How do we get every board to have a marketing professional?
Marketing has been defined in short as the anticipation and satisfaction of consumer and customer needs. This means every business that exists has done some form of Marketing. It means every person lives by selling something. So that means this profession is very critical to the success of every organisation profit and not for profit.
Unfortunately, research has shown that marketers, despite their said and accepted importance in all organisations, they are rarely represented at the strategic level i.e. as CEO and board members. A research paper in the Journal of Marketing by Kim Whitler et al states that from a study of 65 000 global board members, only 2,6% were marketing-experienced board members (MEBM).
Is this picture the same in Africa and Zimbabwe?
Sadly Yes. In SA in a study that we conducted of 20 JSE listed companies there were only 14 MEBMs compared to 72 with a Finance background and in Zimbabwe on the Zimbabwe Stock Exchange in a sample of 20 companies only 7 members have a marketing background vs 42 with a background in finance. This makes for dire reading especially because the 2009 Cranfield Business School White Paper, which included 100 chief financial officers within its survey, found there was no significant difference in the proportion of chief marketing officers and CFOs that recognised the strategic importance of marketing (68%) or the exceptional importance of branding (80%) to their business.
Whitler’s study found that of the 1500 S&P firms studied over a 6 year period, those with MEBM delivered on average 3 percentage points higher returns than those without, with the stats being higher when the firm was in decline.
Of interest is also a study by Hedrick and Struggles which found that of the Fortune 1000 companies only 34 Marketing Directors sit on the executive board. On the FTSE 100 18% of the CEOs are former Marketers making Marketing the second most common route to CEO only behind those in Finance (36%).
So why there are so few marketers on the boards despite the proven worth of their presence?
The below are answers from board members who were asked this question. They are not nice to hear but give context to current position and as a profession we need to demystify them if we are to increase our influence
- Firstly, marketing has an image and language problem. Marketers are often misunderstood through the use of jargon to communicate with other board members. We tend to speak about brand awareness, equity scores to people who have no knowledge of it. Imagine speaking to an engineer board member who rose through the mines corporates of Middle Zim about the consumer decision funnel. They would not understand you and would not see the value of that information and if they need a board member they are unlikely to call on you vs someone who is speaking about Gross Margins.
- Currently CEOs and boards are measured by the return they deliver to shareholders. However most senior marketers in their organisations are measured on market KPIs which the shareholder is not very interested in if it doesn’t impact their pockets positively
- Marketers have generally been found to have little understanding of the financial impact of their actions and activities on the income statement and balance sheets. This again puts them at odds with shareholders. The shareholder is interested in ROE, EBITDA which sadly most marketers cannot fully understand.
- Most marketers are not strategically positioned in their firms. Most organisations view marketing as just another function and not as an enterprise wide activity that determines the course of a business.