The V Curve of Risk Taking in Brand Management

When I was just starting off at P&G as an Assistant Brand Manager, I had a chance to have lunch with John Pepper. Pepper is the former CEO/Chairman of the Board at P&G and is currently Chairman of the Board at Walt Disney Company. Needless to say, the guy knows management and marketing. One of the things I have never forgotten from that lunch was what Pepper said about risk in our careers. He said that marketers inherently act on a V curve of risk taking with time/seniority on the X Axis and comfort with risk on the Y Axis. When you are junior, you can take risks because you have nothing to lose, there is nothing but upside if the risk pays off. Likewise when you are very senior, you can make strong statements about risk taking because your career is set and all you face is a golden parachute if the bet fails. Where we run into problems is middle management, those people around the Director level that are at a critical point in their career. They’ve put in enough time that their career is a good place and they are on the right track. They probably are now married with young kids, a mortgage and all the other responsibilities in life. In other words, in their eyes there is a little upside with risk, but a lot of downside. They are comfortable with how things are and they aren’t going to place many bets or experiment.

I really believe this explains the issue facing marketing today. On one side you hear senior marketers like Jim Stengel say “It’s Not About Selling and Telling” but then P&G is still spending billions on traditional TV and Print mass media that is all about telling. You hear senior execs at Nike say they are not “in the business of keeping the media companies alive” but that hasn’t stopped them from flooding the airwaves of CBS during March Madness. The problem is that the most senior marketers at a company are not accountable for those day to day decisions. These decisions fall with the Marketing Directors and Brand Managers who sit at the bottom of the V Curve of Risk….the ones with the most to lose if they place the wrong bets. This is exactly the problem right now.  Marketing needs to change and needs to change fast. Today’s connected youth wont engage with brands in the traditional way. We need marketers today that are willing to experiment, willing to take smart risk, willing to act like a gambler and go all in.  We need “revolutionaries who are participating in the conversations.”  We need companies that encourage this risk in order to reward innovation.  What we really need are more people AND companies willing to break the V Curve and follow the advice of Steve Jobs:

“Let’s make a dent in the universe.” Steve Jobs, Apple CEO/Founder