Marketing : Mixing or Missing in The Boardroom ?
The Advertisers Association of Nigeria (ADVAN) held a Chief Marketing and Communications Officers’ Forum last Thursday, 7th June 2018 with topic, ‘The CMCO as the CEO’. The engaging discussions centred around how marketing practitioners can gain stronger respect and influence in their organisations and on the Board. It reminded me of a talk I gave 11 years ago at the Charterted Institute of Marketing, Kenya Power lunch event. I thought to share excerpts below as the thoughts therein, I dare say, still bear relevance.
The Boardroom or the Boredroom?
First, I would like to thank the Chartered Institute of Marketing, Kenya for the invitation to speak at this lunch event. When I got the call to speak at this event, I asked Fred Owiyo of the CIM two questions. The first was ‘Why me?’ and the second was ‘What would you like me to speak about? It was humbling to hear the response to the first question which was that there is a perception that marketing has made a difference to Cadbury Kenya. For this, we say ‘asante sana’, ‘thank you’, bearing in mind, on a light note, that in marketing, perception could be stronger than reality!
I found the response to the second question quite intriguing, because the CIM had suggested that I speak on the topic, ‘What went wrong in the Boardroom?’. This was premised on the hypothesis that when organisations perform lower than expected, or worse, fail, it is a consequence of something having gone wrong in the Boardroom, possibly a failure of the marketing manager or director.
I have taken the liberty to modify the topic to ask and attempt to answer the question whether Marketing is alive and kicking in the Boardroom, or missing in action to borrow a combat parlance. This is because things also do go right in the Boardroom, and the advent of more marketing people rising to the position of CEO of major companies in Kenya would seem to reinforce this statement. I admit though, that we tend to hear more of what happens in the Boardroom when things go wrong.
I would like to clarify the context in which I shall use the term ‘the Boardroom’. In the literal and general sense, ‘the Boardroom’ is that, at times, intimidating room, which mere mortals dread in an organisation; where the ‘powers-that-be’, usually called ‘the directors’, discuss and make decisions that affect for good or bad, the lives of people, brands and the organisation. More seriously, the ‘Boardroom’ is that room where strategic decisions concerning the direction, goals, operations, management and performance of an organisation are made.
I would expand the term to a metaphoric sense by saying that ‘the Boardroom’ is any room where decisions that affect the organisation are taken, because people at various levels of an organisation do impact on its perception and performance.
The State of Marketing Today
Regarding the state of marketing today, we need to ask and answer a few questions.
For most companies, brands are significant assets, yet how often and how effectively are brand and marketing decisions and investments rigorously analysed in the Boardroom? What impact does Marketing have on the top- and bottom-line results of companies and ultimately, on shareholder value?
Is Marketing today a proactive driver of the performance of companies or merely a passive passenger? In other words, is Marketing mixing (to pun the Marketing Mix) or missing in our organisations today?
Marketing: Missing in Action?
Marketing is the lifeblood of building brands, gaining and retaining customers. Yet, in an age when marketing is recognised as the most potent weapon a business can use to gain and sustain competitive edge, it does not always command the respect and recognition it seeks and deserves in the Boardroom.
In many companies, Marketing has been ‘missing in action’; marginalised, being seen as being little more than advertising, promotions and branding. Not the highest priority in the face of pressure from shareholders and margin erosion.
It appears that few business leaders understand the strategic importance and role of marketing investment in shaping a customer-centric business, and the connection between this and shareholder value. And so, the first cost centre to suffer when the business is looking for savings every year is the marketing budget.
How did marketing arrive at this crossroad? I would like shall share ten factors that I believe have contributed to this situation.
First, many companies forget that the primary reason why they are in business is to give value to customers, which would then lead to getting value (profit) in return.
This has arisen because of the second factor:
There is increasing pressure on the CEO and the Finance Director by Board members and shareholders for faster and higher returns on investment. This results in a short-term focus, rather than long-term horizons. As I read in a recent edition of the Harvard Business Review, it appears that globally, companies are being run by financial analysts with eyes on share prices on the various stock exchanges across the world.
Third, as a result of the focus on short-term or immediate returns, many companies are looking more inward (and perhaps, backward), concentrating on cost-reduction for improved margins, often at the expense of customer satisfaction and future growth. Competition has further exacerbated the situation and marketers have been reduced to promotions and discounts to win business and hit short-term targets.
Fourth. Marketing managers have not been adequately proactive in being lighthouses for the organisation and driving business strategy. Marketing ought to be the advocate of the customer or consumer within the company and catalysts of innovation, but we are not spending enough time and resources to understand and adequately represent the customer or consumer within our businesses.
Fifth. Marketing has tended to leave financial issues to the ‘finance department’, yet the language of business is money. In many businesses, the marketing team is not involved in ‘Pricing’, a key element of the marketing mix that influences consumer decision and the company top-and bottom-line. Added to this, many marketing people find it difficult to read basic financial statements.
Sixth. Although there is talk about marketing as an investment, marketers are still perceived in some companies, especially by the Finance function, as expensive, unaccountable spendthrifts.
The seventh reason arises from the sixth. Marketing does not consistently use empirical data to demonstrate its successful contribution to the company’s top- and bottom-line and justify financial investment.
The following eighth and ninth factors can make it difficult for marketers to get buy-in for their initiatives from other functions.
Eighth: Marketing people could be aloof in their relationship with other functions within the organisation. Consequently, they are perceived by some as glamour-seeking, arrogant, know-it-alls.
This leads to a ninth factor which is that some marketers do not sufficiently know the basics about other functions to enable them empathise and ask the right questions.
The tenth factor is that there is general perception that marketing, not being a technical profession like finance or engineering, almost anybody can be a marketer.
Getting Marketing to Mix
Having highlighted some key factors that lead to Marketing being ‘missing in action’ in many Boardrooms, how can Marketing mix better in the hallowed chambers? How can marketers place and keep marketing at the top of the Board’s agenda? How can marketing be more strongly positioned as a major business discipline that deserves greater respect in the Boardroom?
First, marketing must understand that what matters to the Board is the bottom-line. Marketers need to therefore be more business-minded and be able to understand financial statements and ratios and know how marketing strategies can influence these for better or worse. As marketers, we need to see ourselves and act as Business Managers that impact on the company’s perception, revenue and profit performance. In other words, focus on the big picture.
Second, winning commercial performance in any business, requires a deep understanding of the Consumer, who buys and uses; understanding the Customer across trade channels, from distributor, through wholesaler, down to the retailer; and understanding Competition. Marketers should be credible intermediaries between the market and company. This would mean spending more time to understand what customers want, how they like to buy and be serviced and really make the customer’s voice heard in the Boardroom and across the company. Firms need to remember that they are in business to add value to customers; this is how the business would grow and this would be reflected in superior shareholder returns. A customer/consumer view must drive all marketing activity.
Third, having found out what the customer view is, communicate effectively to gain invaluable internal support and completely integrate marketing ethos across the company. Marketers need to work with colleagues in other disciplines-finance, operations, R&D, supply chain etc, to help create and deliver the value the customer wants. In these respect, marketers need to know more about how the rest of the business works and how Marketing can have a direct impact on the development and operational process of the business. In many respects therefore, marketers should see themselves as ‘general managers’. This would require higher levels of Emotional Intelligence. Encourage internal branding and turn your fellow staff into Brand Ambassadors.
Fourth, marketers should be catalysts for innovation and agents of change to influence corporate strategy and growth. We must be professional in thought, word and deed with a vision, mission and passion to win. Talk the talk, walk the talk and walk the walk. Marketers should position themselves as the organisation’s strategy engine and provide leadership for the organisation. Marketers should develop the skills of ‘leading up’ that would enable them to influence the CEO & other members of the senior leadership of the organisation. I consider the Finance director as a key ally in driving the marketing agenda; get the Finance director on your side, and your job is half-done! To achieve this, we need to provide empirical data of what our marketing activities achieve.
Fifth. Marketers should be assiduous networkers and build a web of influence across society to raise awareness and understanding of the impact marketing can and does make to various strata of society.
Sixth. The need for marketing mentors. Senior marketers should get involved in building up the new and next generation of marketers.
Seventh. People who know about brands and marketing should be represented around the boardroom table.
In closing, I am fully persuaded that marketing is fundamental to the success of any organisation or nation.
I would only challenge us as marketers to build on our experiences and be truly expert in what we do. The future of our organisations depends on us.
I thank you for your very kind attention.
Author – Lampe Omoyele,
(then) Marketing Director, Cadbury East and Central Africa,
At the Chartered Institute of Marketing, Kenya Power Lunch, September 27, 2007