Time to put a marketer on your Board?

Look at the Board of any major company. Who’s on it?

Maybe the founders of the firm, if they haven’t already been levered out at some stage by the Banks and Financiers.

Certainly lawyers. Lots of lawyers.

Accountants and figure-crunchers? Yup, plenty of them.

People who’ve bought in, looking for capital growth. Who usually don’t play an active role in the direction of the company except to exclaim “Don’t waste my money! Stick that in dividend!”

And chances are, still, that they’re all men.

Are we being too cynical? Perhaps. But the simple fact is there is one glaring commission from most Boards, and it is people with real-world marketing experience.

Why Forward-Thinking Companies Put Marketers on Their Boards

Now Alicia Hatch, from Deloitte Consulting, has gathered together the arguments for more marketers on Boards, writing in Ad Age.

She says: “Over the past decade, we’ve all seen how rapidly the the influence of marketing has expanded.” Some of us would actually argue it’s been in decline, with businesses becoming more functional and transactional and less about building a strong position in consumers’ minds, backed by process changes that give customers what they want. But what is for sure is that representation from marketing isn’t growing nearly as fast on boards as it should be. In 2016, only 2.6 percent of board members had marketing expertise.

In the age of customer-centered business, how can this be?

Marketing still faces an uphill battle with leaders who grew up in a different business environment, many of whom sit on boards and choose new directors today. Many still carry common misconceptions from the past — for example, seeing marketing as a tactical instead of strategic activity, reliant on soft-skills and based in luck, and not as a centre of real long-term value creation for the business. It’s far too often sidelined as a cost, not understood as an investment.

Ms Hatch argues that companies that will thrive into the future are completely re-orienting their business around their customers. Chief Marketing Officers (aka Marketing Directors’ although not necessarily with Board seats) are uniquely positioned to lead this shift as the orchestrators of the customer experience and those closest to the customer data.

Visionary boards will recognise that to compete in a customer-driven world, marketers should play a more strategic role in the boardroom to help steer organisations through the required shift to customer-centricity.

Here are three key reasons why companies need to bring more marketing perspectives to their board:

1. Customer-centric companies win, and marketing is the center of customer intelligence.

With a large majority of companies competing primarily on customer experience to win today, marketers have become a vital influence across nearly all business functions. As that influence continues to grow, and along with it ownership of technology and customer data, marketers hold the key to critical insights needed to realise these experiences.

We know that customers who have the best past experiences spend 140 percent more compared to those who have the poorest past experiences, and that customers with positive experiences remain customers for five years longer than those with negative customer experiences. Boards can’t afford to miss out on the marketing perspective that brings that strategy to life for their organisations.

2. Including marketing improves diversity of perspective — from competency, to gender, to race.

Diversity of perspective leads to better performance, and that doesn’t stop at the board room. In a recent study by the Peterson Institute, researchers found that diversity in general is what leads to stronger performance. For instance, simple promoting a single female to CEO doesn’t necessarily mean better performance than a man when controlling for gender in the rest of the company. Instead, the higher rate of diversity throughout the organisation is what is most impactful.

What does all this have to do with including marketers on boards? It turns out marketing is one of the more diverse of professional groups. Last year, while only 5 percent of CEOs and 12 percent of CFOs of the top 1,000 U.S. companies were women, but they have much stronger representation in marketing. By increasing your marketing representation at Board level and in senior exec teams, you may also increase the role of women.

And last but by no means least, if a company’s product or service range targets women more than men, or at the least equally, does it really make any sense to have an all-male Board? Especially a Board drawn from high-worth professions, one step removed from real-world experience?

3. Companies with marketing representation on boards perform better.

Likely as a result of stronger customer insights and diversity of thought, companies whose boards include marketing representation have been shown to perform better— even more so when the company was in a period of decline.

As marketing has become more data-driven, and the pace of change so rapid, marketers are showing they can generate the critical insights needed to help a company turn the ship around, see new opportunities and execute strategically in a way that customers will respond positively to.

It’s time for marketers to seize the opportunity

Nearly two-thirds of respondents from the most recent Deloitte board survey said they added a new director in the past year, and 78 percent have a policy for regularly refreshing those seats. Not only does that mean that there is opportunity, but companies are showing through these policies that they understand the value of new perspectives in driving their companies toward a successful future.

That’s why the time is ripe for marketers to take their seat and help organisations realise customer-centricity — all the way from the top.

At MOP, we are very clear. It’s time to make marketing voices heard where the real decisions are made.

We pay a lot of lip-service to being “customer-centric”. It’s time for big businesses to walk the walk as well as talk the talk. It’s not enough to have senior marketing reporting in to Board members. They need to be on the Board, contributing to the whole conversation.

Reporting Ad Age August 2017, with additions from MOP. We also note that MOP has a female Managing Director …

 

Author: Stephen Yolland

Director of Creative Strategy and Partner @ Magnum Opus Partners.

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