I recently read a great post from McKinsey about "technology debt" and immediately I thought about the current similarities to the marketing and advertising industries recent lack of training, what I call the "training debt". The net net of this effect is that companies lose valuable time, increase costs and therefore profits diminish. And they are losing time keeping their teams focused on the important value-added areas such as future ideas, innovation and growth, because they are fixing legacy issues that were not addressed in the past because they were not done "right the first time".
Tech Debt
To understand this, one needs to first understand tech. debt. According to McKinsey it is as follows and this is abbreviated to get to the point fast:
"A good way to get a grasp of tech debt is to think of it as having the same two components as financial debt:
The principal is all the work that must be done to modernize the entire technology stack.
The interest is the complexity tax that every project pays today. It derives from the need to work through fragile point-to-point,..harmonize nonstandard data, and create workarounds to confront risk,... "
These issues are caused by either lack of skilled practitioners or people taking short cuts to meet aggressive times lines.
Training Debt
My hypothesis is this is the same for marketing departments and agencies that, on judgement, seem to have left training on the "curb-side" years ago. As profitability in the ad business was being challenged by either adjacencies encroaching, or new business models like e-commerce, it seems most of the agencies stopped training their people.
For marketing departments or agencies that are not constantly up-skilling their teams, in a world of constantly evolving Martech, this analogy means marketing departments and agencies are not doing the right things out of the gate. And therefore, this produces additional work down the road - the interest cost. And these additional elements strain client-agency relationships, may produce costs the agency will have to absorb, or may caused missed deadlines to deliver materials to a multi-million dollar media plan.
Perils of Short-Cuts And Lack of Training
For a marketing department, that could mean they did not do the right, thorough strategy process, to get to a new transformative Brand Purpose. Did they do a business case analysis of some of the areas they were looking at for the repositioning or new product? Did they determine the ROI through a sensitivity analysis? Were they clear on their desired "future state"?
Equally for ad agencies, the account planners, the chief strategy officers, were they given ample time to explore the business problem thoroughly? Did they have the business acumen, not just the consumer insight acumen, to see this problem through the higher level "business" perspective that so many businesses require these days. Or are they just going to latch on to a borrowed-interest cultural meme?
Hypothesis - Lost Sales, Leading to Lost Profitability, Leading to Lost Shareholder Value,
My hypothesis with this post is as follows:
There is a significant shareholder value tax that CEOs and CMOs are paying by not up-skilling their staff - be they marketing departments or agencies, and likely other departments. Human hours, not knowing what the right "goal posts" are costs money, whether you are in marketing, human resources, the CSR department, or an agency.
Happy to hear if you believe in this lack of training "interest".
The original post from McKinsey can be found here: https://mck.co/3iXkTbr