Monday, April 4, 2016
A MARKETING CEO - AN OXYMORON?
“CEO’s: If your marketing teams can’t provide clear analytics based on goals that drive your business, you need to find someone who can.”
- Mark Yeager, Partner at Yeager Marketing from
“4 Questions CEO’s Wish Marketing Could
Answer—Without Having to Ask”
“Marketing is too important to be left to the marketing people.”
- David Packard, Hewlett-Packard
Recent articles across a number of business periodicals and on-line blogs indicate that the number of CEO’s who came up the ranks through Marketing is lower than ever. Ditto for those serving on corporate Boards of Directors. This trend may not surprise everyone; but for a good many of us who were recruited and trained as marketers in order to eventually become general managers, the trend is disheartening. It begs the question, for us at least, “How did we come to this?”
Of course, we know only too well that not all industries have embraced the practice of preparing their marketers to become their future CEO’s…of, per the original idea behind the Brand Management system, developing one into the “President of the Brand” in order that she or he might one day become the “President of the Division or Company.” As we have noted numerous times over the years, “small m” marketing abounds: in many medical device, pharmaceutical, and high-tech companies. Marketers in these industries are primarily expected to be service to Sales; as such, their “support” experiences, by themselves, cannot begin to prepare them for strategic direction-setting or senior line management. But, still, what about all those marketing-driven companies with longstanding reputations for marketing prowess? Surely they ought to be continually churning out a good many of tomorrow’s CEO’s?
Well, as it turns out, there are some “trends underneath the trend” of fewer marketers becoming CEO’s—some of them quite subtle, others more obvious. And we’re convinced that, taken together, these underlying trends go a long way towards explaining why, more and more, a Marketing CEO has become a kind of oxymoron. For example…
1. Most marketers are trained to grow market share, not corporate profit. Honestly, how many organizations actually (a) train their marketers on financial fundamentals, (b) involve their marketers in weekly or monthly P&L reviews, or (c) even provide them access to their own brand’s P&L statement? Keep in mind, we’re not asking here about which organizations expect their marketers to manage their brands’ P&L’s. Rather, we’re simply pointing out that, if a company really wanted to groom its marketers to eventually be considered for GM-type positions, they would at least invite them into their brand’s P&L conversation. They would get them learning about and practicing the habit of simultaneously growing both share and profit. Case in point: some years ago in the middle of an annual marketing plan presentation to the company CEO, he interrupted one of us while pitching the launch of a new size (to grow retail inventory and market share) by asking, “Before we approve any new size extensions, what’s your margin strategy for the brand?”
2. Most marketers are never asked what productivity they will deliver. At the most basic level, we tend to think of productivity as being “cost savings”—normally in the form of simply reducing fixed or variable costs or just cutting out/delaying until later previously planned expenses. And, most typically, it is the operational functions within the company that are charged with identifying and delivering these kinds of basic productivity. Okay, sure, marketing managers are also often asked to cut their previously planned and approved budgets; but anyone can “return money from an account” when commanded to do so. The real productivity that most marketers rarely get pressed to think about and deliver is this: double, triple, or quadruple the effectiveness of their marketing initiatives, with the exact same cost. Imagine that impact on the brand’s P&L!
3. Along these same lines, most marketers think “spend,” not “invest.” Think about it. Why is the money that marketers employ almost always called “marketplace spending?” Or just as likely, “Brand Marketing Expense (BME)?” Why do we use those nouns? Conversely, why isn’t what marketers spend or expend called “marketplace investment?” It ought to be called that! After all, no company has unlimited resources; in fact, almost every company faces dwindling resources year-to-year. Such precious resources deserve to be thought of as investments to grow (or even maintain)…not merely as costs of doing business. When our language, both by marketers and their senior managers, refers to marketing resources as spending, is it any wonder that brand marketers are perceived as running cost centers, as opposed to profit centers?
4. Most marketers demonstrate no ROI accountability—because most of their senior managers fail to require it. For sure, this has to be the most obvious and biggest reason why there are fewer marketers taking over CEO chairs these days. The last thing you want in a new CEO is to start training him or her on how to deliver, measure, and assess a Return On Investment. In fairness, virtually every seasoned marketer we meet says he would like to demonstrate the return on his brand investments. But all too often the excuse given is this one: we have no way (and no money available) to set up the requisite methodologies to determine ROI. It’s a convenient excuse, to be sure; but as Mr. Yeager also insists in his “4 Questions” article, “Anything that costs time or money can be measured in some way, and if it can’t, you are wasting both.” Getting to ROI for marketing investments is not merely doable, it has been routinely practiced—at least at one time—by all the big-time marketing companies (Procter & Gamble, Unilever, Nestle). Until the practice takes hold in more and more companies, though, we’re very likely to have even fewer “marketing-grown” managers becoming CEO’s.
As a post-script to all of this, you have to wonder what Peter Drucker would think of the Marketing CEO oxymoron were he around today. Remember it was his firm (and oft-quoted conviction) that:
“Because the purpose of business is to create a customer,
the business has two—and only two—basic functions:
marketing and innovation. Marketing and innovation produce results; all the rest are costs.
Marketing is the distinguishing, unique function of business.”
Richard Czerniawski & Mike Maloney
430 Abbotsford Road
Kenilworth, Illinois 60043
tel 847.256.8820 fax 847.256.8847
reply to Richard:
1506 West 13th
Austin, Texas 78703
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