The past decade has not been kind to marketing. Leading packaged goods companies—long viewed as the best marketers—have been unable to count on their marketing departments for innovation and growth. As a result, their CEOs have had to look instead to operations and finance to increase profitability by cutting costs, eliminating marginal products, and "reengineering" the supply chain. In their view, the blame for marketing’s failure lies squarely at the feet of the brand management system—a system that may have helped companies like P&G achieve spectacular earnings growth during the 1950s, 1960s, and 1970s, but that has long since shown itself unable to cope with today’s complex marketing landscape.

Meanwhile, deregulation and increased competition in many other industries like financial services, airlines, and telecommunications convinced CEOs that their companies needed to get better at marketing. So they hired away hundreds of the best and brightest from firms regarded as world-class marketers. At the time, this seemed a reasonable idea, but it was doubly flawed. First, it was impossible simply to graft marketing expertise onto an organization that was not marketing oriented. Second, the very skills these companies sought to emulate...