Focusing on providing solutions to customer needs has never been more important to business success than it is today, given the digital environment.
This means that Marketing, as a function, must play a more prominent role in the boardroom when it comes to making key decisions, however there seems to still be an under-representation of Marketing,
Why are other functions, such as Finance and Legal still the only ones making big-picture decisions, when now, more than ever, we need to be taking a more customer-facing approach?
It's time to adjust the perception and re-evaluating the importance of what Marketing brings to the Boardroom.
Marketing’s Contribution on a Board
There is an unfortunate, not to mention utterly baffling reality occurring in organisations today of all different sizes, scopes and industries: the under-appreciation of the function of Marketing as a significant and valuable force in conducting successful business. Instead of seeing Marketing as it should be, that is, a powerful engine of research, innovation, development and communication, the Boards often misjudge it as a pseudoscientific art that has little impact on their bottom line.
The Boardroom is where the overall business goals are introduced, discussed, reviewed and approved, and yet quite commonly, a Board Director with a background in the function that is the muscle power of developing corresponding strategies and tactics to achieve these very goals- i.e.: Marketing- is completely absent. Board Directors with the typical Financial, Operational or Legal backgrounds are not familiar with and therefore do not appreciate such vital activities as communicating directly with customers, developing brand image campaigns or conducting research on customer behaviour in order to determine how best to position the product- a Marketing professional however is. Whilst Financial, Operational and Legal backgrounds are strong contributors on the Board, it is time to emphasise the missing gap: the strategy driving Marketing function. The root of the issue essentially boils down to an underlying misunderstanding and undervaluation of what a Marketing Board Director can contribute.
The Gap Of Undervaluation
The article, A Seat At The Boardroom Table, mentions that Robert Colquhoun, the Managing Director of Alexander Colquhoun & Son, admitted he referred to Marketing as “practitioners of the dark arts.” My own father, Neil Melotti, CFO of Grace Worldwide, referred to Marketing as “The ministry of good times and novel contributions.”
In order for a Board to see the value of a Director with a Marketing perspective, the value of Marketing’s contribution to organisational success must be correctly demonstrated. The time has essentially come to foster a culture that looks beyond the tainted reputation of gimmicks, give-aways, cheesy jingles and pretty pictures that Marketing has unfortunately gained throughout the years, and instead rebuild a solid, respected reputation for the function as an arsenal of powerful, driving solutions for the ultimate benefit of the organisation; only then will the Board Members believe that Marketing is an asset in the Boardroom.
Marketing’s negative reputation is compounded by the fact that, unlike other functions that are always on a Board, such as Legal Counsel and Finance, a Marketing Professional can often be seen as a practiser of pseudoscience or an ‘ace-in-the-hole’ when the sales team need that little extra support to reach a set target. That’s because Marketing is a function that isn’t always accurately measureable or rational on paper- both at strategy and result levels. It’s very difficult to justify an expensive communication campaign to raise brand awareness in a target market that is comprised of unique people. Scott Stratten describes it perfectly in his book, UnMarketing.
He says it’s not solely ROI (Return On Investment), an accurate and commonly used measure, that drives business success; it’s more ROR (Return On Relationships) which Marketing cultivates that produces the greatest outcome; and that is really hard to calculate tangibly. Therefore, the buck stops with Marketing to overcome this ‘gap of undervaluation’: the Board won’t decide to include and appreciate Marketing with no evidence- it must be proven and justified as an asset, both in and outside of the Boardroom.
Marketing’s role is to externally communicate to unpredictable Human Beings; you cannot plug in lines of accurate code with people to have them all behave in a way profitable to a business; some of the segment will reject the message, others will love it, more still will misinterpret the campaign and others will be too busy to even notice. There is no perfect solution to a problem when working with people, whether they are running organisations or individual consumers, hence the misconception and resulting undervaluation of the role of Marketing in an organisation.
Marketing: Helping Guide The Submarine
Therefore, it’s time to dispel these misconceptions and take Marketing off the side-line. Marketing needs to be seen not as an offshoot of support to the Operations/Sales teams, but as a strategic partner worthy of valuable contribution in the Boardroom. After all, due to the very nature of how Marketing works, it is the function with the finger on the pulse of the industry and its customers: how can a Boardroom steer an organisation to greater heights whilst such an informed contributor is not present?
Consider this analogy: It’s like a submarine (the organisation) without a periscope or sonar (Marketing), instead, relying on mathematical instruments (Finance) and a previously drawn map (Operations) alone to guide the course and hoping it reaches the destination successfully (Strategic Business Goals). What if the water current changes (market trends)? What if the depth is unpredicted (market demographics)? How can you keep an eye on other submarines (competitors) to ensure no collisions or direct attacks? Marketing cannot be on the beach, with a two-way radio to the Board Member crew; it needs to be there playing its role actively together with the rest of the crew.
The world’s industries are changing at an exponentially increasing rate and organisations cannot afford to wait to finally come to the realisation that the role and importance of Marketing has never been greater. Marketing is the function that is researching the shifting trends and fluctuating demographics of an organisation’s customers in order to predict and respond appropriately for the benefit of the organisation. How can an organisation rely on a Board with such a vital contributor is absent?
Placing The Correct Value On Marketing: Contribution and Results
As outlined above, Marketing revolves around creating and monitoring the essential flow of information to and from external sources and the organisation, and in doing so, it defines, locates and retains customers for financial gain and organisational growth. The value of Marketing to the Boardroom therefore equates to both its initial tactical contribution at the goals and objective setting stage, and the measureable results and outcomes of its efforts.
To a Board planning and developing future goals and targets, Marketing’s value lies both in:
Referring back to the submarine analogy, a Board setting goals must appreciate and be aware of the current and predicted future market landscape. Marketing, as a function, should be a major asset here as their efforts lie directly in contact with the market itself. If a competitor is having a particularly strong effect on the market, the major consumers are becoming more price-inelastic, or a recent breakthrough has made certain products redundant, Marketing can not only share this vital information with the Board, it can explain what impacts this will have on the current organisational objectives and suggest multiple options and tactical strategies to circumnavigate detrimental hurdles, as well as appropriately pursue advantageous and innovative opportunities. This is the benefit of inviting Marketing to participate in the Boardroom: such critical information should not be discounted or dismissed entirely. Such an oversight is an unnecessary detriment to organisational success.
Why would an organisation, therefore, think to exclude Marketing on the Board? Are the Board are willing to forego such advantages as already described above?
Marketing’s Reciprocal Obligation
Expectantly, it is a two-way street for Marketing to be included in the Boardroom. A Board with a Marketing member can assess and evaluate the Marketing concepts and strategy to ensure that the function has fully appreciated the other functions’ roles, responsibilities and perspectives. The Board can also actively interpret and ensure that the Marketing KPI’s align with budget, organisational and financial objectives, essentially removing the ‘practising of the dark arts’ perception: by inviting Marketing to the Boardroom, the organisation shines a large light over Marketing’s efforts, which in effect, will assist with dispelling the pseudoscience misrepresentation.
Marketing’s Outcomes and Results
Pinning down Marketing’s often intangible outcomes and results can be a difficult task- one that significantly adds to the under-appreciation of the function itself. However, it isn’t as shrouded as it may seem to other Board members, should a Marketing Board member be included.
Every function’s responsibility essentially lies with their direct impact and performance success on the organisation’s business plan and marketing is no exception to this. All functions are tasked with their objectives to make their appropriate contribution to the organisation’s goals and, in Marketing’s case, that is tangible and intangible corporate value.
Tangible value is the most solid due to the hard facts. In reality, straight hard figures reverberate the most in the Boardroom setting and include metrics such as direct customer responses to advertising, revenue growth, statistics from traceable online advertising, and figures from such activities as Product Familiarisation/Loyalty Programs.
However this is scratching the surface: as mentioned, it can be the intangible Return On Relationship (ROR) results that demonstrate Marketing’s effectiveness, however measuring these can be difficult. This in mind, a Boardroom can invite Marketing and focus on the value leveraged from the concept of marketing assets.
Marketing Assets are the leverageable value from intangible marketing elements, such as profitable good-will, reputable brand names, successful brand image, deep brand awareness penetration, the discovery of a profitable niche, a compelling advertising campaign, contributing marketing intelligence and so on. The issue here is that, often a Board vaguely accepts the value of these Marketing Assets, but fails to truly appreciate the scope of their impacts on organisational success and profitability. You cannot put a yearly mathematical depreciation formula on a brand name, for example. Therefore, by including Marketing in the Boardroom, the vagueness can be removed by an explanation of how to assign correct metrics to such Assets in order to demonstrate the impact they have.
These metrics are best assessed in a dynamic way by comparing continual past and future results of each Marketing Asset each time the Board meets. By viewing the value of each asset over several periods, unusual outliers and unexpected circumstances ‘smooth out’ and true value can be calculated. For example, Marketing can provide intelligence about competitors in the market through their research. This can be valued by the Board based on how such ongoing knowledge not only allowed the organisation to be better prepared over the last few quarters, but how well the developed Marketing Strategies assessed such threats and turned them into opportunities.
Another example is the value and contribution of a Brand. Brand awareness and perception are difficult to mathematically assess, however dynamically comparing unprompted and prompted consumer response to a brand, as well as its relevance in the market will indicate the potential earning capability it could generate. For example, Apple as a technology brand was seen as a technological leader and innovator in the market from around 2010 to 2012, and therefore, Apple’s Board, with a strong appreciation of Marketing, could accurately assess high profitable return to be leveraged off this good-will. However in 2013, to their detriment, Apple’s Board could view the Brand was weakening in the market now due to aggressive competitors and a far less innovative brand offering. The Late and Former CEO of Apple, Steve Jobs, was always a strong advocator of the value of Marketing at Board level toward organisational success.
The Apple example provides a good basis for the argument. The Board can assess past Marketing and organisational efforts that strengthened the Brand in previous periods (2010-2012) and investigate why a change has occurred in more recent periods. The Board, with Marketing present, would most likely determine that there was a distinct and direct correlation between the decline in their Brand’s strength and their falling market share, due to their recent Apple products being far less ground-breaking and their marketing campaigns far less unique and consistent with Apple’s funky, fresh image. Therefore, the next time the Board meets, the role of Marketing can be appropriately valued and more aggressively targeted to boost the next period’s results. By including the Marketing function in the Apple Boardroom, the Executive Team are better equipped to appreciate the decline and re-evaluate the organisational goals and strategies to address the treats to the business.
Organisational Synergy: A More Complete Boardroom
A successful Boardroom contributes best when it correctly appreciates all of a business’ separate systems: this should definitely include Marketing, not because it is a budget-draining misunderstood ‘pseudoscience’ of unproved, unpredictable and immeasurable efforts, but a powerful contributor and resource. A Boardroom with a Marketing member that understands this will be better equipped to value, manage and utilise the function for the extremely valuable contributions it can produce.
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 Lindhe, J. A Seat At The Boardroom Table. Business Review Weekly. August 1-7, 2013. Pg 47-49.
 Stratten, S. (2012) UnMarketing. New Jersey: John Wiley & Sons, Inc.
 Australian Marketing Institute. Deloitte. Marketing’s role in the boardroom- An evaluation framework for boards and directors. July 2013. Page 10.
 Marketing Mag. Corporate Reputation Index: Apple falls, Toyota Rises and banks bite back. 22 April 2013. <http://www.marketingmag.com.au/news/corporate-reputation-index-apple-falls-toyota-rises-and-the-banks-bite-back-39289/#.UhwqM222Vpg> Accessed 24/08/2013.
 Reynolds, G. Steve Jobs on marketing and identifying your core values. October, 2011. <http://www.presentationzen.com/presentationzen/2011/10/steve-jobs-on-values-and-identifying-your-core.html> Accessed 27/8/2013.