Philip Kotler: Part 1 of an interview by Bob Morris

KotlerPhilip Kotler is the S.C. Johnson & Son Professor of International Marketing at the Kellogg School of Management, Northwestern University, Evanston, Illinois. He received his Master’s Degree at the University of Chicago and his PhD Degree at MIT, both in economics. He did post-doctoral work in mathematics at Harvard University and in behavioral science at the University of Chicago.

Kotler is the author of 57 books including: Marketing Management: Analysis, Planning, Implementation and Control, the most widely used marketing book in graduate business schools worldwide; Principles of Marketing; Marketing Models; Strategic Marketing for Nonprofit Organizations; The New Competition; High Visibility; Social Marketing; Marketing Places; Marketing for Congregations; Marketing for Hospitality and Tourism; The Marketing of Nations; Kotler on Marketing, Building Global Biobrands, Attracting Investors, Ten Deadly Marketing Sins, Marketing Moves, Market Your Way to Growth, and Winning Global Markets. He has published over one hundred and fifty articles in leading journals, several of which have received best-article awards.

His latest book, Confronting Capitalism: Real Solutions for a Troubled Economic System, was published by AMACOM (April 2015).

He has traveled extensively throughout Europe, Asia and South America, advising and lecturing to many companies about how to apply sound economic and marketing science principles to increase their competitiveness. He has also advised governments on how to develop and position the skill sets and resources of their companies for global competition.

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Morris: Before discussing Confronting Capitalism, a few general questions. First, who has had the greatest influence on your personal growth? How so?

Kotler: My parents, and their interest in making the world a better place for more people inspired me.

Morris: The greatest impact on your professional development? How so?

Kotler: Peter Drucker. I learned so much from his insights into business, organization, and strategy. Peter phoned me several years ago and invited me to spend a day with him at Claremont College. We spent a lot of time viewing his collection of Japanese art and discussing the problems of nonprofit organizations. Peter invited me to join the board of the Drucker Foundation and I saw him at several annual meetings.

Morris: Years ago, was there a turning point (if not an epiphany) that set you on the career course you continue to follow? Please explain.

Kotler: After receiving my Ph.D. in economics at M.I.T., I planned to teach economics. Professor Don Jacobs of Northwestern University, who I met at the one-year Ford Foundation program at Harvard in 1960, invited me to consider joining the business school at Northwestern (subsequently called the Kellogg School of Management.) He recommended that instead of my teaching microeconomics or managerial economics, the field of marketing was ripe for new conceptualization and development. I agreed with him and decided to teach marketing.

I found marketing to be highly descriptive and prescriptive, without much of a foundation in deep research. I brought in economics, organization theory, mathematics, and social psychology in my first edition of Marketing Management in 1967. Today Marketing Management is in its 15th edition and remains the world’s leading textbook on marketing in MBA programs. Subsequently, I wrote two more textbooks, Principles of Marketing and Marketing: an Introduction.

Morris: To what extent has your formal education been invaluable to what you have accomplished in life thus far?

Kotler: My education was largely humanistic covering history, philosophy, literature, and the arts. I spent a lot of time discussing the Great Books. I finally chose economics as my major. For my Masters degree, I studied under Nobel Prize winner Milton Friedman at the University of Chicago and I became a free market economist. For my Ph.D., I received a fellowship to study at M.I.T. under two other Nobel Prize winners, Paul Samuelson and Robert Solow. I became a convinced Keynesian as a result, believing that a recession is best handled with stimulus spending rather than leaving the economy to eventually recover with the hardships of austerity.

Morris: What do you know now about the business world that you wish you knew when you went to work full-time for the first time? Why?

Kotler: My primary early interest was in marketing and my aim was to improve its theories, methods and tools. Early on I pressed companies to adopt a consumer orientation and to be in the value creation business. I didn’t pay much attention to the social responsibilities of business until later. Now I am pressing companies to address the triple bottom line: people, the planet, and profits. I found that companies were too much into short term profit maximization and they needed to invest more in sustainability thinking.

Morris: Of all the firms that you have seen, which – in your opinion – best dramatizes important business principles? Please explain.

Kotler: I admire firms that have achieved a real differentiation from their competitors. Nike is all about mastering sports. Apple is all about creating technologies to make life easier and better. Audi is is all about introducing new technologies to make automobiles safer and better performing. I admire companies that have a purpose, passion, and performance. I am a fan of Unilever under its CEO Paul Polman, not only for the company’s insights into women and men when they buy beauty products or skin products (the DOVE woman, the AXE man), but also as a company seeking to achieve both growth and practicing social responsibility.

Morris: From which business book or books have you learned the most valuable lessons about business? Please explain.

Kotler: Once again, Drucker’s books. I also learned a lot from books by Jim Collins and Michael Porter.

Morris: Here are several of my favorite quotations to which I ask you to respond. First, from Lao-tse’s Tao Te Ching:

“Learn from the people
Plan with the people
Begin with what they have
Build on what they know
Of the best leaders
When the task is accomplished
The people will remark
We have done it ourselves.”

Kotler: I believe in the triple bottom line: people, planet, and profits. I would make sure to hire the best people and pay them more than my competitors. I would encourage their participation in decision making and hope that they can feel free to disagree with me.

Morris: From Michael Porter: “The essence of strategy is choosing what not to do.”

Kotler: Strategy is indeed about choosing what not to do as well as what to do. A business unit needs to decide what need it aims to satisfy in what group of people and with what value proposition that distinguishes the business from its competitors.

Morris: From Richard Dawkins: “Yesterday’s dangerous idea is today’s orthodoxy and tomorrow’s cliché.”

Kotler: Many great ideas need refreshment and deeper analysis. “Freedom,” for example, is a great idea but it has become a cliché. Republicans talk loudly about freedom and yet are against a women deciding what’s best for her own body and are against the freedom of two people of the same sex to marry.

Morris: From Isaac Asimov: “The most exciting phrase to hear in science, the one that heralds the most discoveries, is not “Eureka!” (I found it!) but ‘That’s odd….’”

Kotler: Whenever someone wonders how I could have written 57 books, I remind them that Isaac Asimov wrote 500 books. I like Asimov’s view that great insight comes from seeing something as odd and finding out why. Curiosity is the starting point for great science.

Morris: From Thomas Edison: “Vision without execution is hallucination.”

Kotler: Edison had great visions (for lights, music players, movies, etc.) but he knew they didn’t count until he could make them work. His statement that creativity is 99% perspiration makes that point. Consider how much time he spent trying to make a synthetic rubber material for tires and never stopped trying but he never succeeded.

Morris: Finally, from Peter Drucker: “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.”

Kotler: When it comes to efficiency and effectiveness, I would always start with effectiveness. I am interested in achieving a certain outcome. Only secondarily do I worry about achieving it as efficiently as possible.

Morris: In one of Tom Davenport’s recent books, Judgment Calls, he and co-author Brooke Manville offer “an antidote for the Great Man theory of decision making and organizational performance”: organizational judgment. That is, “the collective capacity to make good calls and wise moves when the need for them exceeds the scope of any single leader’s direct control.” What do you think?

Kotler: A great leader is one who surrounds himself with great people who then, collectively, innovate and implement with success. If he tries to do it all by himself, he is an egotist and likely to fail.

Morris: Here’s a brief excerpt from Paul Schoemaker’s latest book, Brilliant Mistakes: “The key question companies need to address is not ‘Should we make mistakes?’ but rather Which mistakes should we make in order to test our deeply held assumptions?'” Your response?

Kotler: This observation makes me think of the Republican Party which has consistently opposed Obamacare (as costing more), stimulus spending (as increasing inflation), etc., none of which has happened in spite of seven years of their warnings. Their main problem is that they don’t have the character to admit that they are wrong. They don’t have enough character to rethink their deeply held assumptions.

Morris: In your opinion, why do so many C-level executives seem to have such a difficult time delegating work to others?

Kotler: When managers overdo micromanaging of others, they probably hired the wrong people or failed to give them a clear idea of what each one is to accomplish. I prefer to train employees to be self-managers, just as in an orchestra each performer knows his or her role without being micromanaged.

Morris: The greatest leaders throughout history (with rare exception) were great storytellers. What do you make of that?

Kotler: Leaders such as Alexander the Great, Napoleon, Franklin D. Roosevelt and others promulgated a vision and a moving story of how their people could achieve a great purpose.

Morris: Most change initiatives either fail or fall far short of original (perhaps unrealistic) expectations. More often than not, resistance is cultural in nature, the result of what James O’Toole so aptly characterizes as “the ideology of comfort and the tyranny of custom.”

Here’s my question: How best to avoid or overcome such resistance?

Kotler: People are more comfortable with the familiar. It takes selling a big dream that comes with excellent income possibility to get someone to leave his or her comfort zone.

Morris: In recent years, there has been criticism, sometimes severe criticism, of M.B.A. programs, even those offered by the most prestigious business schools. In your opinion, in which area is there the greatest need for immediate improvement? Any suggestions?

Kotler: Most senior faculty in MBA programs received their training before the Digital Revolution and the intense Globalization. Their teaching pretty much describes what would work at the end of the last century. I would recommend a retraining of senior professors. We do this in other industries all the time. The other antidote is to hire the best young Ph.D.s who grew up with the Internet, Facebook, Linkedin, Twitter, and the rest.

Morris: Looking ahead (let’s say) 3-5 years, what do you think will be the greatest challenge that CEOs will face? Any advice?

Kotler: CEOs need to produce continuous growth in sales and profits. Yet they must also invest in sustainability and social responsibility, which then leave them less money for financing their growth. The key solution is to invest in innovation and entrepreneurship within the company. Reducing waste — although probably not eliminating it — and do so at all levels of government would probably generate the capital needed. Alas, that will probably not happen because it makes too much sense.

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Phil cordially invites you to check out the resources at his website.


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