If the CEO in your organization is an alum of Procter & Gamble, it's unlikely that you have a battle on your hands to make marketing matter. Consider two P&G alumni who are among the highest-profile CEOs today: Jeffrey Immelt of GE and Meg Whitman of eBay.
Immelt, in his first year as successor to the legendary Jack Welch, appointed a chief marketing officer, the first person to hold the title at GE for nearly a decade.
Similarly, Meg Whitman recognizes marketing as the leading source of growth. In response to recent lagging sales in Germany, she advised the marketing staff to increase investment in advertising. The far more typical instruction from CEOs in a similar situation is to cut advertising expenses.
While these CEOs and the organizations they lead may be an inspiration to us all, my work with different types of organizations and interviews with highly successful executives have taught me that it's an ongoing battle with most CEOs to achieve the recognition and status that we know marketing deserves.
It is the equity that marketing builds within the organization rather than the equity that marketing builds with customers that often makes the difference between the CEO appointing marketing to a seat at the strategy table on the one hand—and powerlessness and marginality on the other.
In Part 1 of this series on making marketing matter to the CEO, I demonstrated that the unique contribution of marketing executives to the C-E-O is to focus on “C” for customers and competition. Then, in Part 2, I made the case for achieving influence and stature with the CEO through “E” for effectiveness—because, above all else, CEOs reward demonstrable results.
Finally, in Part 3, I end the series by focusing on the third component that is perhaps most critical: building marketing's equity within the “O” for organization.
Marketing executives tell me that even with the most uninitiated CEO, marketing can earn a seat at the strategy table when it builds internal strength through consistent and constant work in the following areas:
- Corporate buy-in and coordination across the organization
- Recognition of professionalism and expertise
- Accountability and measurement
- Forefront of change
- Seat at the top table
As illustrated in the following pyramid graphic, the five components build on each other. However, the work requires massive action in all areas concurrently.
In this article, I will briefly touch on some of the requirements of each component.
1. Corporate Buy-in and Coordination Across the Organization
Key to the importance of marketing to the CEO is an understanding throughout the organization that customer value is its unique focus and responsibility. The first step toward creating and strengthening this understanding is to conduct an anonymous survey of key decision makers in all departments about their perceptions of marketing.
Through this diagnostic tool, you will have the information you need to identify the gaps between what others think marketing contributes and what you now contribute, and what you feel you should or can contribute. Then you can implement an action plan to bridge the gaps.
You must thoroughly and regularly examine the relationship of marketing with each of the key functional departments, including operations, sales, R&D, HR, customer service and, above all, finance.
Because CEOs today are preoccupied with Wall Street and short-term performance—or, in the case of nonprofit organizations, key donors and grant makers—finance holds the key to the CEO. If you do this buy-in and coordination work effectively along with Accountability and Measurement (see #3, below), finance will recognize marketing as a source of profits rather than a drain on the bottom line.
2. Professionalism and Expertise
Marketing executives have three sources of credible Professionalism and reliable Expertise. First, and most important, is the use of customer data throughout the organization. Marketing must access, analyze and base decisions on data that is now a byproduct of operations and sales and stored in IT. Even though marketing is no longer the primary source of internally generated data, marketing can be the master, if not the sole owner, of hard evidence for critical decisions.
Second, marketing executives should create and tell the organization's master stories in compelling and motivating ways. Sometimes the stories are created with hard data, but more often they are created with soft, anecdotal evidence; sometimes the stories must be told to internal audiences and external audiences.
Third, marketing executives can drive an external focus throughout the business operation with a powerful internal result. After all, as Hulbert, Capon and Piercy point out in Total Integrated Marketing, “understanding markets, customers and competitors will help you ask better questions, create better plans and develop budgets that the company can meet.”
3. Accountability and Measurement
“Quantitative performance indicators” is the language of CEOs. There is no substitute. In response to the demand for accountability, marketing practitioners are developing major advances in measurement and metrics, both in terms of the income statement (revenue and profits) as well as the balance sheet (asset growth) impact.
Marketers must become masters in the use of quantitative tools to demonstrate the impacts of marketing programs, pricing decisions and distribution channels and to take all insights through a feedback loop of testing and modification. With a longer-term perspective, marketing should track customer asset growth, key staff retention and the creation of expertise, experience and processes—the assets that build real economic value in the knowledge economy.
4. Forefront of Change
All leaders agree that the pace of change today is faster than ever before, and if you don't change, change will defeat you. However, not all CEOs act accordingly. Marketing must be the “lighthouse” of change in the organization by keeping watch on the ocean of change and sending signals throughout the organization.
Market leaders such as Starbucks, First USA (prior to being acquired by Bank One) and Dell have created “venture marketing organizations” designed to “spot new possibilities, allocate resources to the best ones, and cut their losses as they go” (McKinsey Quarterly, 2000, Number 2). By leading the fluid evolution of the organization—regardless of the CEO's posture toward change—marketing will enhance its importance and value.
5. Seat at the Top Table
The Top Table is the place in the organization where market strategy is developed and secured. If the other four internal equity-building components are addressed effectively, it will be impossible to have a strategic discussion of the business without the input from marketing.
Enlightened organizations are increasing recruiting marketing executives, according to strategy consultant Steve Silver (“Bring on the Super-CMO,” in Strategy + Business, Summer 2003), because they want people who can rethink traditional marketing with ad agencies, media channels and trade and consumer promotion, and “partner with senior executives across functions in the organization to develop and execute marketing plans that achieve business goals.”
Although the five components of organizational equity can be initially tackled as a progression, ongoing success requires work in each simultaneously. Your diligent work will inevitably lead to the ultimate prize: a place of significance where marketing will contribute to decisions of strategic direction and growth. Then, marketing will not only matter to the CEO but will also be recognized as the top-line growth engine throughout the entire organization.
