Marketing without backing down
October 1, 2014
Less than 0.4% of board seats are occupied by Chief Marketing Officers (CMOs)? Professor of Strategic Marketing Rudy Moenaert is not happy about this situation.
"That was It. Any questions?" Jan, Director of Operations, just gave an update on the progress of his team in making the international supply chain function more efficiently.
There were no questions. After the announcement of the new acquisition in France by the CEO, and the subsequent figure labyrinth by the CFO Chief Financial Officer), everyone was convinced that logistics was indeed a difficult field the niceties of which they could not understand.
"Good: I will now turn the floor over to Pieter". the CEO decided.
Pieter began: "As you all know, social media is becoming increasingly more important, even in our technical markets. Therefore, I have made a proposal to have 20% of the communication budget allocated to Internet activities starting next year. We can make these funds available if we eliminate the trade fairs in Milan and New York."
So ended Pieter's words that morning. Questions, suggestions, doubts followed each other in rapid succession. He felt like a pedaler on a paddle boat in the desert. It was again clear to Pieter that everyone in the business community respected each other's patch, except the marketing patch. Everyone has an opinion about marketing. Pieter's plan, which he worked on for a month, was simply tossed aside. He received an explicit request from the CEO to strengthen the company's presence in Milan and New York. The HIPPO (Highest Paid Personal Opinion) had listened, evaluated and spoken.
It was in the spring of 1984 when I , a young MBA student, first heard the question asked, said UFSIA Professor Philippe Naert: "Why is marketing so poorly represented in board rooms?" The ensuring 3 decades have failed to change things very much. Of the 9800 board memberships listed in the American Fortune 1000, only 38 are occupied by CMOs (Chief Marketing Officers)1.
I have a heart for marketing. Marketeers can/must be the architects of customer processes, and the decisions involved in them.
Why are less than 0.4% of board memberships allocated to such an important central function? CMOs retain their jobs longer now - 45 months in 2013 compared with 24 months in 2004 (US data) - but I am not happy about it2.
We have only ourselves to blame. Marketeers are all too often seen as the light-weights of the organization. They are employees that are especially fun to play with, they are often extremely creative, but they are not perceived to have the respectability of their co-workers in other departments. Former marketeer of the year Hans Hagenaars (ING) puts it very succinctly: "I do not want any nice marketeers, I want strong marketeers."
A year ago we took part in a marketing boot camp for a large communications agency. In the hall were 20 employees, mostly account managers, but also the Director of Strategy and the COO. The enthusiasm of this group of young motivated employees was infectious. We casually inquired if anyone had heard of the term "EBIT".3. Only one person raised his hand (the Director of Strategy).
How can marketing be a regular feature of boardrooms if it does not speak the language of that room? How can marketing have ideas to create new value on the market if it cannot sell itself internally?
A department is not a competition
Marketing has come over from the States. In some companies, such as Unilever and P&G, the marketing function is really the place to be. But most companies in the Low Countries place marketing, euphemistically speaking, at the bottom of the food chain. Anouk Lagae, Chief Marketing Officer of the delicious Duvel brand and a heavyweight marketing warrior with many top brands, rightly notes that the modifier 'bullshit' is too liberally used in association with "marketing".
As if operations, finance and, for god's sake, IT are free of nonsense!
We have imported marketing into our business community and forget that no department consists of a single skill. Behind the doors of the marketing department, we have narrowed down this skill to communications Finally, we have committed the biggest mistake of adopting the activities of communications department as a benchmark for marketing skills.
The restriction has become the definition.
By this, we do not mean to suggest that communications are worthless or that any idiot can be successful in the marketing department. We, however, note that the marketing concept is too often eroded down to nice men and women who value an Effie award over business results and who are satisfied with a staff position instead of line authority. Marketing, as a skill set, is too important to be identified with a wonderfully clever commercial during As the World Turns.
The marketing field is admittedly very broad, but the absence of marketing in the major decisions involved in pricing, distribution, product development and market analysis is too great an omission to be healthy for a company.
Are we exaggerating? Certainly not! In a study of predominantly B2B companies, Leeflang and Verhoef come to the following conclusion:
"Our results indicate that the actual influence of marketing is limited to advertising, customer relationship management (including satisfaction studies and improvement), segmentation, targeting and positioning. Areas such as pricing and distribution, which were, as textbooks indicate, originally dominated by marketing, are now run by other departments such as sales and finance. Our findings generally confirm the perception in popular and scientific publications that marketing is losing ground in companies."4
The Journal of Marketing can sometimes lack relevance (to put it mildly), but the articles in this top notch journal mostly ring true.
Marketing is no longer in the lead. In a sense, the analysis hat filmmaker Steven Soderbergh made of film's decline in the face of profit-taking by studio executives can be copied to the area lost by marketing to the benefit of other disciplines:
When a large portion of fear is merged with a lack of vision and a lack of leadership, you end up on a path that can be difficult to reverse."5
I think that marketing should again play a leading role. Leadership is too often interpreted as the personal characteristics that elevate managers to masters of the monkey house. Leadership is broader and includes three building blocks: strategic leadership, organizational leadership and personal leadership.
Marketing with balls? Thia is not intended to suggest that marketing is reserved for men. On the contrary! It is intended metaphorically. We are, above all, praising courage and entrepreneurship. Creativity and analysis are necessary But courage and entrepreneurship will help marketing to escape the enclosure of the communications department. And this will only help a business to get ahead.
- Zmuda N. "Why More CMOs are Wanted as Board Directors", May 24, 2014. http://adage.com
- "Chief Marketing Officer Tenure Remains Steady at 45 Months", March 2014. http://spencerstuart.com
- EBIT = Earnings Before Interest and Taxes
- Verhoef P.C. & Leeflang P.S.H. "Understanding the marketing department’s influence within the firm", Journal of Marketing. Vol. 73 (March 2009), p. 14 - 37
- Hernandez E. "The world according to Steven: insights from Soderbergh". April 29, 2013, http://www.filmlinc.com