It’s been more than 10 years since McGovern,Court,Quelch & Crawford wrote an article called Bringing Customers into the Boardroom https://hbr.org/2004/11/bringing-customers-into-the-boardroom. As a founder of the Fondation des Administrateurs, a Belgian association advocating the professionalization of Board of Directors, and as the holder of the marketing Chair at the University of Brussels, Solvay School of Economics and Management, I was doubly interested by the topic.
If we look at the situation today, i’m afraid that board discussions continue to focus more on investments, corporate control, company performance and the like… Strategic decisions are the prerogative of Board of Directors and yet, marketing is still believed by some board members to be some kind of operational function, guided by the outdated 4p’s model. For those directors, strategic marketing decisions (choosing markets to be in, positioning adequate value propositions, creating value through the portfolio of businesses,…) are away from their immediate worries. It’s pitiful and dangerous in a VUCA type of business environment.
I advocate an equitable distribution of the subjects to be treated in Boards. Strategic marketing issues are as important as financial, social or nominations ones. Don’t misunderstand me, I’m not talking about a Board discussing on a new corporate logo or giving intuitive advice on an advertising campaign ! I’ve seen so many of these meetings turning out to be a « discussion de café du commerce ». I’m talking about (1) being informed on key market trends, (2) reviewing the company positions on strategic market segments, (3) understanding competitive dynamics, etc. The key is to avoid the so called Kodak syndrome and keep alert and agile on the strategic fields. http://oser-performer.com/2015/08/22/oser-performer-50-how-could-your-company-avoid-the-kodak-syndrome/
To be practical, I recommend here after a number of measures that a Board Chairman could take to bring the customer back into the boardroom. After all, marketing is all about delivering value to customers to generate so much satisfaction that they want to be oyal to you.
- Invite real customers at a board meeting at least once a year
As Hans Hickler put it in a 2015 excellent article in the Huftington Post,« Adding customer discussions to the Board agenda is an important part of a broader customer engagement strategy with the board, including the regular review of customer survey results, engagement metrics, segmentation reviews. But nothing beats engaging directly with the customer ! » http://www.huffingtonpost.com/hans-hickler/invite-your-customer-into_b_6693278.html
- Create a strategic marketing committee
Besides the usual audit, strategy and nominations committees, etc. we should have one caring for the follow up of the marketing function. Linked with the strategy committee (I recommend 2 members attending both the strategy and the strategic marketing committees), it should watch and monitor closely marketing plans and KPI’s and, as importantly, signal changing market trends quickly enough to the board. Remember that IBM took nearly two years to realize that Apple was more than some kids playing in a garage !
- Include marketing performance KPI’s in the Board dashboard
Financial reporting is about past and present. Marketing reporting is about the future. KPI’s like customer satisfaction index, customer churn rates (https://www.ngdata.com/what-is-customer-churn/) and other relevant metrics may be signals of future performance. But, more than that « boards need a thorough understanding of how their companies are meeting customers’ needs and how their marketing strategies support those efforts… https://hbr.org/2004/11/bringing-customers-into-the-boardroom. Board members should be critical and demanding as to the why’s and how’s and challege non specific answers.
- Be sure to have marketing specialists on the board
Marketing is as technical as IT, supply chain or accounting. Yet a number of people, even professional managers, still believe it’s intuitive and within the reach of all. Actually, it’s not ! Especially today ! With the emergence of new analytical tools and new metrics, with the development of 360° multimedia marcom and with the advent of sophisticated marketing intelligence systems, marketing is now technically tough to understand. So boards should not be the hostage of a management team informing them about things they don’t understand with a new obscure jargon. Boards should have seats for marketing professionals.
- Have a regular evaluation of the marketing talents
Marketing today includes classical and progressive methods. The war for talents is real today and especially for marketing functions. The CMO role is way different from what it was 10 years ago. We need teams who ally analytical hard skills with softer creative skills. We need passion and ethics. We need a deep understanding of emerging trends and proactivity to take opportunity of them in the most agile way. It’s hard to find marketing executives who can manage teams like that ! Not only should we find them but we also need to keep them long enough so they can really influence the business. Boards should consider this issue as being of the highest priority.
Marketing and customer matters have been considered by Boards as secundary isues for too long. Today, in a volatile, uncertain, complex and ambiguous business environment, no company can consider the future with « sleepy confidence ».
Marketing is the engine of innovation. Its strategic role is to ensure the long term sustainabilty of revenues and corporate reputation. That’s why Boards need to get involved !
Be inspired !