621: How to Make Decisions in the Age of the Algorithm w/ Peter Horst

ABOUT THIS EPISODE

In this episode we talk to Peter Horst, Former CMO of The Hershey Company and Founder of CMO Inc.

LinkedIn: https://www.linkedin.com/in/peterhorst/

Wouldn't it be nice to have several fault leaders in your industry know and Love Your brand? Start a podcast, invite your industries thought leaders to be guests on your show and start reaping the benefits of having a network full of industry influencers. Learn more at sweet fish Mediacom. You're listening to the BE TOB growth show, podcast dedicated to helping be to be executives achieve explosive growth. What you're looking for techniques and strategies or tools and resources? You've come to the right place. I'm Jonathan Green, I'm James Carberry. Let's get it into the show. Welcome back to the BB growth show. We are here today with Peter Orse, is the former CMO at TDAMERITRADE. He's also the former CMO of the Hershey Company and now he's the founder of CMO ink. Peter, how you doing today? Doing Great. Thanks so much for having me. I am excited to chat with you today, Peter. We met through our mutual friend Josh Stemley, and I am incredibly excited to chat with you. We're going to be talking about decision making in the age of the Algorithm, but before we dive into that, I'd love for you to just give our listeners a little bit more context about what you're doing with CMO ink. Sure. Well, I stepped out of the corporate world when I left her sheey, you know, a little over a year ago and I've been doing really kind of a fun mix of some consulting, bunch of writing and writing four Forbes. I've got a book coming out in the fall in this bring, doing some speaking. I'm on a few advisory boards. So, you know, after thirty years, you know walk in the halls of Corporate America, sort of the variety, the flexibility and the the flexing of old and new muscles has been really fun. So that's kind of what I've been up to. Yeah, I love it, Peter. I mean I to...

...have someone with your background and your experience. I can't imagine kind of the dynamic nature of what you what you bring to a stage or any consulting engagement. So, piter, I want to transition into talk, you know, the what the rest of this conversation is going to be about. Some I'm really excited about and I'll start by kind of referencing back to an article that you wrote. It was about three years ago for Harvard Business Review around the idea of not letting big data kill your brand. Can you talk to our listeners a little bit about what you know, what that article was about, and then that'll launch us into the conversation today. Sure. So this was given the amount of time it took to kind of finalize and publish the article. We probably started thinking about this about four years ago as we saw the growth of big data and, you know, massive analytics playing a bigger, bigger role in the marketing equation. A colleague and I went and spoke with a bunch of really smart leading CMOS across a variety of industries, from quick serve restaurant to hospitality to kids games, to get their perspectives on how do you manage this incredible new capability in a way that doesn't squeeze out all that is sort of about human creativity, judgment, insight, all of those things that that really at the end of the day or at the heart of great inspired marketing and innovation. Because the reality is, you know, certainly at the time the vast majority of the capabilities, the applications of the sort of big data analytics were around kind of that next action. The short term sales, the optimization that could be demonstrated in a relatively near term and was not nearly as well tuned towards those longer term slightly hard to kind of get your hands around issues around brand, around longer term equities. So we saw a...

...risk that that that part of the equation and that sort of that always had to be balanced, you know, short term versus long term, product versus brand, that that that was sort of get lost. So, you know, we went deep on that and we heard a range of perspectives on on how different CMOS dealt with it, everything from I trust where the data takes me to I would never abdicate a decision to the machine and I will always insist on intuitively understanding whatever recommendation it is. So publish the article. Got Some good response and that was that. You know, fast forward a few years and I think that issue has only increased as capabilities and technology have continued to develop. So that being obviously, you know, three years ago now, how much more so do you think that that that piece is relevant today, based on by the advances that have been made in technology since then? Yeah, I think I think only more so, and in more different ways. You know, you look at these sort of eye chart, brain numbing lumascapes of the thousands and thousands of vendors and technologies and Marktek, add tech analytics providers, ai now increasingly playing a role and sure to play a much, much bigger role of marketing going forward. And there are, you know, infinitely more tools and capabilities that are certainly powerful and important and you know you can unlock all kinds of opportunities. But at the same time, they they create even more temptation, even more gravitational pool, I think, towards these sort of abdication of the thought process and decisionmaking and even more ways in which you can de emphasize and place less value on that which is driven by judgment, driven by a holistic, human, creative, intuition and experience driven...

...perspective. So I think the the the need for CMOS and marketers and CEOS to be very intentional and very conscious in terms of Howard decisions being made, how are they waiting, the different factors that go into major decisions is even more important. That makes complete sense, Peter, based on your background being at Hershey Capital One tdumer trade, there any examples or stories that you could share. That would illustrate the power of really being conscious about how much weight you're giving, you know, the algorithm or the where the big data in the kind of the the human centered decisions that need to be made. Yeah, sure, well, I'll give you a couple of different instances. Capital one is certainly viewed, and I think you know, justifiably so, as one of the most sophisticated, in analytically sharp marketers out there. And I say that with with zero pride because, you know, the people who are the true deep analytic geniuses did not reside in my team, but but as I sort of worked with them and and sought to understand, you know, what is the magic in how all that work so well, on how they're able to amaze even the people at Google on the kind of results they get out of, you know, their investment in that platform. You know, I consistently heard back that there was this notion of always be skeptical of the data, always be willing to stare at it and decide whether you think it's making sense, whether you think there's some sort of you know, fly in the ointment somewhere, but but never just follow the data out the window, even as you're being incredibly sophisticated and leading edge in terms of how you're leveraging it. There's also sort of a openness in humility that needs to go along...

...with all that prowess because as much as you know, the company had been absolutely at the leading edge of, you know, go back in number of years direct mail and the the analytics and optimization around that. As each year would go by, you know, we discovered new things about what's really going on in the interaction of channels and as much as we thought we had unlocked, you know, the secrets of the universe, at one point in time we'd realize, wow, we had that wrong and needed to really refresh that that that assumption. Another instance, in a very, very different environment of Hershey, as we were going through the process of modern rising the marketing model and bringing a more data and analytics and technology enabled marketing model, we had one particular brand we're working with. It was an absolutely superb, just addictively delicious product but really not that well known and occupied sort of an interesting, you know, niche in the realm of chocolate infection and we got, and I'll admit I got very intrigued with a technology solution that would allow us to get very, very targeted in terms of people who, you know, kind of like dark chocolate, but we're a little suspicious of it and had tried this competitor but not done that. And you know, red haired, left handed living in Ohio. So we could absolutely just put our the exact right message in front of the exact right people. And we did a little pilot and then came back to really step back and examine our thinking about it and said, you know, our problem is not a super clever targeting problem, it's a you know, we have a great product, known knows about problem and that caused her a very different solution. So, you know, you often have to beware of the sort of seductive sophistication of some of these technologies and an analytics because you're, you know, wrong tool for the wrong problem. They're two very different situations, but but both that really calls for,...

...you know, the willingness to step back and think like a curious marketer and and not simply sort of turn over the keys to the car, to the to the machines. It makes perfect sense. Peter, you had mentioned of wine, that there are a couple of books that that talk about this idea. Could you share those with us? Yeah, you know, to to I think, really speak to this issue of how do you just bring the right kind of thinking in this sort of world of the algorithm. One is called the opposable mind by Roger Martin and the others called sense making by Christian Madsburg, and sense making is sort of the the counterpart to the sort of analytics world. And but that I mean not it's anti you know, analytics and data, but more it's, you know, you need to have the right complement, certainly leverage of the data, but it's in that Book Mad Spirit makes sort of a call for a liberal, arts, humanistic, almost anthropological way of approaching understanding a market. So, you know, rather than consuming clinical data on a spreadsheet, get out, get immersive. You know, it's one thing to look at data about how Parisians, you know, eat breakfast, but it's another thing to sit in the cafe and Paris and Soak up the environment and understand the context and what are they talking about and you know just what's the whole cultural, social environmental surround that gives you the sort of three hundred and sixty insights that can really unlock something interesting versus this very sterile sort of data. Yeah, it also talks about, you know, messy problem solving and and you know, the willingness to, in the midst of all the data, you know, leverage sort of a feel for...

...the environment and a deep understanding and sort of gut in a sort of along similar lines, but from a different perspective and your posable mind. The central idea there is the importance of, you know, holding two seemingly contradictory ideas in your mind at once, and that you know especially, I think, in this world of data and tech and so forth, you can much too quickly go to very simple either or it's this or it's that, a versus be and it might be both a and B, or it might be, you know, abcn D, and you don't want to rush too quickly to narrowing in on one or another. So, you know, Martin talks about, you know, a few ways in which you can sort of get out of that trap of overly simplistic, overly sort of following the numbers to a quick conclusion. And one is, you know, start with a lot of considerations on the table, don't too quickly rule out possibilities, especially if they seem contradictory and you need to start brooming them off the table, but make sure you take an expansive view of the possibilities. Another so critical for marketers is this issue of causality. Okay, and you know, in a world where we all struggle so much with marketing accountability and Rli and what's working, and is this, you know, content marketing program delivering versus this conference sponsorship or since that direct mail? You know, such a complex issue. With the advent of all this technology, it gets very tempting to say, AH, a, causeb. You know, the last click was over here. Therefore, you know, let's put more money into this whatever display ad yeah, but causality is rarely that simple. So you know, approach causality with, you know, an assumption that they are probably many different complex inter relationships going on and don't work too quickly to oversimplify it. Another really important one is really looking at the whole problem all at once. Okay, and you...

...know, especially in the world of technology, would we've moved from these giant waterfall technology projects that take on this massive three year thing all at once? We say no, no, it's about agile, you know, breaking it down into pods and peace parts. That works for many things, but for solving complex problems you really want to look at it as a whole big messy problem and not try to sort of reduce it to its tidy little parts, because you need to sort of think of corralling the whole herd in its entirety on the way to Omaha and not, you know, breaking it down into lots of individual cows, because that's not solving the whole problem. And then, you know, finally, it's sort of, as you're working towards a solution, you know, continue to keep multiple possibilities in your head at once, because sometimes it's both. Sometimes the magic is in that inherent contradiction. You know, it's not I'm with you or against you, it's I'm with you generally, but I differ with you here, and therefore the creative solution is something as yet undefined. So I think you know, between those two sort of books and ways of thinking, it's about, you know, bringing in a richer, more human cultural set of insights and perspectives, along with all the hardcore data and analytics, and it's about taking a more holistic and multifaceted and less tidy thought process in terms of how you sort it all out and get to a good solution, and I think both of those are really important things to keep in mind in a world where we have so many great capabilities but that really, at this moment have a tendency to oversimplify, over emphasize the short term and, you know, Miss that sort of magical catalyst of, you know, human curiosity and created creativity. Now, Peter, this is this has been fantastic. I really appreciate you sharing this with with our listeners. If there's somebody that listening and they want to stay connected with...

...you, Peter, or they want to they want to learn more about the work you're doing with CMO ink, what is the best way for them to go about doing that? Well, you can come by CMO inkcom. I can sign up for my newsletter and I'm easy to find on Linkedin at Peter Horst and twitter, Peter Horst. So stop. I share your thoughts and I'd love to hear any reactions or builds or different points of view you have to this or anything else I've spoken a written on, and that's a great way to find me. Wonderful. Thank you so much again, Peter, for your time today. This has been fantastic, so I really appreciate it. You Bet. Thanks, James. To ensure that you never miss an episode of the B Tob Growth Show, subscribe to the show on Itunes or your favorite podcast player. This guarantees that every episode will get delivered directly to your device. If you or someone you know would be an incredible guest for the B tob growth show, email me at Jonathan at sweet fish mediacom let us know. We love connecting with be to be executives. We love sharing their wisdom and perspective with our audience. Thank you so much for listening. Until next time,.

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