Philip Kotler, marketing guru at Northwestern's Kellogg School of Management and author of many classic marketing texts and articles, writes in Marketing Insights from A to Z, “There are two types of CEOs: those who know that they don't understand marketing and those who don't know that they don't understand marketing.”
Whether Kotler overstates the problem or not, we professional marketers know that if the value we bring to our organization is not understood by the CEO, we will not have respect and influence anywhere in the organization.
It is ironic that we are paid to use our skills and experience to help build the brands of the organization's products and/or services, but, in the process, we have not built our own brand--our unique promise of value--inside our organization.
If the CEO is the most important of our internal targets, how can we build the internal brand for the marketing function that reaches the top? That is, how can we ensure that the CEO will recognize marketing as a contributor of significant and differentiated value to the organization?
Interviews with senior marketing executives and consultants--in large and small, for-profit and non-profit organizations--and books by CEOs and leadership thinkers, suggest our strategy should have a C-E-O focus. This article starts with the “C,” and Parts 2 and 3 will cover “E” and “O,” respectively.
C Is for Customers and Competition
Marketing must build distinctive value to the organization based on its external focus. The essence of marketing is the work of customer creation and customer satisfaction, so this work can only be done with careful attention to details outside the organization. While operations, finance and information technology are each concerned primarily with internal details, marketing builds direct access to outside realities of customers and competition, realities that ultimately determine the performance of the organization.
Peter Drucker, the management thinker extraordinaire, long ago recognized the internal focus of executives as an obstacle to effectiveness in his classic book The Effective Executive: “Unless he (the executive) makes special efforts to gain direct access to outside reality, he will become increasingly inside-focused. The higher up in the organization he goes, the more will his attention be drawn to problems and challenges of the inside rather than to events on the outside...
“The bigger and apparently more successful an organization gets to be, the more will inside events tend to engage the interests, the energies and the abilities of the executive to the exclusion of his real tasks and his real effectiveness in the outside.”
While marketing's external focus may often alienate it from other internal activities and staff, it is this very external focus that will contribute significant and differentiated value to the CEO. The best CEOs know that changes in trends outside determine the success or failure of an organization and its efforts.
Consider:
- In leading his historic turnaround of IBM in the mid-90s, then CEO Lou Gerstner, depended upon marketing to drive the radical cultural change from a “we tell you” product and sales orientation to a “(in the shoes of the) customer” orientation. He hired a senior marketing executive with whom he had worked at American Express to be IBM's first Vice President of Marketing. To be successful, Gerstner writes, “IBM not only had to sell more of what it had made, it also had to recast its image and reestablish its relevance to the market place.”
- Jack Welch, who led the legendary growth of General Electric as CEO, is reported to have devoted 100 days each year with customers.
- Michael Dell, founder and CEO of Dell Computer, spends a significant amount of time listening to tapes of both satisfied and dissatisfied customers. To free himself to focus on customers and strategy, he has designated his Chief Operating Officer to tend to the day-to-day running of the business.
- David D'Allesandro, the CEO of John Hancock, has been the champion of the corporate brand. Recognizing the challenges, D'Allesandro writes about what is takes to build a great brand, highlighting a need to focus the external environment where marketing can help most: “It takes leadership to persuade the rest of the company to follow your vision. It takes an artistic sense of proportion and timing. It takes a ruthless willingness to distinguish yourself from competing brands and, hopefully bury them in the process. It also takes a certain empathy with the people who buy your products and with humanity at large.”
- Remember that the most celebrated CEOs of our time--Welch of GE and Bill Gates of Microsoft--were unable to see the potential of the Internet until many others already had. Clearly, no one man or woman can know all the changes in relevant trends in the customer population, in competitive organizations and in the cultural landscape that have important implications for the future of the organization.
Marketing will earn the CEO's respect if it points the way for customer focus and competitive advantage through brand building and tracking changes in the marketplace.
The Lesson of “C:” Listen acutely to Customers and work to differentiate the organization from the Competition, and your CEO will listen to Marketing and differentiate Marketing from the internal competition.
Part 2 of this Making Marketing Matter to the C-E-O series will cover “E” for “Effectiveness,” including the elements of marketing that lead to executing with excellence, the second dimension required for impact and recognition.
Part 3, the final part of this Making Marketing Matter to the C-E-O series, will cover “O” for the “Organization,” an exploration of the keys to working well with all other departments within the organization.
