GSK Consumer Healthcare: Putting the Global back in Global Marketing

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Over 1200 global marketing leaders from more than 120 global brands have participated in the EffectiveBrands Leading Global Brands™ project. All participants are the CEO, Chief Marketing Officer, Global, Regional or Local Brand Director of a global brand and share a desire to be thought leaders in developing ideas and best practices for leading the global brands of the future. The EffectiveBrands Global Brand PulseCheck™ database now includes contributions from over 12,000 marketers.

The focus of this month’s Leading Global Brands Bulletin is on how GlaxoSmithKline (GSK), a leading pharmaceutical and consumer healthcare company, evolved its Consumer Healthcare marketing organization from an autonomous and decentralized one to a highly globalized organization where the ‘Future Group’ focuses on global brand innovation and brand equity working side-by-side with country marketing organizations that own full responsibility for local deployment. By defining themselves around their global brands and not their geographies, GSK Consumer Healthcare was able to quickly deliver dramatic improvements in their pipeline and aggressively grow the business (from 3% to 14%) through innovation centered on consumers and driven by science.

Peter Kirkby is VP Marketing Strategy & Excellence (MS&E) for GSK Consumer Healthcare. Working within the Future Group his global responsibilities include consumer and market insight, strategy, brand and communications planning, digital marketing, agency management and the company’ marketing capability program. Prior to joining GSK, Peter worked for Procter & Gamble and for a consultancy.

EffectiveBrands (EB): GSK Consumer Healthcare has evolved its
approach to global brands over the last few years. Take us back to
the beginning. How did the previous marketing operating model work at GSK?

Peter Kirby (PK): Countries and regions were traditionally very
autonomous within GSK Consumer Healthcare. About 5 years ago little
was organized across regions with the exception of a central marketing
group called ‘Category Management’. Under that system, we had a
small team in the center trying to leverage marketing learning across the
business with some remit for innovation, but really without the necessary
resources, money or the authority to take a lead. At that point, our
innovation agenda was being driven more by the regions and countries,
with fragmentation as a consequence.

EB: So what was the impetus for changing the marketing organization?

PK: We weren’t growing fast enough. Our focus had been on profit delivery, but that was clearly not a sustainable model long-term. So about five years ago, we challenged three teams to determine how best to accelerate growth in the company. All three teams came to the same conclusion: to drive growth we needed to step-change our innovation. The teams recommended a more centralized, robust, and connected global marketing and R&D organization for our global brands - freeing-up our regional and local brands - by essentially putting decision making in the right places and at the right levels. The new global organization would need to concentrate and take the lead on driving the growth and innovation agenda on our global brands. In short, our brands needed to become ‘future brands’. That’s when the decision was taken to change the operating model.

EB: Can you talk a little about the new operating model?

PK: The new operating model was based on the key principle that we needed to move from being a geographically orientated company with some above-country strategic support to being one where our global brands are in the lead and being developed and managed globally.

We ended up with an operating model where the global responsibility for our biggest brands was placed with what we call the ‘Future Teams’. Fundamental to this model was the need for the top 5 markets for each global brand to play a key role within the Future Teams. The objective was to drive growth through innovation and focus scarce resources where they could make the biggest difference.

EB: Sounds like quite a shift from the past. How were these Future Teams set up and who was invited to work on them?

PK: A lot of care was taken in the formation of the Future Group Teams to ensure the teams represented a true mix of brand and market expertise. We didn’t want to build a central global team made up of biased country or brand points-of-view. To be successful, we also needed brand and R&D teams to be more than joined at the hip. We wanted deep, natural collaboration, and strongly incentivized them to work collaboratively. We co-located the cross functional teams into the same physical space and went to great lengths to ensure people understood the Future Group model was a joint commercial and R&D model. The former President of Europe, John Clarke, now the President of GSK Consumer Healthcare, was the first head of the Future Group, and his drive for results was critical in quickly establishing the group’s credibility.

EB: What was the promise to the organization, and did the Future Teams deliver?

PK: The promise was that the Future Group Teams would step-change the innovation pipeline to drive growth. This focus was deliberate. First, if you are going to grow, you need innovation to fuel that growth. Second, if you take the resources out of the local markets, you need to produce something very tangible, very quickly, to bring the strategy to life. Strategy is all well and good but in the end it’s words on paper. You need something you can touch and feel - you need action. Understandably, the more the country general managers were comfortable with innovations developed centrally, the more they would focus their resource towards great local market activation. In terms of delivery, I think everyone in the company agrees that the quality of our innovation has improved significantly over the last 3 years.

That’s not to say that each team had the same immediate success. What emerged was that the teams that had been given a remit beyond just innovation were more successful. They were doing classic brand management, with full ownership of strategy, equity and innovation. This difference in operating models between teams was deliberate for two reasons: first, some teams had a greater innovation need than others and required focus; second, it eased the transition from local to global with the Markets. However, it created complexity when, for example, you had debates on innovation vs. equity communication with the Markets.

EB: Are you saying that the responsibility for advertising for the other global brands was split between local and global marketing teams depending on whether it concerned an innovation or the base business?

PK: Yes. We had the odd situation where if a brand’s innovation was more than three years old, the ‘model’ suggested that advertising now fell to the Markets because it was now equity and not innovation. This made creative direction and where budgets was spent - innovation or equity - difficult to control or influence, and understandably generated much ‘turf’ debate.

We had situations where our ad agencies were being briefed differently in different places and there were instances where countries were developing work on their own and Global wouldn’t find out about it until two-three months down the line. The model needed refinement. Our innovation was in a much better place but, two years in, we felt ready to evolve to the next stage of globalization. The Future Group had a new President ,Tim Wright, and it was a natural moment to sit back, take stock and listen - and show the organization that we were listening. That’s when we chose to partner with EffectiveBrands to help us focus on improving our global marketing effectiveness.

EB: What did you learn about the opportunity of increasing global marketing effectiveness?

PK: The Global Brand PulseCheck™ helped us quickly identify what we were doing right and where we needed to focus to accelerate our growth. The findings made explicit how team members were feeling and raised quite a few new areas for us to think about. For example, the results showed that, relative to other companies, we had managed to adapt to the new operating model pretty quickly; “You’ve come a long way in a short amount of time,” as you guys said. We have a pretty adaptive culture that’s not very hierarchical which is a big help, and the willingness to change as a business imperative is there. We also saw that some of our brands scored best in class against the cross-industry benchmark for ‘brand inspiration’, perhaps not surprising for a consumer healthcare company, but good news nevertheless. With hard metrics on each global brand team and region on what was working and what was not, we had the ideal challenge to up our act. The recommendations from the EffectiveBrands team gave us very tangible areas to focus on, laid out the opportunities and showed us how we could get there.

What was encouraging was the realization that we weren’t the only company facing some of the challenges we were talking about. The Global Brand PulseCheck™ provided us with a benchmark against a group of many other global brands, across other categories. But most importantly, because the findings were objective and insightful, and the work included interviews with many of our key stakeholders, the results and recommendations were readily accepted across GSK Consumer Healthcare. They provided us with an outside-in perspective and they formed the starting point for Future Group 2.0.

In terms of actual areas to focus on to help accelerate our growth, the analysis of the PulseCheck™ results told us that our markets wanted more than just great innovation from the Future Group teams. They wanted stronger strategic thinking,
and they wanted us to take on a more holistic global brand approach. Many stakeholders felt we needed to better align our global and local objectives and that there were real opportunities to fuse global and local strategic planning more comprehensively. Markets wanted us to think beyond just launching an initiative, but also have a stake in how the initiative is activated…not ‘launch it and leave it’.

In addition to this, there were some important softer points to reconsider. The
enormous focus by the central team on innovation had made some local countries feel we were too ‘launch focused’ without consideration for the full brand health and P&L. And trust was not as strong as it could have been because we did not have full alignment of targets between the local and global team members. We also realized that some of the Future Group Teams were perceived as somewhat isolated and disconnected. In our quest to develop innovation we had sometimes kept our heads down and not listened enough to our key markets. In summary, the Global Brand PulseCheck™ and the EffectiveBrands recommendations were a real call to action. It was time for better conversations with the markets and management, to drive real change; and with our local marketing colleagues, to ensure we were collaborating to develop a more holistic marketing mix to drive growth.

So, the first, and most important, change we made to the model was to make global brand teams responsible for total equity, including overall communication.

EB: What other opportunities for improvement did you identify and decide to act on?

PK: Another key learning point from the PulseCheck™ was that as an organization we needed to be more explicit about recognizing and celebrating the complementary roles we play as local and global marketing teams in order to get the best on both fronts. Much of this is how we interact and behave on a day-to-day basis, but we also made sharing directions and plans a key focus of our annual Future Group meeting that brings together all the Markets and Future Group Teams, about 300 people. We started the meeting with a reality check - an honest conversation between the Future Group President and the three Regional Presidents discussing the issues and opportunities raised in the PulseCheck™ - what’s working and not working both centrally and locally within the model. The theme of the meeting was that we, as a collective, drive the growth of our brands. It’s not about me; it’s not about you; it can only happen together.

Each Future Group Team ran brand immersion sessions rather than just a review of the pipeline, which had been the focus in the past, putting the Markets in a much better place to drive local activation. We involved high performing markets in the presentation of these sessions to show real examples where our market results improved when the global/local mix was collaboratively developed and more consistent across all the marketing mix elements.

We worked to bring the concept to life with music - we had a great jazz band improvise around one core tune - the Future Group Teams being the core and the Markets improvising around this tune to drive the brands locally.

This conference marked a change in approach; we openly recognized some things were working better than others and we were addressing this. It was far more interactive and presented a more holistic view of what was required for growth. As a result, the feedback was exceptional, with much greater clarity and the Markets better able to start activating behind all they had seen.

This year, we have gone a step further. We are combining our global marketing awards ceremony with the meeting. Within this, we have expanded the categories to fully reflect what’s required for growth and properly celebrating the critical role of the Markets within the global model. For example, we now have shopper marketing alongside communication campaigns.

EB: And did the PulseCheck™ findings lead to further global marketing operating model changes?

PK: Yes. We’ve changed how we approach strategic planning to make it far more collaborative with the Markets, and moved this much earlier in the year so it has the best opportunity of shaping both global and local thinking.

We are also working to consolidate our disparate data sources to help decision-making, speed and learning. For example, we were able to run our first global brand equity study last year and now have one communications pre-testing supplier for our global brands. Better data, better conversations and better decisions.

We’ve also staffed-up on specialist teams. For example, we have a team dedicated to developing central strategy and communication packages for healthcare professionals like dentists and pharmacists to make it easier for the Markets to focus on activation. We also have specialist Project Management resource to ensure projects are on-time and issues are managed; we’ve also created an innovation network with the Markets to drive new ideas and build the capability across the company. This all helps build confidence and trust in the model.

In addition, we created my team - a group called Marketing Strategy and Excellence -
as a support function to the rest of the Future Group. This group consists of specialist resource for all the global brands to draw on: insight, strategy, brand development, digital marketing and best practice tools. Fundamentally the team is about helping accelerate brand growth and the trust and effectiveness of the Future Group model. For example, we have built a new global research team with resource for each brand. They live with the Future Teams but report through our team to maximize objectivity and avoid the global marketers being judge and jury of their own data which has led to understandable friction with the Markets in the past. We are also completely revamping the company’s marketing excellence program to help drive growth and create one common language.

EB: Was there anything else you did to promote better collaboration between the local and global teams?

PK: Yes, we tackled the level of alignment and trust between local and global teams because, at the most fundamental level, the model works only when you have trust. We began moving more people from the markets and putting them into the Future Group and exporting folks from the Future Group into the local markets. By putting on the other person’s shoes, trust and understanding between local and global was immediately strengthened and a real sense of interdependency developed.

We’ve also worked hard to improve collaboration within the Future Group by breaking down physical barriers. Firstly, we aligned functions to the brands and moved them into the same building. We then decided to truly ‘colocate’ and put all the different highly matrixed functions in the same physical space by literally knocking down walls and creating Global Brand ‘Innovation Hubs’. Each Future team as well as the leadership of the Future Group and R&D did away with their offices and now work together at one big ‘kitchen table’. The spaces are more fun and inspiring to work in but, more importantly, we’re having more live conversations not to mention ‘constructive eavesdropping’, and email traffic has fallen sharply within the teams.

EB: In closing, what would you say are the most important qualities for a global brand director to be successful?

PK: The key is inspirational leadership backed by a real willingness to get close to key markets. Great global brand leaders galvanize disparate teams to give common purpose, direction and clarity and have the right technical marketing talent to develop global brands. They are willing to address the reality as it is, not as they would like it to be. They inspire at all levels and are able to manage up, down and out. They listen well and with humility. They must have a strong appreciation for the local markets that live and breathe the commercial reality every day-there can be absolutely no remoteness. They must have a great understanding of the big picture and have an ability to communicate this in a compelling way to the wider audience.

EB: So now, another year on, did the changes lead to the results you were looking for?

PK: Absolutely. Our global brands are growing, and progress at both the global and local level has been significant. I think most folks inside the company would agree that not just our global strategies are better, but we are also beginning to see corresponding improvements in the local execution of our mixes. Not everything is just as we would like it to be, but overall, 14% company growth last year is a huge improvement from the historical 2-3% that we were seeing.

We just recently completed our second annual PulseCheck™ and the results are testimony to the changes and effort. Not only is there significantly higher confidence in the quality of our innovation pipeline, countries are also playing back that they trust the Future Group to deliver on promises (a 15 base point improvement) and that they have significantly more confidence in the Future Group to help them win their local market battles (almost a 20 base point improvement). We are also seeing much higher scores on the clarity of our global brand strategies, roles and responsibilities and willingness to work globally. For example, one brand that had worked very hard at improving connection with the markets based on the results of the first PulseCheck™ saw its score on ‘the Future Team understands my local market reality’ increase by almost 40 base points. It’s great when you see both the global and local efforts reflected so clearly in the results, and the platform this creates for our ultimate objective - growth!

Global Marketing Capability Program™

Over the last 5 years, EffectiveBrands has developed the Global Marketing Capability Program™. In this discussion GSK’s experience and work emphasizes the importance of some of these phases.

Connect
From the outset, creating an interdependent global organization was top of mind for GSK. They carefully crafted their Future Teams to represent a true mix of both brand and market expertise. However, this initial structure still created friction between local and global as the two teams were measured and targeted to achieve conflicting objectives. Once recognized, the team worked hard to address the situation, creating a revised organizational structure with clearly aligned measures and targets. The organization has progressed leaps and bounds in this area in a relatively short time and the latest PulseCheck™ shows a new strong sense of ‘we are in this together’ and a ‘one team’ mentality.

Inspire
GSK holds the gold standard position in our study for inspiring around their brands. As Peter mentions, this is partly a factor of the industry - these are by nature brands that have a profound impact on the quality of people’s lives. But having said this, GSK does not rest on their laurels. They recognize the huge advantage that can be gained from capturing the hearts and minds of the organization and they ensure they tap into this to fuel brand growth. The annual ‘GO’ meeting brings together all the Future Team and Core Market top management. Initially, this meeting was simply an innovation show and tell event. Its new, revised role aims to inspire not just within brand, but across the brands and beyond brands, into ways of working and best practice.

Organize
In our experience it is quite typical that as organizations begin the journey from being autonomous and decentralized to being highly global, they start by focusing on ‘white space’ - typically innovation and best practice. Those that stay here are not truly realizing the benefits of working globally. What GSK quickly recognized was the need to evolve and drive for further efficiencies and effectiveness. They listened carefully to the organization and revised responsibilities for the Future Teams based as much on the needs of local markets as on the need to drive global efficiencies. Consequently the revised, broadened roles and responsibilities of the Future Teams were received extremely positively from both sides of the organization.
About EffectiveBrands™

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