Why? There are lots of good reasons, and they all stem from a fundamental shift in the role of marketing.
Marketing is becoming a value center instead of a cost center.The driver is the elevation of marketing to the more fundamental role of brand-building.
Marketing can be thought of narrowly as research, new product development, communications, and sales support. It is an artifact of the marketing department, and sometimes (such as in many high tech companies) the "marketing communications" department – the title alone is an emasculation.
(We understand that Hewlett-Packard has taken this trend to its logical conclusion and removed the word “marketing” from all titles since marketing is something "everyone should be doing." Down this road lies the elimination of the substantial body of professional expertise that is marketing, which is a road the high tech companies have been on for a long time.)
Brand-building, on the other hand, is a much more fundamental activity. Brands are financial assets. Their value is computed by Interbrand and paraded on the front cover of Business Week. Soon, brands will be captured on balance sheets as assets and their values will be scrutinized by Wall Street. Brand health also drives EPS (earning per share) – a growing brand commanding a premium price and customer loyalty is a profit machine and represents an earnings stream that can be projected into the future with confidence.
And, as is fitting for an activity that can drive both the balance sheet and the P&L, brand-building (formerly marketing) is an activity which commands the attention of the entire CXO suite – i.e. the CEO, COO, CFO and CIO as well as the CMO.
Today, there is nothing more important or more fundamental to the health of the enterprise than the health of its brands (or, of the corporation as a brand).
|
|
The Chief Marketing Officer title has been recently minted, and in most eyes does not command the same stature as the other CXO titles. The CFO and CIO run mission critical functions – ensuring that the economic engine of the enterprise is perfectly tuned and the technological underpinnings of the enterprise are optimized and, ideally, competitively advantaged. The company can’t succeed without these functions performing at the highest levels of effectiveness every day.
The COO pulls it all together and ensures the right allocations of the right resources for best corporate performance, while the CEO focuses on strategy and shareholder value. If the CMO plays a secondary role – and if her budget has to be cut in the 4th quarter to accommodate more pressing needs – then so be it. Marketing just isn’t as important as finance, technology or operations.
That was then. Today, there is nothing more important or more fundamental to the health of the enterprise than the health of its brands (or, of the corporation as a brand). And the Chief Marketing Officer is the creator, manager, monitor and guardian of the brand.
The CMO must understand the balance sheet and EPS leverage of the brand, and must take responsibility for the future cash flow implications of brand health. Insofar as the brand must be represented by every individual in the enterprise – every call center operator, every shipping clerk who affects timely delivery, every IT employee who affects whether systems properly support brand performance, as well as every salesperson and marketing practitioner – then the CMO must be able to speak persuasively to those individuals and inspire them in their role of delivering the brand to the customer every day.
The CMO now assumes a role that is not only equal to her peers in the CXO suite, but in some ways ascendant.
|
|
The CMO now assumes a role that is not only equal to her peers in the CXO suite, but in some ways ascendant. Certainly, marketing receives new levels of respect and support from Finance, for example. Where, previously, marketing was dinged for budget compliance, now there is a collaborative effort to develop financial models to link marketing spending to returns and measure the financial performance of the brand asset. Where, previously, marketing was the stepchild of IT (which worried about running the factory floor and the order taking system not the marketing department), now there are breakthrough enterprise marketing management systems designed to maximize the productivity and effective use of marketing assets.
The discussion in board rooms and executive councils is now dominated by the subject of brand-building. At EMM Consulting, where we focus on human, financial and technological systems for maximizing brand development, we find ourselves working in fields as diverse as consumer goods, financial services, pharmaceuticals, high tech, retail, and automotive. As a value center, brand building is fundamental to all these industries. There is no differentiation – all are brand-focused, all are marketing driven.
And now the CMO steps up to take center stage, with all the opportunity and responsibility that goes with it.
As I said, it’s a great time to be a Chief Marketing Officer.
Hunter Hastings is managing partner of EMM Consulting Group, which advises companies on how to implement Enterprise Marketing Management, a multi-faceted system for global brand management combining marketing knowledge, best practice processes and training with collaborative software, marketing tools and infrastructure. He can be reached at HunterHastings@EMMConsulting.net
|
