Marketing and CEOs

Rob at Business Pundit quotes Nirmalya Kumar from HBS Working Knowledge.

CEOs have lost faith in marketing primarily for two reasons. First, shareholders and analysts are pressuring corporations and their CEOs to deliver against short-term profit and revenue objectives. CEOs are unsure of returns from marketing expenditures and marketers have acquired a reputation as a “spend” function rather than a “save and make” function. The belief is that a finance person managing a brand would probably take more time to determine how much to spend to support it and how to measure the effects of the spending than a marketer who would just ask for more money. Marketing initiatives must have a substantial demonstrated, top- or bottom-line effect to excite the CEO.

Hmm, hardly the first time we’ve heard this one. It strikes me that the relationship between CEOs and Marketing is frequently abusive. The CEO plays persecutor/bad parent and the Marketing Director plays victim/hurt child. They are stuck in a tedious script. It seems to go a bit like this.

CEO demands bottom-line proof for the value of any marketing initiative. Marketing knows that’s barmy because not all value can be measured immediately. But instead of engaging in a rational conversation, the Marketeers hire a mob of so-called experts to do complicated research and econometrics to come up with plausible sounding numbers to placate CEO. CEO smells a rat but probably enjoys having a victim to abuse (after all, he takes all the crap from the teenage scribblers in the City, why can’t he pass some of it on?). So he doesn’t fire the marketers, but sneers at their numbers, and carries on.

Meanwhile, the marketing department is now enslaved to metrics it doesn’t really believe in anyway. And wonders why employees struggle to “live the brand” and all their other slightly power-crazed ideas. Indeed, they compensate themselves for the obvious lack of respect of their CEO by indulging in self-aggrandising schemes to “build the brand”.

Now let’s add a generous dollop of denial. From time to time I go marketing events and hear Marketing Directors parading their numbers, thumping their chests and shouting their utter faith in everything being measured. They do it with the characteristic vehemence of those trying to persuade themselves.

Lest this sound like a long lament, I don’t think the answer is either (a) trash all metrics as absurd. There’s nothing wrong with metrics if honestly compiled and carefully interpreted. In fact, they’re jolly good things to have around; or (b) fire all marketing directors, much as their creepy sychophancy may offend. I’m sure that on a good day most of them are able to be imaginative and persuasive if managed well.

It’s an unfortunate fact that stock market companies are massively constrained by the finanical community’s short termism. But that doesn’t make it impossible to create value for customers, and somehow satisfy the City. It just makes it very difficult. A few businesses do seem to pull it off over a period of many years.

Do I claim to know why that minority of companies succeeds? No, I don’t actually. In fact, I’m rather wary of all these experts who claim to have the formula for success distilled from the folks who achieved it. Let’s face it, if business really were just a question of following one of those instruction manuals, how come no airline (except maybe JetBlue) has come close to emulating Southwest Airlines in all these years?.

What would I do? I’d try to get the CEO and Marketing to cut the crap and have an honest conversation about what is and isn’t measurable. I’d ask the CEO to stop bullying marketing and do a better job of standing up to the clever-clogs analysts instead. And invite the marketing guys to get more real in the ambitions they set for their brands.

Actually, I’m not sure that even this is the answer; but I would like to think that a more authentic relationship between the two could uncover some much more satisfying ways of succeeding in perplexing, unpredictable circumstances.

The future is not known. For myself, I’d much rather go on that journey with fellow travellers who are open to surprise than a bunch of high-strung experts who claim to know what’s going to happen. Maybe the CEO and the Marketing Director could give it a try too.

2 thoughts on “Marketing and CEOs

  1. Marketing Playbook

    Finally, they see the light

    BusinessPundit: Marketing, Marketing, Marketing Hey, we’ve always known that everything was marketing and marketing was everything 😉 But it’s great to see that others are coming around. Seriously, it’s great to see books like Kumar’s Marketing as Str…

  2. NK

    Really appreciated your POV on this. Was very happy to see some comments from Rob at Business Pundit highlighting marketing as a strategic way of thinking rather than just a set of tactics. But have to agree with you that too often CEOs and marketing are at cross purposes with tons of effort spent on measuring what is measurable to cya and not enough time spent agreeing on long term strategic fundamentals that just plain can’t be measured in the short term.


    The book Marketing as Strategy that the previous two were talking mentions in Chapter 8, that marketers ought to beware of “make believe metrics” because some part of marketing is unmeasurable and instead a way of thinking strategically from the outside (customer) in.


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