How can marketers gain influence in the boardroom?

In January, “Marketing” magazine published an article entitled “Marketers Lack Influence in the Boardroom”. The article was based on the findings of a Deloitte report on the attitude of organizations to “marketing”, entitled “Marketing in 3D”. This report, which is available on line, was based on 217 in depth interviews in five European countries, and gives a picture of “marketing”, and attitudes of businesses towards it. The results were not dissimilar to other reports that have been published over the past five years or more.

A survey in 2005 by the Chartered Institute of Marketing, revealed that just 11 of the United Kingdoms FTSE 100 companies had a marketer on the main board. In the majority of businesses, the management board consists of a Chief Executive Officer (CEO), a Chief Financial Officer (CFO), Chief Production Officer (CPO) or equivalent, Senior Personnel Officer, and Sales Director.

While the term “marketing” is generally defined as “comprising all those activities involved in anticipating and satisfying customer demand profitably,” most management boards generally do not appear to understand the term, and consider it synonymous with advertising and promotion. However, the term “sales” is easily understood by senior executives, having quantifiable results in terms of revenue and volume. In some businesses, the sales director will be titled Sales and Marketing, indicating that their responsibilities are wider than purely Sales, covering other disciplines such as advertising and customer relationship management (CRM).

The purpose of the marketing function of any business is to generate sustainable profitable revenue by anticipating and satisfying customer demand. Thus the effective management of the marketing function is fundamental to the success of every business.
Considering that generating revenue is the prime function of any business, it is surprising that probably the majority of businesses would be hard pressed to say what return they get for all the money invested in getting and retaining business. In fact, many businesses would find it difficult to actually quantify how much they spend or invest in getting and retaining business.

Why are there not more designated marketers at board level? The answer probably lies with marketers themselves. Many are confused about their role, having limited objectives, being highly specialized in specific disciplines and serving on average only 22 months in post before moving elsewhere. In addition, what is evident from these reports is that marketers, especially in large organisations, are seen as increasingly specialised, separated from their colleagues and operation in what have been called “functional Silos”

While the sales function must be managed by a competent sales manager, all the specialist support functions of marketing, such as CRM, advertising and promotion, marketing research, product development, product and brand management also require specialist management. CEOs and CFOs need to understand that although the marketing function comprises many specialist activities they need to be managed collectively as a single business area. This is because they are mutually supporting specializations that collectively generate the necessary revenue for the business. However if revenue generation is to be managed effectively it requires an overall manager of director status, who would be the “Director of Marketing” and to whom all the specialist discipline managers would report.

Because of the difficulty that many people currently have, in achieving an accepted consensus view on the definition of marketing and its responsibilities, perhaps an alternative term should be used at board level. This term could be known as “Business Operations”. As such “Business Operations” would be responsible for anticipating, finding, getting, retaining and satisfying customer demand profitably. A director of “Business Operations” would therefore be responsible for generating the sustainable profitable revenue for the business, and to do it as efficiently as possible, with the minimum of costs and use of assets.

The effective director of “Business Operations” need not necessarily be a professional marketer, but will have to be a good staff manager, capable of managing talented but often narrowly focused, specialist marketers into an effective team, to generate sustainable profitable revenue for the long term.

If marketers seek to have influence in the boardroom, they must learn to speak about profit, revenue and costs, which is the language of senior management and directors. Business is about profit and profit is about revenue and costs, not brand and image.

Marketers must be able to quantify and demonstrate the contribution of the marketing function as a whole to the business, both for the immediate and the long term, and not confine themselves to their own particular specializations. Should they seek to be in senior level appointments or aspire to be directors of “Business Development”, then marketers will have to prove themselves be good leaders, managers and motivators, able to think strategically for the long term development of the business. If marketers confine themselves to the language of brand, image, and CRM they are unlikely to qualify themselves for higher management.

© N.C.Watkis, Contract Marketing Service 07 Mar 08
Contract Marketing Service, (Specialists in Measuring Marketing Performance and Return on Marketing Investment.)

March 7, 2008   Posted in: marketing management

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