The CIM does not know the best way from B to A

A CIM paper says marketers must learn accountancy and put shareholders first if they want seats on the board. But what about the brand? asks Alan Mitchell

If a brand is not performing well – slow growth, margins under pressure, little customer excitement – is it always the fault of the brand manager?

Take two contrasting scenarios. Brand A is the first of its type: a brand new concept in a fresh new market. It’s got everyone agog. Brand B has been around for decades: competitors have piled into the market from all four corners, every new good idea is copied instantly. Product parity has set in and the market is mature.

Looked at superficially, A’s brand manager is a genius hero with a Midas touch. Every new tweak in product formulation, packaging, design, advertising or promotion seems to be rewarded with rocketing sales. Whereas, judging by results, brand manager B is clearly a talentless dork. Nothing she does seems to work. The returns on her marketing investments seem paltry. And what’s more, we can’t find anyone who can do much better. Tut, tut. The calibre of marketers nowadays is really very low.

Yet, if she were lucky enough to work for Brand A, even our “talentless dork” would have probably looked pretty good. And even a marketing genius might struggle to reinvigorate Brand B. So is it right, or fair, to attribute the success or failure of the marketing in question to the skills and attributes of the marketers?

The question is becoming important because of the way the debate about marketing effectiveness, accountability and status (marketers on the board) is evolving. Here’s a suggestion: when skills, measures and margins loom large as a problem, it’s a sign that the wealth-creating engine behind them is stalling. Seemingly inadequate skills, measures and margins can be a symptom, not a cause, of a brand’s problems. If so, attempts to cure them won’t work.

Take the Chartered Institute of Marketing’s Hard Edged Marketing paper. It argues that to earn their rightful seat on the board, “driving business strategy and management”, marketers must do three things.

First, they must develop a whole set of new skills. These include finance (connecting improved marketing performance to business results), communications (“marketers must be able to engage with people”), strategy (“marketers must understand the business priorities”), leadership, creativity, openness (to act as “catalysts by building their mental agility and stimulating others to do so”) and collaborative working practices.

Second, they need to learn the language of finance, embracing measures that truly connect with the people who run the company.

Third, they need to undergo a “fundamental change in attitude and direction” to embrace the cause of shareholder value. Marketers, we are told, have “focused on value for customers almost to the exclusion of all else”. That’s not good enough any more. Of course, marketers must embrace all stakeholders. But they must realise “that the balance has shifted towards the relationship with shareholders”. To get a seat on the board, marketers must demonstrate “a willingness and ability to see the world from the board’s perspective”.

Is this really an agenda for progress? Take the skills issue. As the CIM paper admits, its skills wish-list is “daunting”. So daunting in fact that only 50 marketers in the whole of the US, it seems, are good enough to earn the title “strategic”. A question: if the only way forward is to rely on a new breed of marketing superheroes more suited to comic books than reality, are marketers really lacking the necessary skills, or are we simply expecting them to do the impossible?

Next, let’s take the issue of measures. The original impetus behind the quest for improved measurement and accountability was a desire for better learning. You cannot identify ways to improve performance without robust yardsticks to help identify the difference between relative success and failure. Measuring and learning go hand in hand.

The trouble was – as was universally recognised – that traditional accounting measures simply don’t pass muster. They are inward-looking, backward-looking and transaction-obsessed, whereas the focus of marketing’s work is outward-looking, future-focused and relationship-based. Traditional accounting just can’t get its head around the measures that really matter, such as brand equity.

But what’s happening now? Under the banner of accountability and the need for board approval, the whole agenda is being flipped on its head – to shoehorn the measurement of marketing’s outside-looking, future-focused work back into a discredited, inward-looking framework that cannot deal with the issues it now confronts. As Tim Ambler, author of the influential book Marketing and the Bottom Line remarks: “While I do indeed think marketers should understand finance, it is more important for the board and the finance director to understand marketing. Accountants merely count the cash that marketing creates.”

Which leads us to the third point. Brand A is in a virtuous spiral where everyone wins: customers, employees and shareholders alike. But Brand As have a habit of becoming Brand Bs. When they do, the danger is that each group refocuses its attention to fighting its own corner for a bigger share of the same cake, rather than baking a bigger cake.

That’s exactly what the CIM now seems to be proposing: “rebalancing” priorities from consumer value to shareholder value; and fighting marketing’s corner internally against other functions. This is how Hard Edged Marketing concludes: “When marketers can demonstrate that return on marketing is higher than for other corporation functions, then they will have won the right to drive success.”

Is this really the sort of attitude chief executives and board members want? One function attempting to score points over another to prove its superiority and get a seat at the table?

There’s a huge issue looming here. Yes, marketing has problems. But are they structural – relating to the evolution of markets and whether today’s business models are keeping up with changing consumer needs? Or are they simply implementational, revolving around skills, measures, and who holds what position?

If we tackle the wrong question, we won’t ever find the right answer.

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