Scott Davis, a senior partner at Prophet, a US based marketing consultancy, has published an interesting book, The Shift, The Transformation of Today's Marketers into Tomorrow's Growth Leaders. His theme is that traditional marketers live in a short-term world built on an ever narrowing platform of marketing communications and promotions. They are often limited to running agency relationships and enabling the sales force, while constantly being squeezed for funds they don't have. But the days of marketers operating in a vacuum and marketing and business strategies being created independently of one another are ending. The best marketers are now creating integrated perpectives that start with the growth aspirations of their entire organisation. The Shift shows how Visonary Marketers are implementing new and better ways to win new customers and build deeper relationships with customers while keeping competitors at bay.
I have felt passionately about this for many years believing that marketing should not just be a department but be the whole purpose of the business. Criticaleye invited Scott to London to deliver his message at an event at the London campus of the University of Chicago, Booth School of Business. I was invited to share the platform with Scott and made the following contribution to the debate.
"I consider myself very fortunate in spending the first part of my career with four of the world’s great brand owners: Procter &Gamble, Mars, Pillsbury and Sony
I began at P& G who invented the brand management system. Neil McElroy in a famous 1931 memo proposed “brand men” with a seven point description of the new role that we would all recognise today as that of the brand manager. McElroy himself became Camay brand manager, (a brand I also worked on) and later became President of P&G at the age of 43. 10 years later he left P& G to become secretary of defence in the US Government where he was a guiding force behind the foundation of NASA.
Every P&G President since McElroy including the recent distinguished holder of the post, AG Laffley, has cut his teeth in the marketing department.
Mars was the first to adopt Rosser Reeves’ Unique Selling Proposition, (USP) as the basis of its marketing strategy. In Mars the brand manager was a mini-MD, with P&L responsibility. He ran his brand or product as a business within a business and competed for the resources of the rest of the company with his peers. He would recommend a marketing strategy on an annual basis and had to get the other partners in this strategy, R&D, Manufacturing, Sales and Finance to sign off on it to confirm their commitment to making it happen.
The purpose of marketing is to satisfy customers at a profit. And at Pillsbury I learnt that delivering the bottom line was crucial as this company lived and died by the demands of Wall St. However this was taken to extremes. When I joined Pillsbury the company proudly boasted of delivering 13 years of consecutive quarterly growth in earnings per share, the principal measure of success. But I learnt that this was often achieved by sweating assets both tangible and intangible. It was not a surprise to me that it was acquired four years later by Diageo who was also focused on City expectations but had a much stronger commitment to creating shareholder value through building brands.
But by then I had left to join Sony where I took on a Managing Director’s role for the first time, with full balance sheet responsibility. In Sony I set out a management structure expressed as follows:
Marketing is responsible to manage the market, i.e. the consumer
He brings that voice to the management team.
Sales brings the voice of distribution (retail, wholesale etc)
Finance ensures that the shareholders’ voice is heard- that a profit is made on the transaction.
And HR can bring the voice of employees, important stakeholders. Any other voice, IT, manufacturing etc is subsidiary to these stakeholder voices but can be of equal value to the enterprise in delivering quality, efficiency etc.
The CEO/MD’s role is to make decisions balancing the needs of these stakeholders.
Since leaving Sony I have spent the last ten years or so building a career in British PLCs and have served on several quoted company boards both in executive and non-executive capacities. From my experience I have concluded that the debate about the role of marketing in UK Boardrooms is moribund.
The issue is not how many Marketing Directors are on UK Boards, but is the Board focused on marketing data, however provided? Is it market focused in its decision making?
The idea that the time has come for CMOs to be more strategic, more empowered may well be right. For me, growing up in a well ordered universe like P&G and Mars it was a shock to learn that there were other less successful companies using different methods.
However, this does not mean that marketing trained people are always the right people to head up companies. Some of the banks were run by marketers instead of people who actually understood risk management.
Sony was perhaps a more successful company when it was run by engineers with one eye on the technology and the other on the market. For the last 10 years it has been run by marketing people with less understanding of the technology and what it can do, and consequently less vision. Ipod and flat screen TV should have been Sony territory.
This point is not just valid about Sony. I have seen research into technology product companies that indicated a significant advantage for CEOs of smaller companies with an engineering background. Midsize companies with revenues between $100 million and $1 billion whose companies had engineering experience had a median three year growth rate of 98%, compared to just 66% for companies whose CEO had no engineering background.
The time is also right in that there will be a massive change in the way that economies and companies are run and there will need to be both a strong focus on markets and on cash generation. And so finally a few comments on where tomorrow’s CEO will come from.
One of the essential traits that is growing in importance today is a leader’s ability to anticipate market opportunities before anyone else sees them and the discipline and agility to seize them. This foresight ranges from identifying potential market changes before they happen to predicting upcoming hiring needs to prepare for rapid organizational growth.
The foundation for successful leadership is exceptional communication and interpersonal skills and the ability to influence internal employees and external stakeholders. Mobilising teams and working effectively with a broad range of partners and stakeholders, from the board to an executive’s employees, is fundamental to a company’s success.
To perform at the highest levels executives must be able to set a vision, formulate sensible business strategies and drive them through the organisation. If the marketplace dictates change executives need to seek input from others, pinpoint how to alter the current strategy, adapt rapidly and communicate the changes to all stakeholders.
As I say these words they describe for me what one had to do as a young brand manager in Procter & Gamble or Mars. In the right organisation marketing is as good a place as any for the future CEO to gain his spurs.
But it is not a universal rule and at the end of the day the future CEO will be or should be the best person for the job."
And if Scott, or any of his colleagues at Prophet, is reading this let me remind them of the words of Winston Churchill: "I prefer not to prophesy before the event. It is much better to prophesy after the event has already taken place." I can certainly think of a number of marketers who followed that advice!
Copyright David C Pearson 2009 All rights reserved