Marketing in the Boardroom
— Questions directors might ask and what to look for in the answers
By Kevin Luscombe, Graeme Chipp and Peter Fitzgerald. Published by Growth Solutions Group Pty Ltd, Melbourne, 2007. 143 pages (pb).
RRP: $39.95. ISBN: 1 92089 263 X.
I have often wondered why most company boards have finance committees, human resources and remuneration committees, ethics committees and audit committees, but no customer or brand committee, especially as the customer and brand are central to strategy and the source of operating revenue and profits.
Marketing in the Boardroom places the issue squarely on the agenda, saying, “For most companies, brands are significant assets and marketing is a major investment. Yet how often – and how effectively – are brand and marketing decisions and investments rigorously analysed at board level?”
It is not that marketing is more important than other areas of the company, just equally as important. The book quotes Sir George Bull when he was chairman of Diageo. He stands out by declaring that: “Brand deliberations belong in the boardroom, with all the data, scrutiny, commitment, rigour and accountability given to the key financial measures of a company.”
As the authors point out, most boards are filled with directors who have a background in financial, legal or operational roles and, therefore, a board's focus can be a direct reflection of the board members’ backgrounds rather than a function of the needs of the business.
That situation won’t change overnight. So the issue is, how to help directors to broaden their skills and increase their engagement in the customer/brand strategy of the company? Which is why Marketing in the Boardroom is essential reading. It has been written for directors and CEOs to help them analyse the effectiveness of marketing strategy in their organisation. No doubt market analysts and shareholder advocates will also be interested in the questions that boards ask about marketing strategy.
The book also provides a wonderful insight for marketing practitioners on what directors want to know (or should want to know) – and what directors should look for in the executive response. It will give practitioners confidence in the validity and importance of the information they put forward. (It is too easy for boards to avoid a meaningful discussion about the customer and brand by saying, “Just give me the high-level stuff”. Too high-level and the analysis is cursory.)
Recognising that the role of marketing is to identify, attract and retain the profitable customer (my definition), the book addresses the full marketing discipline and not just marketing communications. “To put it at its most practical, marketing is about the role a company plays in the choices of its customers and how value is delivered to those customers.”
A degree of rigour in board reviews of marketing effectiveness is important because, as this book explains, “through the culture they foster, the way that they operate and questions that they ask, boards can also have a profound impact on operational performance”.
The lesson is clear: if the board is not interested or engaged in the marketing strategy of the company, that attitude will undoubtedly cascade throughout the organisation. Lack of attention to the marketing strategy and intent at board level will be reflected directly in the level of management support and resource allocation, and therefore the effectiveness of the marketing function.
To tackle this problem, Marketing in the Boardroom arms directors with an overview of the marketing philosophies, concepts and questions they need to consider at board level. The Q&A for each marketing topic is prefaced with an introduction to the concept and includes a practical scenario that would mirror a typical board member’s experience.
Upwards management has its limitations, so marketing practitioners will be pleased see the authors emphasise that marketing should be driven from the most senior position in the company. They make it clear that marketing is not a functional job but an organisation-wide discipline and philosophy. “Marketing need not be thought of as a specialised function. It is a ‘whole of business’ market-focused discipline.”
The authors quote Sir George Bull, who points out that if the business community can unlock the gates to the brave new world of marketing – led by business management – then job creation, wealth and higher living standards will flow. Ever the optimist, I think that Marketing in the Boardroom could provide that elusive key.
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