CEO
may have all the respect in the world for marketing,
they have all the respect the world for product and
all the rest of it. But when you're allocating these dollars,
the person who can give you the highest conviction of
the best return is where the dollars are going to
go inevitable. And so I do think there's an imperative
(17:02):
for marketing to continue to try to get quantification as
much as possible and understand that the CEO fundamentally has
to make decisions based on that data. And the less
faith that you inflict upon them, the more likely they
are to invest in your in your era.
Speaker 1 (17:19):
And look, when you say it that way, of course
it makes sense. But let me take your example and
put it just in a marketing microcosm, because I think
it epitomizes the dilemma that we have and the problem
over our marketing has come to today.
Speaker 3 (17:36):
All right, So.
Speaker 1 (17:37):
Now let's say you're sales guy from another function. His
name is paid Search Marketing, and he's raising his hand
and saying, just give me a dollar, and I'm going
to give you five back. And then over here is
someone who's saying, no one really has understanding beyond the
people who are kind of already aware of us, of
(17:58):
this brand, and we need more customers, so I need
to go build that brand.
Speaker 2 (18:03):
Give me a dollar. I can't tell you today.
Speaker 1 (18:06):
With that same certainty that I'm going to give you
five dollars out tomorrow. But I'm telling you, if we
don't do this, the well dries up. That is to me,
like the problem is you're sitting there, and I get it.
If I'm sitting in that, the temptation to say, well,
I'm going to go for that, like I'll give you
a dollar, now I get five back, accept bigger picture,
(18:29):
what happens to the long term success of the company.
Speaker 2 (18:32):
And it really is an example.
Speaker 1 (18:34):
And now I'll get to a question, which is how
do you help your peers or how do you yourself
think about short term versus long term?
Speaker 5 (18:44):
It's a great question. So let me answer that in
two different ways. So the first one is that there
are things like culture that I have enormous appreciation for,
enormous respect for, and I believe is one of the
most powerful tools that a company can create that a
CEO can invest it, right, And just like kind of
(19:05):
what you're describing here where it's kind of longer term,
the use of the investment in brand to create longer
term value culture is very similar, right, which is very quantifying.
No one doubts that is powerful, No one doubts it's valuable.
No in doubts deserves investment, but how much when what
am I going to get back for it to c
very tough to answer in many cases. And by the way,
(19:25):
as the CEO, I mean, it'd be great and frankly
be easy if everything was quantifiable and simple and which case, honestly,
you don't need a CEO. You seed a computer and
you just you know, it's simple sheet on the company.
A lot of the job, at least from my experience,
is when you don't have the data and you do
have to go on gut. But what happens all the
time and you have to make those calls all the time,
and it's part of the job. Part of my job
(19:48):
was making my job easier by trying to push things
to as much quantification as possible, so that instead of
underlying anecdotes or who I like more or who's more
articulate or more charismatic, that we at least try to
weigh things apples and apples as much as possible, recognizing
that there's certain things you just can never do that
for and there's a lot of grain, So first off,
that's generally a hard thing to do. There's one other
(20:10):
way they would answer question ers, which is an interesting
one in the private equity context. So, as I mentioned earlier,
private equity tends to hold companies for five to seven years.
To be clear. On one hand, you'd say, well, that
means on you know, a year five or year six,
you should you know, cut costs and slash and burn,
and you know you don't care what happens to the
company the day after you sell it. That's actually also
very simplistic and not accurate, because the fact is, no
(20:32):
one wants to buy a company that is going to
fall apart the next day. Right. These are all sophisticated buyers,
sophisticated sellers who often, by the way, are buying and
selling from each other multiple times. It's an iterated prisoner's blemma.
There is no situation where you can just have a
company that's on duct tape and straying and falls apart
the next day. So buyers want to buy a company
that has a great future, and you want to create
(20:54):
a company that has a great future for those buyers. However, well,
that is all true, and is very much of ultra true.
The fact that when you're in year four of your
whole period, the idea of spending an extra ten million
bucks on brand work that may not pay off for
three or five or eight years and will not really
be visible a year and a half or two from
(21:15):
now when you come to sell. Is a tricky question, right,
And it's the sort of thing where it's a little
bit like investing in culture in year four or five.
It's a little bit like investing in some new product
that you won't really have in the market, and it's
just going to be kind of a dream and son's
eye a year or two from now. It creates a
little bit of difference, depending on where you are in
the whole period, what sort of investments make sense to
(21:36):
make in the context of private equity. And like I said,
it's I don't want to be black and white about it.
It's not a black and white question, but there is
a dynamic there that is worth thinking.
Speaker 3 (21:44):
This is exactly the real talk that we wanted, Josh,
because there's nuance to all of this, right. You know,
you can't just paint all private equity as you know,
bad or slash and burn. Like Again, they're very sophisticated
buyers and to your point, they usually buy from each other.
It's also a very different time horizon from venture capital
where it's obviously smaller dollars, they have much higher hurder
(22:05):
rates in terms of their expected returns. You know, but
I want to look at it from a different vector,
like when you actually are presented to your board, and
this is one of the things that we see oftentimes
there is really no one representing marketing in the boardroom.
And I have a thesis that you know we've discussed
in the past, which is, I think marketing needs to
(22:25):
reinvent itself. And really marketing is truly just a tactic.
But if I were to tell you, hey, we need
to invest in our customer, and who is representing the customer?
I think that gets more of a CEO's year. And
certainly the board cares about customers versus marketing and tactics,
and so how do you view that whole conversation, Like
(22:45):
is that accurate? Is that a valid thesis that you
would rather talk about customers than talk about marketing, And
does marketing really have a marketing problem?
Speaker 5 (22:54):
That's an interesting point. Hearing the voice of the customer
is really valuable to I believe everybody and certainly to board.
I think the more that you can talk about here's
what the customer is thinking about here's why they like
or don't like us, here's why they're buying or not
buying from us. I think that's profound, valuable stuff, and
the more that you can position it that way, the better.
I also reflect back on the last thousand board packs
(23:17):
that I've put together, the number of pages that have
numbers on them is ninety eight percent of them, and
the pages with numbers on them, sixty percent of the
text is numbers. Right, I'm exacting a little bit, maybe,
but not much. The fact is, the huge focus is
on numbers. It's on quantification. And if you can't play
(23:38):
in that milieu, if you can't quantify, if you can't
make commitments, it's words. And I will tell you one
of the things that my experience of privatecor I don't
think it's just private, I think it's corporate world more broadly,
is that words are cheap. Right. There are lots of
super articulate, super chrismatic people who can say I'm this.
Speaker 3 (23:54):
You get a dagger in the heart of every copywriter.
Speaker 1 (23:57):
Maybe I'm such a word person anybody and dagnard of me.
Speaker 3 (24:05):
But I'm a numbers guy. And again, this is exactly
the conversation that we need to have.
Speaker 1 (24:09):
I have to say, Stephen, I'm feeling your inner finance
peak is coming out.
Speaker 2 (24:13):
Full bloom in this episode.
Speaker 5 (24:15):
It's really kind of wild. As someone who loves the
one word, I actually think it's how you get those
numbers is often through words, right, So I don't mean
to imply for a second that word important. But when
it comes to making investments and board meeting sort of discussions,
et cetera, if it's just really great ideas, Because every
one of those board folks, they're all older folks who
(24:37):
have done lots of pattern recognition, and the number of
times that someone has come up and done some song
and dance with all sorts of great pictures and then
gone off and it didn't work is many. They've all
seen it a million times. And so if you can't
show a path, and by the way, an example is
that little made up example of salespeople. If I can
show you that on average three and a half million,
and I'm gonna hire twenty of them, and it kind
(24:59):
of gets you to a place where it's tillis return
for ten million dollars investment, they can all see that
there's a path. They understand how you're going to get there.
It's the more they have to believe in you. It's
just a higher hurdle because they've all seen super smart,
super particular people.
Speaker 3 (25:12):
Not But then bring it back to the customer conversation,
because who is really the voice of the customer in
the boardroom?
Speaker 5 (25:19):
Typically the chief commercial officer in my world in life
science is a services world, is the chief commercial office
who's got the salespeople. The salespeople are out there talking
to clients every day, and then the business leaders who
also hopefully are talking to clients every day. And I
will tell you when someone speaks in a real way
about what the customer is thinking, and not just like
once again, not just random words that they kind of
(25:40):
took off of whatever, but like, because I talked to
so and so yesterday, I spoke with so and so yesterday,
I got this analysis, this data. That stuff is very
powerful because at the end of the day, that growth
is what matters, and everyone knows that if you understand
what the customer wants, you've got a much better chance
of delivering that growth. So I think the voice of
the customer, the true voice of the customer, is one
of the most valuable things you can get. And that's
(26:02):
an area where to your point, if marketing was much
more of that, it would resonate really well with it.
Speaker 3 (26:07):
I think it is a lot more of that. I
do too, and I think that's part of our branding issue. Yeah,
because if you look at who is talking to customers,
it's usually the marketers. A lot of folks don't want
to talk to salespeople because they don't want to be
sold to. And so I mean, Marisa, like, I feel
like you live this every day, right, I.
Speaker 1 (26:24):
Do, And I look, I have enormous respect for what
you're saying. I think it's really important to be able
to have this kind of conversation and to say it
in a real way of sort of trying to understand
what the pain points are for each other. And again,
like at the end of the day, if we were
sitting you working for the same company together as whether
(26:45):
it's CEO or CMO or investor or whatever, you're going
to have healthy debate. At the end of the day
you realize you're all trying to get it the same thing.
Speaker 2 (26:53):
The one part that.
Speaker 1 (26:55):
Is missing from the equation, the math equation in this
that I'd push back and also ask how do you
do it? Is? Yes, everyone's probably been burned by someone
who did a fancy song and dance and then didn't deliver,
and it's like, ou, so just give me the tried
and true. The reality is there are a lot of
hard businesses, whether it's a small brand trying to compete
(27:15):
against much bigger ones, a new player, a turnaround where yeah,
I think you were kind of using this example of war.
What got you here is not going to get you there,
and it's going to be some secret sauce, some unproven thing,
some trying things differently to get to a step change result.
Speaker 2 (27:35):
That for me is the art.
Speaker 1 (27:36):
I mean there is, there is some instinct involved, there's
some trust and confidence and I guess the but is
it well, I don't think it's just words, but I
think maybe I'll answer my own question, but then throw
it back to you. Is is it that you know
you want to feel like the person who's asking you
to take a leap of faith isn't going to make
(27:57):
that a death defying leap. So there's always some kind
of failcy if involved, whether it's piloting something, whether there's
a backup plan, whether there's Okay, let's give this a try.
We're going to try it for this long. If this
doesn't work, then we do that. I mean, how do
you help get comfortable when it's not perfectly predictable on
a spreadsheet?
Speaker 5 (28:15):
Yeah? Absolutely. And by the way, there's so much nuance here.
And I'm actually to look in this conversation, and in
this case, the nuance is not about I don't think
there's any reasonable CEO on the planet who doesn't understand
that marketing can be super valuable. Not. I mean, yeah,
it's of course. It's like saying culture is in valuable.
I mean, I'm sure this ism out there who don't
(28:35):
believe it, but they're morons, right. Of course marketing matters.
Of course, things like culture matter. The challenge that is
faced is not whether or not marketing matters. It's what
hurdle do I have to clear to believe that the
ten million dollars spent with Marissa is going to generate
a really positive return versus the ten million dollars I
spend on everything else or anything else. Let me ask
you the question, right, if someone gives you an investment
(28:57):
in T bills or something that you can say with
high likelihood is going to generate ex return. There's not
much leap of faith there. Right, you can kind of
be pretty confident you're going to generate this amount of
return for this money. But if someone says, hey, this
is some crypto something and it could be really good
or exactly or whatever, just something that's more volatile that's gotten,
(29:17):
you know, there's clearly potential there. But also there's not
this linear way to get there. There isn't the clarity
or the conviction that it will work in which case
it really is. I'm betting that Marissa is going to
get me there. I don't know how, I don't know where,
I don't know how big, but I just believe in
Marissa's So here's some money, or I can give it
to the salespeople who have a plan and data and conviction.
(29:40):
That's pretty easy to believe in that they're going to
generate for me a positive return on my investment. And
so I think it's fundamentally not about does a CEO
believe in marketing? Do they believe what you just said?
I think everyone agrees with what you just said. It's
more about what hurdles you have to clear relative to
the other uses of that money. And I think that's
the harder one because around that table during buch season,
there's nine other people and they all are smart, and
(30:03):
they've all got good use for the money, and and
it ends up being a real tough decision. And the
more that you all as marketers can help quantify, build conviction,
show the plan and to your point where so break
it into pieces. I mean, that's ideal. If you can
show that you know, I'm gonna do this pilot, and
if we can generate these sorts of outcomes that's going
to generate this sort of new business which's gonna generate
this sort of revenue and eave dah, da da da dah.
(30:23):
That makes it much easier for me to do it
than just saying, listen, we're gonna jump off a cliff.
I'm gonna invent a plane on my way down, and
we're going to take off to you know.
Speaker 2 (30:31):
To the move and you know what. It's situational.
Speaker 1 (30:34):
One of the good things in my own personal career
experience of having been across so many different industries is
there's certain things that feel like truism's across the board,
But then every situation requires you to say what is
the problem and the need here? And I think that's
the honesty we as leaders forget marketers. We all have
(30:55):
to ask ourselves like, what is this? If this is
keep the amentum going, it might have different answers. Maybe
it's those salespeople that are going to do you know,
And then what is the role of marketing in that context?
Speaker 2 (31:08):
If it's we've exhausted other.
Speaker 1 (31:10):
Options and we need marketing to do well, then you
have to play the game differently. Maybe that's a lesson
we should be kind of imparting and recognizing. Is it's
not a one paint brush kind of stroke that it
has to have you use the word nuance.
Speaker 3 (31:26):
Definitely, not one size fits all. Definitely. Yeah.
Speaker 5 (31:29):
I love what you just said, and in particular you
articularly better than I did what I was saying earlier
about how what got here doesn't get you there, which
is people who have great marketers or great HR people
or great salespeople, whatever it is. Once you're sitting around
the table as a C suite or a senior executive,
you now need to help run the company, not just
run marketing or HR or whatever it is. And part
of running that company is about understanding what is needed
(31:51):
in this moment. And if you show up to that
board meeting, if you show up to that budget meeting
and just saying I want more money for my stuff
because it's fun to grow my fiefdom and da da
da da da da, You're going to come off as
tone death. And the more that you can show up
as a partner who yes, has a perspective and educated
perspective and why an investment would be valuable here. But
as a leader of the company, if you also say
(32:12):
you know what, it's kind of come out and this
means less money for me. But man, what that guy
is saying over there, that guy's saying over there, is
that's a better use of the money, or very least
not showing up as so one note as we just
need more money and we will fail if we don't.
And I'm not going to listening.
Speaker 1 (32:27):
To completely agree, completely agree. I think creativity is in Okay,
We've got these opportunities, these issues, and here's the money.
Now give me some freedom to practice micraft and do
the best with it that I know how.
Speaker 3 (32:43):
Absolutely so, one final question before we do our favorite
cool or cringe lightning round. Nahuh, I'd love to get
your perspective on you know, who is typically your right
hand person, you know, in the board, it's typically the CFO,
I would assume, correct, Oh, so you're putting I'm asking
the question. I'm asking the question.
Speaker 5 (33:02):
The CFO is critical and often becomes sort of your
right hand person. But I would argue the leaders of
the businesses, the general managers of the business tend to
be sort of equal partners.
Speaker 3 (33:11):
Yeah, sure, sure, but the CFO is obviously a key
stakeholder and all this. Yes, and there's this constant I
don't know if it's you know, kind of fictional, but
there's this struggle, this back and forth between the CFO
and the CMO, like they don't understand each other. They
don't speak the same language. You know, marketers have all
these vanity metrics that no one cares about. The CFOs
(33:32):
focused on return on invested capital and these things that
Wall Street cares about. So, you know, I'm just curious, like,
do you feel that in your experience as CEO and boards,
do you feel that cmos and CFOs actually speak the
same language. Are they on the same page or do
you feel like there really is, you know, a disconnect
between them.
Speaker 5 (33:49):
Oh, there's definitely just kind of huge. However, I got
to say, and I think it's not the CFO and
the CMO's job. I think it's the CEO's job at
some level to try to bridge that. And one of
the things we did at Sititel, for example, and I
have to say, I think it was uncomfortable for our
CMO and for a chief commercial officer, but they did
it brilliantly and it made I have to say my
(34:09):
job easy was how do we quantify this? How do
we know full well the quantification is imperfect, but whether
it's you know, measuring the number of marketing qualified leads
and how many of those turn into new business and
what's the EBIT done from those businesses, and you know,
doing the best we can with the with the flows
where we could. Honestly, it allowed the CFO and me
(34:31):
and the CMO to all talk kind of the same
language for at least a part of the budget, and
for that part when it came down to time, you know,
when we had to cut costs, we weren't looking at
the marketing budget as a cost center. We were looking
at as a driver of new business and revenue.
Speaker 3 (34:45):
I love I love that you say this, because this
is exactly what we want again and this is again,
this is why you are a great CEO. You had
a very successful exit with s I TEL. I think
this is what leadership looks like because it is the
CEO's responsibility to bring yeah, all these different parts of
the business together. And again it shouldn't be advers you know,
adversarial where you know it's paying one group against another.
(35:07):
Like again, they all need to be driving the business together.
Speaker 5 (35:10):
Thank you for that. Those are very kind words. I
gotta say, though, my job wouldn't have been possible first off,
without modern tools. I mean the fact that you can
now track all this stuff or much of this stuff
in very good ways. And the CMO and the CCO
or tie commercial officer they breaks this right. It was
uncomfortable for them. They weren't used to And frankly, no
one wants to quantify because once you quantify, you can
(35:31):
be shown to be it's not working right. Whereas when
there's no metrics, hey, you know, hey it worked great,
and can say that right. But when you actually have
metrics that means you need to you can be held
to it, you can be you can feel like you're
gonna be fired if the metrics are bad. I mean,
all all this stuff that goes with.
Speaker 3 (35:43):
It's a bad accountability. Man, No one wants it, but
it's a bad accountability.
Speaker 5 (35:47):
But I will say I appreciate and Merissa, particularly in
some of the brand stuff that I think in some
of your background that you probably did. Quantification in the
area that we played in was easier than I think
some of the areas you play in. So I you know,
in our case, you could probably quantify seventy percent of
the budget, six percent of the budget, a meaningful chunk
to the point where we didn't think about it anymore
as an easy area to cut. But I think that's
(36:08):
different when it's really long term brand type stuff, and
so I appreciate it. It was maybe easier in our situation.
But even as even easier, it was still very impressive.
They were able to embrace what I think for them
felt like a new way.
Speaker 1 (36:19):
Well really helps when you all act like you're playing
on the same team. So I agree with Stephen, you
know what that is a really nice reframe of what
a CEO's responsibility is is to get everyone sort of
thinking about how to be on team company and give
each other some grace and some trust to own their
areas and practice the art as.
Speaker 2 (36:42):
Well as the science of what we do. Because we
all want step change results.
Speaker 1 (36:46):
Sometimes it takes step change behavior and with that comes
a little risk.
Speaker 2 (36:51):
You got it, all right?
Speaker 1 (36:52):
Well, with that, we're going to take a quick break
and when we come back, we're going to play cooler
Cringe with Josh. All right, Josh, this has been a great, provocative,
interesting conversation. Now we're going to do the lightning round
version of it and just have a little fun with you.
Speaker 2 (37:11):
Are you ready?
Speaker 5 (37:12):
I'm ready?
Speaker 2 (37:13):
Okay, So cooler cringe?
Speaker 1 (37:16):
You can answer just with one of those words, or
certainly feel free to elaborate.
Speaker 2 (37:21):
Celebrity investors cringe A care to elaborate?
Speaker 1 (37:28):
Or is it just a cringe? Why is it a cringe?
You are very definitive in that answer that I love.
Speaker 5 (37:36):
I mean, I just struggle with superficiality and a lot
of times these things are about putting their name on
something without any real knowledge of the business, and it's
about getting people to George Clooney tricks that tequila must
be good. I mean, I appreciate that, and obviously it works,
so I'm not. I don't have any issue with them
doing it or anything, but it doesn't exactly fill me
with confidence that it's the best quality whatever, it has
(37:58):
any real relevance to my personal life.
Speaker 3 (38:00):
So fair enough, fair enough, cool or cringe pharma advertising.
Speaker 5 (38:06):
I have to go with cringe on that one. I
think it is a clearly it works, or they wouldn't
be doing it. At the same time, it feels a
little bit like the drug reps that you know there
There were literally millions of drug reps in the old days,
and there's very few of them now because at the
end of the day, a lot of the decisions are
being made elsewhere, and so I think the idea of
(38:28):
just inundating people with stuff that they don't fully understand,
you know, with all the little fine prints and all
the risks at the end, I just to me, it
feels off. I don't love it, and so I guess
I would say cringe, but I do appreciate it clearly works,
or they wouldn't be doing.
Speaker 3 (38:41):
It so well.
Speaker 1 (38:42):
I'll tell you just as a sidebar to that, and
we had to ask you that just you know, knowing
that that's been a part of your world, but probably
one of the best non fiction books I've read in
the past five years is Empire of Pain, which was
the whole history of the multi generational history of the
Purdue family and unfortunately the rise of oxyconton and the
(39:03):
opioid crisis. But what I didn't know until I read
that book was that family really created pharmaceutical advertising and
in a very pioneering way, but you know, in some
questionable ways too. So there's definitely a lot of cringe
along with any cool with that.
Speaker 2 (39:20):
Are you true doing one more?
Speaker 3 (39:21):
Are you last one?
Speaker 1 (39:23):
I mean, look, you've known Stephen a long time and
I've known him a long time, so we got to
do one that kind of tweaks our friends a little bit.
Speaker 2 (39:29):
Are you ready?
Speaker 3 (39:29):
Okay?
Speaker 2 (39:30):
Only fair? Sorry, Steven.
Speaker 1 (39:31):
So since we've been talking about things that do or
don't have an ROI cooler cringe a brand sponsorship on say,
I don't know, like an Arsenal soccer jersey, you know,
big expensive logo on that.
Speaker 2 (39:45):
From your standpoint, you tell us.
Speaker 5 (39:47):
Cooler grin, Wow, that one.
Speaker 2 (39:52):
We're three for three on cringe.
Speaker 5 (39:54):
That's the first for usify it, And I have to say,
I think there's all sorts of neat way. Now during
the soccer game they see the you know, the spike
in revenue or the calls or whatever it's I think
that's pretty cool. That said, when it's just on some
soccer jersey and it's a little logo, and I guess
maybe that's making a difference, But for me personally, I
would really struggle to do that.
Speaker 3 (40:13):
As you know, my wife Nura likes to call my
favorite club, Arsenal. She likes to call them the Emirates
because the Emirates is the sponsor and that's on the
front of the jersey.
Speaker 2 (40:23):
You're going to debate this a little bit.
Speaker 3 (40:25):
Oh yeah, I cannot defend it. I understand why they
do it, but you know, it is a revenue driver
and you cannot argue with results they I would say
global football clubs, they are doing very well on the
brand sponsorship level. But with that being said, Josh, thank
you so much. We really appreciate your time, We really
(40:46):
appreciate your perspective, and hopefully many other folks in private
equity can kind of give this pot of liston and
to hear your very enlightened view of understanding how marketing
is a part of the growth plan. I think there's
one takeaway. Let'sigure out what that hurdle rate is because again,
marketing drive growth. Thanks, thank you man.
Speaker 1 (41:07):
Okay, that was great, and now let's go to what's
on your minds. Our question this week comes from Jamie
and the question is how do you guys see hybrid
work evolving? What are the key factors that will shape
the next generation of workplace culture.
Speaker 3 (41:24):
It's a tough one for.
Speaker 1 (41:26):
For a minute as we think about it. I love
that Josh talked about culture. That was so refreshing. Can
we get more folks of his ILK code saying things
like culture and that it matters.
Speaker 3 (41:41):
He's a real, I think, enlightened CEO and again to
have that perspective from a private equity operator, now it's refreshing.
But I do feel that the short term nature of
so many folks, and it's tied to the future of work.
I mean, again tying it to Rosad's book Rethinking Work. Look,
I don't know. I think it's really hard because you're
seeing it more and more. It depends on the industry.
(42:01):
I mean financial services, they are all back five days
a week. They just are right, and if you don't
like it, you don't have a job. So you know,
I think the future of work looks like what work
you used to look like, and they are demanding that.
I think in tech companies it's a little bit of
a toss up. If we're being honest, it's kind of
a tale of two cities, because if you're an engineer,
(42:23):
you pretty much can call your shots, right like if
you want to work from home. I don't think companies
want to lose engineers, and so you kind of get
to pick and choose if you're going to go into
the office or not, maybe go in a few days
of the week. But for all of the non kind
of technical, non engineering folks, they're requiring them to go
back to work. I mean, you saw Amazon asking everyone
to go back to work.
Speaker 2 (42:42):
Yeah, but you also saw how that has backlash.
Speaker 1 (42:46):
And there's some really good and I'm not talking about
just even ordinary person critiquing, but really you know, smart
journalists and academics saying, yeah, hang on one second, you're
coming at it from this sort of maybe the wrong
word as Ivory Tower perch. We are not tuned in
to what your employees are saying or what the research
(43:07):
is saying about how work actually transpires, it's coming more
from your own insecurities or fears, and so I.
Speaker 3 (43:14):
Don't know, I think certain people don't care. Yeah, I mean,
if we're being honest, some of these companies, they're using
this mandate to actually have people voluntarily leave, like they
want to lay off people, but they don't want to
say they're doing a layoff, and so they're going to
do this mandatory five day a week.
Speaker 2 (43:32):
That's a little cynical, maybe, but it's real.
Speaker 3 (43:36):
Talk like that is happening. If people don't think that
is happening, they're being naive. And so I think you're
going to see increasingly and again as we go more
and more, as we start to see this exponential curve
of AI really starting to impact the way that people
could do more with a lot lot less, you're going
to see it more and more and more. And so
(43:56):
anyone listening, I actually really encourage you to actually be
in the office, right if it's inconvenient, you know, that's tough,
but I really advise everyone to be in the office,
to be in the work environment so you're visible, so
that you could actually be a part of the team,
so that leadership can see you. And again, you know,
there's some cultures that they still haven't come back to.
(44:16):
You know, a lot of days in the office. I
know a lot of nonprofits, you know, even ones that
I'm involved with, they're only going back to the office
one day a week. But it actually they have not
been able to get the productivity back the way it
used to be. So I think it's a little bit
of a toss up.
Speaker 1 (44:29):
Well, look at the beginning of the episode, we were
talking about because of AI, because of all sorts of things,
that the times you come together matter more, and you
were talking about that in the context of certain events.
Speaker 2 (44:42):
But you know what, here's the thing.
Speaker 1 (44:44):
I'd apply that to the question about what is the
future of hybrid work and to me the enlightened view.
And I'm biased because I'm in a role where I'm
commuting it, so of course I'm going to have a
viewpoint of you want to get great talent, open your
aperture a lot bit when it's possible, when it's feasible,
and of course it does vary by company, by industry.
Speaker 2 (45:06):
By role.
Speaker 1 (45:07):
But here's what I'll say is I love in person
contact as well, and so hybrid to me is the
really interesting operative world there's so many ways in which
technology has made our lives better and so many ways
in which it's made it hell in the sense that
we don't have the natural you know, work ends at
(45:29):
five and you go home. I mean, those days are
obviously long, long, long gone. But so we have to
enjoy the positives that technology lets us do certain things
like record a podcast when we're three thousand miles apart,
and then make the time together count. That to me
is the operative lesson to the culture part of the question.
(45:50):
Make it feel like there isn't a culture divide when
you're virtual, and then when you're together, really use that
time wisely, because that's real.
Speaker 3 (46:00):
I agree with that. If you're going to come into
the office and just be on zooms in an office
with the door closed, then just stay at home, right,
But if you're going to be in the office, obviously
make account.
Speaker 2 (46:09):
Make account.
Speaker 3 (46:10):
But again it depends on the culture, because if everyone
else is going to be in there, you don't want
to be the odd man or.
Speaker 1 (46:15):
Woman without Well, fair enough, that is it for now.
Thanks for listening. We hope you like what you're hearing,
and if you haven't fully subscribed to the brand new podcast,
If you'd like us to answer one of your questions,
just tell us what's on your mind by emailing us
at ideas at brandashnew dot com. Don't forget to follow
us on all of our socials, and we will see
(46:37):
you next time on brand New
Hello, and thanks for joining us on brand new from
the iHeart Podcast Network and brand New Labs.
Speaker 2 (00:12):
I'm Marissa Thalberg and I'm.
Speaker 3 (00:13):
Steven Wolf Beta. So good to see you. Marissa.
Speaker 1 (00:18):
Hello, partner, It's good to see you back through screens.
But we had a moment of togetherness about a week
ago at a conference which was always a treat.
Speaker 3 (00:29):
What was it forty eight hours in real life, and
we got to be together and actually have a meal
and just actually spend some quality time, see a.
Speaker 1 (00:36):
Lot of our favorite industry colleagues and friends, get recharged
and inspired by that, and then we were back off
in separate directions again.
Speaker 3 (00:44):
Huh yeah. But you know, it's just such an interesting
time because we're in full blown, you know, kind of
conference circuit, but not just you know, kind of things
related to marketing or media or advertising. But you were
actually at an event that actually was kind of a
throwback to your old days in the beauty industry.
Speaker 1 (01:00):
Right, definitely not a conference, but I went from that event.
I was supposed to fly from that event just back
home and back to work. But when I learned that
my new colleague with whom I've already just established such
a great rapport was being honored at a big event
that's iconic in the beauty industry. I knew that it
(01:21):
was worth it to instead fly to New York.
Speaker 2 (01:24):
I mean, it was kind of crazy. I got off
the plane, thank goodness for once my plane was on time,
got to the hotel.
Speaker 1 (01:31):
Great thing about now being back in a retail environment
is there was hair and makeup provided. I was so
happy because I was up at four in the morning.
Speaker 3 (01:39):
It's the details, Marissa, the little things.
Speaker 4 (01:41):
The little things, the little things, and it was a
really amazing, surreal moment of when you get to feel
all your lifetimes kind of coalesced together like that.
Speaker 1 (01:55):
Saw a colleague who had been our chief legal counsel
when I was ahead of global advertising at Unilever Cosmetics International.
This was this is a very long time ago. It's
just like this was well over twenty years ago. And
then I saw some people from of course my Esday
latter days and then and now I'm with all these
new colleagues and people.
Speaker 5 (02:16):
It was just it.
Speaker 2 (02:17):
Actually felt really great. I was on a high from that.
I have to say, Look.
Speaker 3 (02:22):
I think, especially as we go more and more into
this AI era, there's going to be such a premium
on in real life experiences. So true. We already see
it that everyone's on their devices, but people are lonely.
They are craving togetherness. And when you have the opportunity
to kind of be together in a real world situation,
I think those are going to be highly, highly valued
(02:43):
and coveted.
Speaker 1 (02:44):
That's a real insight. It's a real insight. So, speaking
of which, first dinner event for Alpha and Company, Yeah, no.
Speaker 3 (02:53):
I mean so, I also travel to New York. I
was actually with also some former colleagues to be a
part of something that Rashad Tobakawaala was doing.
Speaker 5 (03:03):
Smart.
Speaker 3 (03:04):
He's just so insightful. If you have not subscribed to
his sub stack, please do. But Rashad is kind of
truly like the Yoda to so many folks in our industry.
And he actually has a new book called Rethinking Work
coming out. But he held a salon session and I
moderated a panel of him and our dear friend Troberman
from iHeart, and we were talking about AI, of course,
(03:26):
because it's in every conversation, but again, how do you
talk about it in a substantive way? You know, Rashad
just had such a smart you know, ref on it
because obviously, you know everything with artificial intelligence and how
it's the automation of automation, but he was also focusing on,
you know, what does human intelligence look like in this
AI era? This really makes you think about like what
are we going to really be able to do? How
(03:46):
do you really think about where we add value? And
that kind of leads into Alpha, my new company doing
these dinners, you know, to just trying to convene folks
to really have substantive conversation around a variety of different
topics and the intersection with AI. So we actually had
one in a Los Angeles with creators and AI that
was co hosted with our friends over at Whaler, you know,
(04:08):
Neil Waller and that crew. It was just wonderful to
have just such an interesting cross section of technologists, investors,
creative people, agency people, brand people, publishers, just really looking
at all the different touch points and you know, everyone
is kind of struggling with how to kind of think
about moving forward. And again, this is not linear, It's
(04:29):
going to be exponential, and so I just really I'm
on this just this you know, kind of mandate to
really get everyone to think about how to get AI
ready because it's coming and you know it's going to
hit people right in the forehead before people realize it.
Speaker 1 (04:43):
So between the Reshot event, his book, your event, getting
all these people together, were there any.
Speaker 2 (04:50):
Really juicy takeaways that you can share with me and
with everyone.
Speaker 3 (04:55):
I mean, there are a lot of juicy takeaways. I
think one of them is I think people are are
really really you know, kind of in two camps. There
is the camp that has their head in the sand
and they really don't think that you know, it's something
to worry about right now, or it's going to come
down the pike. But again, you know, not not for
right now. They're kind of just going about their lives.
(05:18):
And then they're the folks that are kind of really petrified.
And I think some of them have actually been impacted already.
You know, a friend of ours who is the CMO,
she actually had her role eliminated. Effectively, she got pushed
out because half of her role was tucked under sales
and the other half of it was kind of tucked
under a product. And now she's kind of out of
(05:40):
a role. So it's starting to happen. But again, like,
how do you get AI ready? How do you go
on the offense. And again, I feel like it's very
timely to make a nice little transition to our special
guest today is really trying to think about how do
we reframe this marketing conversation, and you know, kind of
tied to our marketing and the money series, I wanted
(06:01):
to bring one of you know, my dearest friends. His
name is Josh Schultz, and Josh is now an operating
partner at a mid market private equity firm. But prior
to that, he was a CEO of a life sciences
company called Sitel. They were just a real leader in
advanced analytics and data in life sciences. Before that, he
was a senior executive at a company called park Cel.
(06:22):
He was there for I think thirteen plus years, and
he's super smart. He was an entrepreneur. He did a
pharma tech company where he's capital for that, he was
in consulting, and you know, he's just now in this
private equity world. I thought it would be really interesting
to kind of get that purview of private equity on marketing.
So let's talk to Josh Morrison and we are ready
(06:48):
to kick off our special guest, Mister Joshua Schultz here
on brand new Josh. Welcome, Welcome, Josh, Hey, thanks for
having me, Marissa, You're meeting one of my dearest friends.
He is someone that I've known for a very long time.
But I am thrilled to actually have you here, Josh,
especially with this whole theme of you know, talking about
(07:09):
marketing and money. Your background. I gave a little bit
of your bio before, but you know, you were the
CEO of pharma related company called Citel. You're now an
operating partner at a mid market pe firm. Help us
understand a little bit of just like your perspective and
your kind of engagement with the world of marketing.
Speaker 5 (07:28):
Happy to you know. In the life sciences and life
sciences services industry, on particular life science service industry where
we serve big pharm companies, marketing and sales are largely
driven by business development professionals. It's largely driven by subject
matter experts seller doers. In the case of services, brand
is important, but it's probably not the number one thing
(07:49):
that might be in CpG or some of the other areas,
which is ironic maybe because pharmaceutical companies obviously there's a
big role that brands play there, but in terms of
selling to what is a relatively small a set of businesses.
The role of brand is probably less important in the
companies that I've worked for, although it has still been
a factor for sure.
Speaker 1 (08:07):
I think that's okay in the sense that we want
to bring in trusted voices and kind of a real
dialogue from the different seats at the table that we
might have. And you've had this really interesting seat and
a few different contexts from inclusive being an operating roles yourselves,
but then back in kind of the money side, the
(08:27):
private equity side, the investing side.
Speaker 2 (08:29):
And it's funny.
Speaker 1 (08:30):
I was just having this conversation this week with the
context of my new company and finding myself quoting something
I know I've heard and said many times, which is,
you can't cut your way to growth. And I'm curious,
do you agree with that? And in that context do
you see marketing And you don't have to speak from
a farmer land, just speak from someone who's thinking about
(08:51):
wanting to get a great return of investment in a company.
Do you see marketing as an essential investment generally speaking,
or more of a cost to be managed?
Speaker 5 (09:00):
You know, it's a great question, and so first off
both by just kind of my own personal proclivities, but
also very much the sorts of private equity firms that
I've been familiar with, which I think is probably the
majority of them, although I can't speak for all of them,
but generally speaking, private equity wants to build great businesses,
and they reason they want to build great businesses is
because you can celebrate businesses for more money at the
(09:20):
other end of your whole period, and so building great businesses.
There's a whole variety of things that a private equity
firm thinks about doing when it buys a company, things
like putting in place scalable processeds and systems, perhaps bringing
in a management team with an orientation towards a bigger
and maybe different, better, hopefully company, but also things like
(09:42):
investment in commercial investment in product. I mean, I've personally
done those things in the contents of privat ecty back company.
I've personally been involved in those on the private ectority side,
helping companies to implement those. So generally speaking, there's huge
alignment that you have to invest more to grow more,
the idea that you're in a cograway to glory that
maybe some private equity firm playbooks, But it is not
(10:04):
I think it's probably not the typical one that said.
The big question to me, and I think for purpose
of this conversation is of all the many ways that
you can drive growth, marketing is only one of those.
And in many cases, as CEO, you have to work
amongst a bunch of very articulate senior executives who are
(10:24):
all advocating that investments in their pot is going to
drive more growth. And so do you believe the product person?
Do you believe the sales guide? Do you believe the
HR person who's saying, well, if we have a better
culture will have less pletrician betweens? All of the various
ways of spending money to drive growth, that is the
hard part, and I think that's the milieu that marketing
(10:44):
and brand in particular has to compete for scarce investment.
Speaker 1 (10:48):
Dot really well said, I'm really fair, and I would
just say that I think the most enlightened cmos who've
graduated from just thinking of themselves as functional leaders to
being enterprise leaders who care, you know, are part of
a management team of a company, don't want to carry
the whole burden that all of growth in the company
(11:09):
rests on their shoulders. That's actually an unfair burden. I'd
say to put on a marketer shoulders. You need to
have other pistons firing across the company to make it work.
But you're right, there is a battle for resources and marketing.
I mean, maybe this is my bias, Stephen. You jump
into like marketing is often an easy one to see
(11:31):
us expense and cut.
Speaker 3 (11:33):
That was a little bit of the conversation that we
had Josh, you know previously, which is all intents and purposes,
the CEO is really a portfolio manager, right when you
really think about all the different functions. You know, your
cfo's role is pretty well delineated. Your CTO, you know,
your chief revenue officer, I think chief marketing officer is
probably the murkiest, but you are really the allocator of
(11:55):
capital and help you know, kind of share that perspective.
You know, I thought you had a really good insight
into terms of looking at the return of investment on
that incremental dollar and kind of what are the hurdle
rates that you're actually looking at your marketing executive to
actually clear because you had a very specific way to
kind of phrase it.
Speaker 5 (12:11):
Well so sure, although I want to come back to
your point in a moment about the hurdle rate that
your marketing executive needs to clear, because even talking about
or thinking in that way, I would argue, is pretty
uncomfortable for a lot of folks, not just marketers, by
the way, but so generally speaking. You know, there is
a typical private equity return in the mid market is
about two and a half times, which means you've got
to grow in about twenty percent top line two and
(12:33):
a half times what exactly right, two and a half
times the original invested capital. So I invest one hundred bucks,
I want to be able to deliver two earn and
fifty dollars in five to seven years, which is an
average hole period. So doing that, if you grow about
twenty percent and a little bit of leverage aka debt,
ideally make the company more interesting, which means people are
willing to pay a higher multiple of your profitability than
(12:53):
maybe when you bought it. All these various things come
together to try to get to the sort of returns
that the investors in private equity companies expect, And when
you're looking at that, this goes mercy to your point
a moment ago, it's very hard to get two and
a half times by cutting your way to glory, very
tough to do. As a matter of fact, you can't. However,
if you can grow the top line through a variety
(13:13):
of means, whether it's better product or better marketing, or
more sales people, better salespeople, whatever it is, there are
ways to get there. But you as the CEO, and frankly,
I would argue you as any the executive team has
to be thinking about it in that lens of how
am I going to drive the most growth for more capital?
Almost certainly, but not infinite capital. So that actually that
leads me, Steve to your point that you just made
(13:34):
a moment ago and I just want to highlight it
for a second. One of the most interesting transformations that
I've seen with executives that I've worked with, and this
is true general counsel, LEO, folks, HR, commercial CTOs. Every
single person around that table also needs to transform from
what got them to that place, which was probably being
(13:55):
great at HR. But frankly, I don't need a great
HR person be my CHR. I need someone who understands
the business dynamics that we're all facing and helps me
solve those with an expertise in HR and by the way,
that means inevitably, if I'm going to make an investment
in something, there needs to be a commitment to deliver
a return on that investment in a quantified way. Same
(14:16):
thing I would argue with marketing. If you're a great marketer,
that's one thing, But for you to be able to
engage with me about how we're going to run the business.
And it may be that the right answer is less marketing.
Probably not, but that may be the answer. Another answer
may be we're going to invest heavily in marketing, but
I need to know that when I spend ten million
(14:36):
dollars on this strategic marketing brand two point zero plan
that you've got, I'm going to need confidence that that's
going to be a better use of the money than
more salespeople, more product, more or whatever it is. That
requires a commitment, though, and a quantification of the output.
That is very hard and I think a lot of marketers.
(14:56):
Certainly twenty years ago marketers really didn't have a nice
clean way to quantify. Now there's much better ways, although
it's still far from perfect, but that ability to convict
to provide conviction and quantification of that investment makes my
job about who to give the money to much easier.
Speaker 3 (15:13):
But demensialize that does. To continue with that point, So
if your EBITDA margin right, your earnings before interest, taxes, depreciation, amortization,
that is, you know, kind of the key proxy for
cash flow. So your EBITDA margin is called it twenty percent,
and your head of marketing says, you know, I want
ten million dollars to do brand two dot O. How
would you be thinking of the hurdle rate?
Speaker 5 (15:34):
Like?
Speaker 3 (15:34):
Do just use that example just for our listeners.
Speaker 5 (15:37):
Well, obviously depends on the size of the company all
the rest of the stuff. But the best way to
think about it is not in terms of EBITDA. But
let's say I must spend ten million dollars, and with
ten million dollars, let's say I could hire twenty salespeople,
and each one of those salespeople on average generally three
and a half million bucks of revenue. Three and a
half million dollars of revenue is seventy million dollars of
revenue across those twenty people, and then that's seventy million
(15:58):
has an EBITDA margin of let's say twenty percent, that's
fourteen million bucks, So fourteen million bucks of return and
my ten million dollars investment. Now, of course it's nothing's
ever that linear, right. Inevitably, there are also you know
that not all twenty will work out, and some of
them will exactly all the things, so there's nothing that
is perfect, there's no straight line. At the same time,
if I've got fifty other salespeople and on average they
(16:20):
all generate three and a half million dollars of new
sales every year, and my commercial head says I can
hire twenty more people. I'm confident I can do it, Josh,
And then the marketing person shows them and says, I
want ten million dollars. And by the way, words words, words, words, words,
but no conviction, no quantification to anything else. That's a
hard balance, right, It's a very hard position to put
(16:40):
the CEO in, who then has to decide which of
these is more plausible. And the fact is the CEO
may have all the respect in the world for marketing,
they have all the respect the world for product and
all the rest of it. But when you're allocating these dollars,
the person who can give you the highest conviction of
the best return is where the dollars are going to
go inevitable. And so I do think there's an imperative
(17:02):
for marketing to continue to try to get quantification as
much as possible and understand that the CEO fundamentally has
to make decisions based on that data. And the less
faith that you inflict upon them, the more likely they
are to invest in your in your era.
Speaker 1 (17:19):
And look, when you say it that way, of course
it makes sense. But let me take your example and
put it just in a marketing microcosm, because I think
it epitomizes the dilemma that we have and the problem
over our marketing has come to today.
Speaker 3 (17:36):
All right, So.
Speaker 1 (17:37):
Now let's say you're sales guy from another function. His
name is paid Search Marketing, and he's raising his hand
and saying, just give me a dollar, and I'm going
to give you five back. And then over here is
someone who's saying, no one really has understanding beyond the
people who are kind of already aware of us, of
(17:58):
this brand, and we need more customers, so I need
to go build that brand.
Speaker 2 (18:03):
Give me a dollar. I can't tell you today.
Speaker 1 (18:06):
With that same certainty that I'm going to give you
five dollars out tomorrow. But I'm telling you, if we
don't do this, the well dries up. That is to me,
like the problem is you're sitting there, and I get it.
If I'm sitting in that, the temptation to say, well,
I'm going to go for that, like I'll give you
a dollar, now I get five back, accept bigger picture,
(18:29):
what happens to the long term success of the company.
Speaker 2 (18:32):
And it really is an example.
Speaker 1 (18:34):
And now I'll get to a question, which is how
do you help your peers or how do you yourself
think about short term versus long term?
Speaker 5 (18:44):
It's a great question. So let me answer that in
two different ways. So the first one is that there
are things like culture that I have enormous appreciation for,
enormous respect for, and I believe is one of the
most powerful tools that a company can create that a
CEO can invest it, right, And just like kind of
(19:05):
what you're describing here where it's kind of longer term,
the use of the investment in brand to create longer
term value culture is very similar, right, which is very quantifying.
No one doubts that is powerful, No one doubts it's valuable.
No in doubts deserves investment, but how much when what
am I going to get back for it to c
very tough to answer in many cases. And by the way,
(19:25):
as the CEO, I mean, it'd be great and frankly
be easy if everything was quantifiable and simple and which case, honestly,
you don't need a CEO. You seed a computer and
you just you know, it's simple sheet on the company.
A lot of the job, at least from my experience,
is when you don't have the data and you do
have to go on gut. But what happens all the
time and you have to make those calls all the time,
and it's part of the job. Part of my job
(19:48):
was making my job easier by trying to push things
to as much quantification as possible, so that instead of
underlying anecdotes or who I like more or who's more
articulate or more charismatic, that we at least try to
weigh things apples and apples as much as possible, recognizing
that there's certain things you just can never do that
for and there's a lot of grain, So first off,
that's generally a hard thing to do. There's one other
(20:10):
way they would answer question ers, which is an interesting
one in the private equity context. So, as I mentioned earlier,
private equity tends to hold companies for five to seven years.
To be clear. On one hand, you'd say, well, that
means on you know, a year five or year six,
you should you know, cut costs and slash and burn,
and you know you don't care what happens to the
company the day after you sell it. That's actually also
very simplistic and not accurate, because the fact is, no
(20:32):
one wants to buy a company that is going to
fall apart the next day. Right. These are all sophisticated buyers,
sophisticated sellers who often, by the way, are buying and
selling from each other multiple times. It's an iterated prisoner's blemma.
There is no situation where you can just have a
company that's on duct tape and straying and falls apart
the next day. So buyers want to buy a company
that has a great future, and you want to create
(20:54):
a company that has a great future for those buyers. However, well,
that is all true, and is very much of ultra true.
The fact that when you're in year four of your
whole period, the idea of spending an extra ten million
bucks on brand work that may not pay off for
three or five or eight years and will not really
be visible a year and a half or two from
(21:15):
now when you come to sell. Is a tricky question, right,
And it's the sort of thing where it's a little
bit like investing in culture in year four or five.
It's a little bit like investing in some new product
that you won't really have in the market, and it's
just going to be kind of a dream and son's
eye a year or two from now. It creates a
little bit of difference, depending on where you are in
the whole period, what sort of investments make sense to
(21:36):
make in the context of private equity. And like I said,
it's I don't want to be black and white about it.
It's not a black and white question, but there is
a dynamic there that is worth thinking.
Speaker 3 (21:44):
This is exactly the real talk that we wanted, Josh,
because there's nuance to all of this, right. You know,
you can't just paint all private equity as you know,
bad or slash and burn. Like Again, they're very sophisticated
buyers and to your point, they usually buy from each other.
It's also a very different time horizon from venture capital
where it's obviously smaller dollars, they have much higher hurder
(22:05):
rates in terms of their expected returns. You know, but
I want to look at it from a different vector,
like when you actually are presented to your board, and
this is one of the things that we see oftentimes
there is really no one representing marketing in the boardroom.
And I have a thesis that you know we've discussed
in the past, which is, I think marketing needs to
(22:25):
reinvent itself. And really marketing is truly just a tactic.
But if I were to tell you, hey, we need
to invest in our customer, and who is representing the customer?
I think that gets more of a CEO's year. And
certainly the board cares about customers versus marketing and tactics,
and so how do you view that whole conversation, Like
(22:45):
is that accurate? Is that a valid thesis that you
would rather talk about customers than talk about marketing, And
does marketing really have a marketing problem?
Speaker 5 (22:54):
That's an interesting point. Hearing the voice of the customer
is really valuable to I believe everybody and certainly to board.
I think the more that you can talk about here's
what the customer is thinking about here's why they like
or don't like us, here's why they're buying or not
buying from us. I think that's profound, valuable stuff, and
the more that you can position it that way, the better.
I also reflect back on the last thousand board packs
(23:17):
that I've put together, the number of pages that have
numbers on them is ninety eight percent of them, and
the pages with numbers on them, sixty percent of the
text is numbers. Right, I'm exacting a little bit, maybe,
but not much. The fact is, the huge focus is
on numbers. It's on quantification. And if you can't play
(23:38):
in that milieu, if you can't quantify, if you can't
make commitments, it's words. And I will tell you one
of the things that my experience of privatecor I don't
think it's just private, I think it's corporate world more broadly,
is that words are cheap. Right. There are lots of
super articulate, super chrismatic people who can say I'm this.
Speaker 3 (23:54):
You get a dagger in the heart of every copywriter.
Speaker 1 (23:57):
Maybe I'm such a word person anybody and dagnard of me.
Speaker 3 (24:05):
But I'm a numbers guy. And again, this is exactly
the conversation that we need to have.
Speaker 1 (24:09):
I have to say, Stephen, I'm feeling your inner finance
peak is coming out.
Speaker 2 (24:13):
Full bloom in this episode.
Speaker 5 (24:15):
It's really kind of wild. As someone who loves the
one word, I actually think it's how you get those
numbers is often through words, right, So I don't mean
to imply for a second that word important. But when
it comes to making investments and board meeting sort of discussions,
et cetera, if it's just really great ideas, Because every
one of those board folks, they're all older folks who
(24:37):
have done lots of pattern recognition, and the number of
times that someone has come up and done some song
and dance with all sorts of great pictures and then
gone off and it didn't work is many. They've all
seen it a million times. And so if you can't
show a path, and by the way, an example is
that little made up example of salespeople. If I can
show you that on average three and a half million,
and I'm gonna hire twenty of them, and it kind
(24:59):
of gets you to a place where it's tillis return
for ten million dollars investment, they can all see that
there's a path. They understand how you're going to get there.
It's the more they have to believe in you. It's
just a higher hurdle because they've all seen super smart,
super particular people.
Speaker 3 (25:12):
Not But then bring it back to the customer conversation,
because who is really the voice of the customer in
the boardroom?
Speaker 5 (25:19):
Typically the chief commercial officer in my world in life
science is a services world, is the chief commercial office
who's got the salespeople. The salespeople are out there talking
to clients every day, and then the business leaders who
also hopefully are talking to clients every day. And I
will tell you when someone speaks in a real way
about what the customer is thinking, and not just like
once again, not just random words that they kind of
(25:40):
took off of whatever, but like, because I talked to
so and so yesterday, I spoke with so and so yesterday,
I got this analysis, this data. That stuff is very
powerful because at the end of the day, that growth
is what matters, and everyone knows that if you understand
what the customer wants, you've got a much better chance
of delivering that growth. So I think the voice of
the customer, the true voice of the customer, is one
of the most valuable things you can get. And that's
(26:02):
an area where to your point, if marketing was much
more of that, it would resonate really well with it.
Speaker 3 (26:07):
I think it is a lot more of that. I
do too, and I think that's part of our branding issue. Yeah,
because if you look at who is talking to customers,
it's usually the marketers. A lot of folks don't want
to talk to salespeople because they don't want to be
sold to. And so I mean, Marisa, like, I feel
like you live this every day, right, I.
Speaker 1 (26:24):
Do, And I look, I have enormous respect for what
you're saying. I think it's really important to be able
to have this kind of conversation and to say it
in a real way of sort of trying to understand
what the pain points are for each other. And again,
like at the end of the day, if we were
sitting you working for the same company together as whether
(26:45):
it's CEO or CMO or investor or whatever, you're going
to have healthy debate. At the end of the day
you realize you're all trying to get it the same thing.
Speaker 2 (26:53):
The one part that.
Speaker 1 (26:55):
Is missing from the equation, the math equation in this
that I'd push back and also ask how do you
do it? Is? Yes, everyone's probably been burned by someone
who did a fancy song and dance and then didn't deliver,
and it's like, ou, so just give me the tried
and true. The reality is there are a lot of
hard businesses, whether it's a small brand trying to compete
(27:15):
against much bigger ones, a new player, a turnaround where yeah,
I think you were kind of using this example of war.
What got you here is not going to get you there,
and it's going to be some secret sauce, some unproven thing,
some trying things differently to get to a step change result.
Speaker 2 (27:35):
That for me is the art.
Speaker 1 (27:36):
I mean there is, there is some instinct involved, there's
some trust and confidence and I guess the but is
it well, I don't think it's just words, but I
think maybe I'll answer my own question, but then throw
it back to you. Is is it that you know
you want to feel like the person who's asking you
to take a leap of faith isn't going to make
(27:57):
that a death defying leap. So there's always some kind
of failcy if involved, whether it's piloting something, whether there's
a backup plan, whether there's Okay, let's give this a try.
We're going to try it for this long. If this
doesn't work, then we do that. I mean, how do
you help get comfortable when it's not perfectly predictable on
a spreadsheet?
Speaker 5 (28:15):
Yeah? Absolutely. And by the way, there's so much nuance here.
And I'm actually to look in this conversation, and in
this case, the nuance is not about I don't think
there's any reasonable CEO on the planet who doesn't understand
that marketing can be super valuable. Not. I mean, yeah,
it's of course. It's like saying culture is in valuable.
I mean, I'm sure this ism out there who don't
(28:35):
believe it, but they're morons, right. Of course marketing matters.
Of course, things like culture matter. The challenge that is
faced is not whether or not marketing matters. It's what
hurdle do I have to clear to believe that the
ten million dollars spent with Marissa is going to generate
a really positive return versus the ten million dollars I
spend on everything else or anything else. Let me ask
you the question, right, if someone gives you an investment
(28:57):
in T bills or something that you can say with
high likelihood is going to generate ex return. There's not
much leap of faith there. Right, you can kind of
be pretty confident you're going to generate this amount of
return for this money. But if someone says, hey, this
is some crypto something and it could be really good
or exactly or whatever, just something that's more volatile that's gotten,
(29:17):
you know, there's clearly potential there. But also there's not
this linear way to get there. There isn't the clarity
or the conviction that it will work in which case
it really is. I'm betting that Marissa is going to
get me there. I don't know how, I don't know where,
I don't know how big, but I just believe in
Marissa's So here's some money, or I can give it
to the salespeople who have a plan and data and conviction.
(29:40):
That's pretty easy to believe in that they're going to
generate for me a positive return on my investment. And
so I think it's fundamentally not about does a CEO
believe in marketing? Do they believe what you just said?
I think everyone agrees with what you just said. It's
more about what hurdles you have to clear relative to
the other uses of that money. And I think that's
the harder one because around that table during buch season,
there's nine other people and they all are smart, and
(30:03):
they've all got good use for the money, and and
it ends up being a real tough decision. And the
more that you all as marketers can help quantify, build conviction,
show the plan and to your point where so break
it into pieces. I mean, that's ideal. If you can
show that you know, I'm gonna do this pilot, and
if we can generate these sorts of outcomes that's going
to generate this sort of new business which's gonna generate
this sort of revenue and eave dah, da da da dah.
(30:23):
That makes it much easier for me to do it
than just saying, listen, we're gonna jump off a cliff.
I'm gonna invent a plane on my way down, and
we're going to take off to you know.
Speaker 2 (30:31):
To the move and you know what. It's situational.
Speaker 1 (30:34):
One of the good things in my own personal career
experience of having been across so many different industries is
there's certain things that feel like truism's across the board,
But then every situation requires you to say what is
the problem and the need here? And I think that's
the honesty we as leaders forget marketers. We all have
(30:55):
to ask ourselves like, what is this? If this is
keep the amentum going, it might have different answers. Maybe
it's those salespeople that are going to do you know,
And then what is the role of marketing in that context?
Speaker 2 (31:08):
If it's we've exhausted other.
Speaker 1 (31:10):
Options and we need marketing to do well, then you
have to play the game differently. Maybe that's a lesson
we should be kind of imparting and recognizing. Is it's
not a one paint brush kind of stroke that it
has to have you use the word nuance.
Speaker 3 (31:26):
Definitely, not one size fits all. Definitely. Yeah.
Speaker 5 (31:29):
I love what you just said, and in particular you
articularly better than I did what I was saying earlier
about how what got here doesn't get you there, which
is people who have great marketers or great HR people
or great salespeople, whatever it is. Once you're sitting around
the table as a C suite or a senior executive,
you now need to help run the company, not just
run marketing or HR or whatever it is. And part
of running that company is about understanding what is needed
(31:51):
in this moment. And if you show up to that
board meeting, if you show up to that budget meeting
and just saying I want more money for my stuff
because it's fun to grow my fiefdom and da da
da da da da, You're going to come off as
tone death. And the more that you can show up
as a partner who yes, has a perspective and educated
perspective and why an investment would be valuable here. But
as a leader of the company, if you also say
(32:12):
you know what, it's kind of come out and this
means less money for me. But man, what that guy
is saying over there, that guy's saying over there, is
that's a better use of the money, or very least
not showing up as so one note as we just
need more money and we will fail if we don't.
And I'm not going to listening.
Speaker 1 (32:27):
To completely agree, completely agree. I think creativity is in Okay,
We've got these opportunities, these issues, and here's the money.
Now give me some freedom to practice micraft and do
the best with it that I know how.
Speaker 3 (32:43):
Absolutely so, one final question before we do our favorite
cool or cringe lightning round. Nahuh, I'd love to get
your perspective on you know, who is typically your right
hand person, you know, in the board, it's typically the CFO,
I would assume, correct, Oh, so you're putting I'm asking
the question. I'm asking the question.
Speaker 5 (33:02):
The CFO is critical and often becomes sort of your
right hand person. But I would argue the leaders of
the businesses, the general managers of the business tend to
be sort of equal partners.
Speaker 3 (33:11):
Yeah, sure, sure, but the CFO is obviously a key
stakeholder and all this. Yes, and there's this constant I
don't know if it's you know, kind of fictional, but
there's this struggle, this back and forth between the CFO
and the CMO, like they don't understand each other. They
don't speak the same language. You know, marketers have all
these vanity metrics that no one cares about. The CFOs
(33:32):
focused on return on invested capital and these things that
Wall Street cares about. So, you know, I'm just curious, like,
do you feel that in your experience as CEO and boards,
do you feel that cmos and CFOs actually speak the
same language. Are they on the same page or do
you feel like there really is, you know, a disconnect
between them.
Speaker 5 (33:49):
Oh, there's definitely just kind of huge. However, I got
to say, and I think it's not the CFO and
the CMO's job. I think it's the CEO's job at
some level to try to bridge that. And one of
the things we did at Sititel, for example, and I
have to say, I think it was uncomfortable for our
CMO and for a chief commercial officer, but they did
it brilliantly and it made I have to say my
(34:09):
job easy was how do we quantify this? How do
we know full well the quantification is imperfect, but whether
it's you know, measuring the number of marketing qualified leads
and how many of those turn into new business and
what's the EBIT done from those businesses, and you know,
doing the best we can with the with the flows
where we could. Honestly, it allowed the CFO and me
(34:31):
and the CMO to all talk kind of the same
language for at least a part of the budget, and
for that part when it came down to time, you know,
when we had to cut costs, we weren't looking at
the marketing budget as a cost center. We were looking
at as a driver of new business and revenue.
Speaker 3 (34:45):
I love I love that you say this, because this
is exactly what we want again and this is again,
this is why you are a great CEO. You had
a very successful exit with s I TEL. I think
this is what leadership looks like because it is the
CEO's responsibility to bring yeah, all these different parts of
the business together. And again it shouldn't be advers you know,
adversarial where you know it's paying one group against another.
(35:07):
Like again, they all need to be driving the business together.
Speaker 5 (35:10):
Thank you for that. Those are very kind words. I
gotta say, though, my job wouldn't have been possible first off,
without modern tools. I mean the fact that you can
now track all this stuff or much of this stuff
in very good ways. And the CMO and the CCO
or tie commercial officer they breaks this right. It was
uncomfortable for them. They weren't used to And frankly, no
one wants to quantify because once you quantify, you can
(35:31):
be shown to be it's not working right. Whereas when
there's no metrics, hey, you know, hey it worked great,
and can say that right. But when you actually have
metrics that means you need to you can be held
to it, you can be you can feel like you're
gonna be fired if the metrics are bad. I mean,
all all this stuff that goes with.
Speaker 3 (35:43):
It's a bad accountability. Man, No one wants it, but
it's a bad accountability.
Speaker 5 (35:47):
But I will say I appreciate and Merissa, particularly in
some of the brand stuff that I think in some
of your background that you probably did. Quantification in the
area that we played in was easier than I think
some of the areas you play in. So I you know,
in our case, you could probably quantify seventy percent of
the budget, six percent of the budget, a meaningful chunk
to the point where we didn't think about it anymore
as an easy area to cut. But I think that's
(36:08):
different when it's really long term brand type stuff, and
so I appreciate it. It was maybe easier in our situation.
But even as even easier, it was still very impressive.
They were able to embrace what I think for them
felt like a new way.
Speaker 1 (36:19):
Well really helps when you all act like you're playing
on the same team. So I agree with Stephen, you
know what that is a really nice reframe of what
a CEO's responsibility is is to get everyone sort of
thinking about how to be on team company and give
each other some grace and some trust to own their
areas and practice the art as.
Speaker 2 (36:42):
Well as the science of what we do. Because we
all want step change results.
Speaker 1 (36:46):
Sometimes it takes step change behavior and with that comes
a little risk.
Speaker 2 (36:51):
You got it, all right?
Speaker 1 (36:52):
Well, with that, we're going to take a quick break
and when we come back, we're going to play cooler
Cringe with Josh. All right, Josh, this has been a great, provocative,
interesting conversation. Now we're going to do the lightning round
version of it and just have a little fun with you.
Speaker 2 (37:11):
Are you ready?
Speaker 5 (37:12):
I'm ready?
Speaker 2 (37:13):
Okay, So cooler cringe?
Speaker 1 (37:16):
You can answer just with one of those words, or
certainly feel free to elaborate.
Speaker 2 (37:21):
Celebrity investors cringe A care to elaborate?
Speaker 1 (37:28):
Or is it just a cringe? Why is it a cringe?
You are very definitive in that answer that I love.
Speaker 5 (37:36):
I mean, I just struggle with superficiality and a lot
of times these things are about putting their name on
something without any real knowledge of the business, and it's
about getting people to George Clooney tricks that tequila must
be good. I mean, I appreciate that, and obviously it works,
so I'm not. I don't have any issue with them
doing it or anything, but it doesn't exactly fill me
with confidence that it's the best quality whatever, it has
(37:58):
any real relevance to my personal life.
Speaker 3 (38:00):
So fair enough, fair enough, cool or cringe pharma advertising.
Speaker 5 (38:06):
I have to go with cringe on that one. I
think it is a clearly it works, or they wouldn't
be doing it. At the same time, it feels a
little bit like the drug reps that you know there
There were literally millions of drug reps in the old days,
and there's very few of them now because at the
end of the day, a lot of the decisions are
being made elsewhere, and so I think the idea of
(38:28):
just inundating people with stuff that they don't fully understand,
you know, with all the little fine prints and all
the risks at the end, I just to me, it
feels off. I don't love it, and so I guess
I would say cringe, but I do appreciate it clearly works,
or they wouldn't be doing.
Speaker 3 (38:41):
It so well.
Speaker 1 (38:42):
I'll tell you just as a sidebar to that, and
we had to ask you that just you know, knowing
that that's been a part of your world, but probably
one of the best non fiction books I've read in
the past five years is Empire of Pain, which was
the whole history of the multi generational history of the
Purdue family and unfortunately the rise of oxyconton and the
(39:03):
opioid crisis. But what I didn't know until I read
that book was that family really created pharmaceutical advertising and
in a very pioneering way, but you know, in some
questionable ways too. So there's definitely a lot of cringe
along with any cool with that.
Speaker 2 (39:20):
Are you true doing one more?
Speaker 3 (39:21):
Are you last one?
Speaker 1 (39:23):
I mean, look, you've known Stephen a long time and
I've known him a long time, so we got to
do one that kind of tweaks our friends a little bit.
Speaker 2 (39:29):
Are you ready?
Speaker 3 (39:29):
Okay?
Speaker 2 (39:30):
Only fair? Sorry, Steven.
Speaker 1 (39:31):
So since we've been talking about things that do or
don't have an ROI cooler cringe a brand sponsorship on say,
I don't know, like an Arsenal soccer jersey, you know,
big expensive logo on that.
Speaker 2 (39:45):
From your standpoint, you tell us.
Speaker 5 (39:47):
Cooler grin, Wow, that one.
Speaker 2 (39:52):
We're three for three on cringe.
Speaker 5 (39:54):
That's the first for usify it, And I have to say,
I think there's all sorts of neat way. Now during
the soccer game they see the you know, the spike
in revenue or the calls or whatever it's I think
that's pretty cool. That said, when it's just on some
soccer jersey and it's a little logo, and I guess
maybe that's making a difference, But for me personally, I
would really struggle to do that.
Speaker 3 (40:13):
As you know, my wife Nura likes to call my
favorite club, Arsenal. She likes to call them the Emirates
because the Emirates is the sponsor and that's on the
front of the jersey.
Speaker 2 (40:23):
You're going to debate this a little bit.
Speaker 3 (40:25):
Oh yeah, I cannot defend it. I understand why they
do it, but you know, it is a revenue driver
and you cannot argue with results they I would say
global football clubs, they are doing very well on the
brand sponsorship level. But with that being said, Josh, thank
you so much. We really appreciate your time, We really
(40:46):
appreciate your perspective, and hopefully many other folks in private
equity can kind of give this pot of liston and
to hear your very enlightened view of understanding how marketing
is a part of the growth plan. I think there's
one takeaway. Let'sigure out what that hurdle rate is because again,
marketing drive growth. Thanks, thank you man.
Speaker 1 (41:07):
Okay, that was great, and now let's go to what's
on your minds. Our question this week comes from Jamie
and the question is how do you guys see hybrid
work evolving? What are the key factors that will shape
the next generation of workplace culture.
Speaker 3 (41:24):
It's a tough one for.
Speaker 1 (41:26):
For a minute as we think about it. I love
that Josh talked about culture. That was so refreshing. Can
we get more folks of his ILK code saying things
like culture and that it matters.
Speaker 3 (41:41):
He's a real, I think, enlightened CEO and again to
have that perspective from a private equity operator, now it's refreshing.
But I do feel that the short term nature of
so many folks, and it's tied to the future of work.
I mean, again tying it to Rosad's book Rethinking Work. Look,
I don't know. I think it's really hard because you're
seeing it more and more. It depends on the industry.
(42:01):
I mean financial services, they are all back five days
a week. They just are right, and if you don't
like it, you don't have a job. So you know,
I think the future of work looks like what work
you used to look like, and they are demanding that.
I think in tech companies it's a little bit of
a toss up. If we're being honest, it's kind of
a tale of two cities, because if you're an engineer,
(42:23):
you pretty much can call your shots, right like if
you want to work from home. I don't think companies
want to lose engineers, and so you kind of get
to pick and choose if you're going to go into
the office or not, maybe go in a few days
of the week. But for all of the non kind
of technical, non engineering folks, they're requiring them to go
back to work. I mean, you saw Amazon asking everyone
to go back to work.
Speaker 2 (42:42):
Yeah, but you also saw how that has backlash.
Speaker 1 (42:46):
And there's some really good and I'm not talking about
just even ordinary person critiquing, but really you know, smart
journalists and academics saying, yeah, hang on one second, you're
coming at it from this sort of maybe the wrong
word as Ivory Tower perch. We are not tuned in
to what your employees are saying or what the research
(43:07):
is saying about how work actually transpires, it's coming more
from your own insecurities or fears, and so I.
Speaker 3 (43:14):
Don't know, I think certain people don't care. Yeah, I mean,
if we're being honest, some of these companies, they're using
this mandate to actually have people voluntarily leave, like they
want to lay off people, but they don't want to
say they're doing a layoff, and so they're going to
do this mandatory five day a week.
Speaker 2 (43:32):
That's a little cynical, maybe, but it's real.
Speaker 3 (43:36):
Talk like that is happening. If people don't think that
is happening, they're being naive. And so I think you're
going to see increasingly and again as we go more
and more, as we start to see this exponential curve
of AI really starting to impact the way that people
could do more with a lot lot less, you're going
to see it more and more and more. And so
(43:56):
anyone listening, I actually really encourage you to actually be
in the office, right if it's inconvenient, you know, that's tough,
but I really advise everyone to be in the office,
to be in the work environment so you're visible, so
that you could actually be a part of the team,
so that leadership can see you. And again, you know,
there's some cultures that they still haven't come back to.
(44:16):
You know, a lot of days in the office. I
know a lot of nonprofits, you know, even ones that
I'm involved with, they're only going back to the office
one day a week. But it actually they have not
been able to get the productivity back the way it
used to be. So I think it's a little bit
of a toss up.
Speaker 1 (44:29):
Well, look at the beginning of the episode, we were
talking about because of AI, because of all sorts of things,
that the times you come together matter more, and you
were talking about that in the context of certain events.
Speaker 2 (44:42):
But you know what, here's the thing.
Speaker 1 (44:44):
I'd apply that to the question about what is the
future of hybrid work and to me the enlightened view.
And I'm biased because I'm in a role where I'm
commuting it, so of course I'm going to have a
viewpoint of you want to get great talent, open your
aperture a lot bit when it's possible, when it's feasible,
and of course it does vary by company, by industry.
Speaker 2 (45:06):
By role.
Speaker 1 (45:07):
But here's what I'll say is I love in person
contact as well, and so hybrid to me is the
really interesting operative world there's so many ways in which
technology has made our lives better and so many ways
in which it's made it hell in the sense that
we don't have the natural you know, work ends at
(45:29):
five and you go home. I mean, those days are
obviously long, long, long gone. But so we have to
enjoy the positives that technology lets us do certain things
like record a podcast when we're three thousand miles apart,
and then make the time together count. That to me
is the operative lesson to the culture part of the question.
(45:50):
Make it feel like there isn't a culture divide when
you're virtual, and then when you're together, really use that
time wisely, because that's real.
Speaker 3 (46:00):
I agree with that. If you're going to come into
the office and just be on zooms in an office
with the door closed, then just stay at home, right,
But if you're going to be in the office, obviously
make account.
Speaker 2 (46:09):
Make account.
Speaker 3 (46:10):
But again it depends on the culture, because if everyone
else is going to be in there, you don't want
to be the odd man or.
Speaker 1 (46:15):
Woman without Well, fair enough, that is it for now.
Thanks for listening. We hope you like what you're hearing,
and if you haven't fully subscribed to the brand new podcast,
If you'd like us to answer one of your questions,
just tell us what's on your mind by emailing us
at ideas at brandashnew dot com. Don't forget to follow
us on all of our socials, and we will see
(46:37):
you next time on brand New
Popular Podcasts
Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.
40s and Free Agents: NFL Draft Season
Daniel Jeremiah of Move the Sticks and Gregg Rosenthal of NFL Daily join forces to break down every team's needs this offseason.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.