Panel: What it takes for marketers to win the hearts and minds of the boardroom

Former CMOs and now experience board and company leaders share their insights into the journey from marketing to board and what it takes to think like a business chief

From left: CMO's Nadia Cameron, Michele Teague, Georgie Williams, Nick Baker and Michele Phillips
From left: CMO's Nadia Cameron, Michele Teague, Georgie Williams, Nick Baker and Michele Phillips

Rapid investment into digital and technology, along with the need for growth, are seeing more marketers stepping into Australian boardrooms. But unless more of the marketing fraternity get onto the c-suite, do a better job of understanding the balance sheet and firmly grasp risk and governance, they’re going to struggle to gain a substantial foothold long-term.

That was the view of four former marketers and now board members and executive recruiters participating in a panel discussion on how marketers win the hearts and minds of the boardroom at the recent CMO Momentum conference in Sydney.

Former partner at executive recruitment firm, Johnson Partners, and one-time marketing leader at Nestle and Procter & Gamble, Michele Phillips, cited a growing number of briefs for directors with a marketing background. A key catalyst is digital technology and connectivity.

“There is a tsunami of investment boards are putting into technology and digital, and boards often don’t have the wisdom to ask the right questions or partner with the CEO appropriately on these,” she told attendees. “They appreciate the additional insight a marketer can bring in asking questions around cost, resource allocation, efficiency and organisational structures.

The second thing is directors are very interested in underlying growth, Philips said. “For a long time in Australia, things were fairly comfortable. But competition is very tough today,” she continued.

“Even organisations that have not been traditional ‘marketing’ organisations are realising they have to move their sales function from selling product to vertical industries, to selling to customer needs and segments.

“Marketers are great at that – they understand the customer mindset, how these needs can be translated back into operations and the business, and how you ought to segment a sales force or finance to deliver. Particularly in B2B companies, we’re seeing rising demand for marketers that can assist with the customer segmentation mindset.”

Former AustralianSuper CMO and now non-executive board director at Reece and Lifestyle Communities, as well as Sunsuper, Georgie Williams, agreed the recent Royal Commission into the Banking, Financial Services and Insurance industry highlighted how important it is for directors to delve deep into the culture and operational side of organisations. Both are key reasons for why marketers are a good choice to join boards today, she said.

And it’s something Williams herself has done during her time at Reece, spending two weeks every year on the trading floor learning everything from plumbing product names to how sales systems work on-screen, what happened when things went wrong with a customer, delivery processes and more.

“When I’m in the branch, understanding who the core customer is and what they’re looking for is something I can take straight back to the boardroom,” she said. “You also need to choose your boards very carefully to make sure you’re willing to do that work.”

Outdoria and GoSee Australia CEO and former Tourism Australia CMO, Nick Baker, is another who’s been gaining experience at a board level. He also believed culture needed to be a big emphasis for modern boards.  

“Without doubt, marketing has a massive role inside formulating the culture of businesses externally and internally,” he said. “With so much emphasis now on bringing in transparency, honesty and other softer but potent forms of messaging, they should at heart have a great understanding of how an organisation is working. Being able to surface those thoughts and cultural insights is key.”  

So where’s the problem?

The problem, particularly with a lot of financial sector businesses, is marketers are often not sitting at the top table or senior group executives.

“There will be someone above them servicing those things. I implore any big financial institutions when they make that decision to bring marketing to the top,” Baker said.  

The nature of the marketing remit plays a part too. “As marketers, part of my job is being a rebel. It’s to challenge the status quo and orthodoxy of current practices and to try and find edges,” he said.

“Sometime we do live to that edge. But if you live to the edge, you have to understand the centre really well to be able to have the freedom to explore that. As such, there’s a massive opportunity for marketers to be able to not only know what’s going on centrally, but to also find all the edges, which is where risk often hides.”

In the US, only 4 per cent of respondents to a US National Association of Company Directors survey saw marketing was important business experience to have. For former Kmart marketing chief and now non-executive board director of The Reject Shop, Michele Teague, it’s also worth noting fewer than one-third of publicly listed companies are consumer facing.

What’s more, if you’re not in the c-suite as a marketer, it’s a much bigger leap. In CMO’s recent State of the CMO survey, only two-thirds were found to be reporting to a CEO/managing director.

“If you’ve run a business or at least can prove you know how to sell stuff, and been within a group at c-suite level, you have a better chance,” Teague said.  

Alongside financial literacy and knowledge around technology, Baker cited the ability to keep learning as key.

“One of things about marketing in today’s world is you have to keep learning,” he said. “As you get older, a lot of people don’t do that. There is a famous quote: ‘The illiterate of the 21st century will not be those who can’t read and write, but those who cannot learn, unlearn and relearn [Alvin Toffler].”

Teague agreed the big mistake marketers make as they rise up the ranks is going in with functional specialism and letting accountants make judgment calls on the numbers.

“That’s the number one trap. Once you sit at the board table, to a degree you’re casting off your specialisation,” she said. “Everyone there has strengths and weaknesses, but you are legally accountable. If you do the AICD course, which everyone must do, they spend the first day scaring you about being a director because of all the trouble people have got into by not taking ownership.”

Williams saw the differentiator not just as P&L experience, but understanding the balance sheet and longer-term growth opportunities.

“As marketers, we do see the P&L all the time.  But that is short-term growth. As a board member, I’m looking for long-term, efficiency growth,” she commented. “So I need to understand the balance sheet. As marketers, we forget intrinsically we are building goodwill, and that’s on the balance sheet. You need to be able to prove the brand you’re building has true value across the balance sheet.

“The Royal Commission pulled this out in the way we’re remunerating short-term versus long term. If you’re a marketer and you understand the P&L, fantastic; but go and work out where the value is in the balance sheet.”

What’s more, panellists agreed there are still plenty of board directors who perceive marketing as either the colouring-in department, or the communications and advertising function.

“I’ve worked a lot of retail companies, so I know a lot about supply chain, back-end processes and sourcing,” Teague said. “The way I overcame that [perception] is by deliberately not engaging in any conversations around marketing. I pretend it’s not what I’m there to do and overemphasise the other things.

“In fact, we had a new lawyer join our board recently and she’s huge on brand, which I love. I let her go with that.”

In terms of the myth busting Williams has had to face, two of the companies she joined as a board member saw marketing as advertising, while one saw marketing as deeply involved in the development of what the organisation does.

“The difference is stark. In the latter company, I can come as a clear marketer as it’s all about efficiency; with the others there’s still a re-education process going on,” she explained.  

Philips also cited two different kinds of marketers: Passionate commercial marketers, and those passionate about communications who don’t want to engage in financials.

“Unfortunately, the dominant pool of board directors today grew up in environments where they’ve had more communication-oriented marketers and have a perception of marketers as not being financial literacy,” she said. 

Baker also put the onus on marketers to think about the language they employ, noting his own experience dealing with digital transformation at Tourism Australia made him realise the lack of knowledge at boardroom level.

“As marketers, we have our own language and it can be seen as prohibiting other people from engaging. It does push us on the outer sometimes,” he said.  

Winning over the board

So what can marketers do right now to better their chances of engaging with a board, as well as eventually joining one? Without doubt, it’s the financials, Teague said.

“If that means taking the CFO for coffee once a month and getting them to explain the P&L and balance sheet, then do it,” she advised.

Williams attributed her own career trajectory to being willing to explore other parts of the business as well as her industry.

“The amount of time I spend on the board looking at things within the business is about 40 per cent; for the things outside the business, whether it’s regulatory, inorganic growth, and so on, it’s 60 per cent,” she said. “If you don’t know all the regulations within your industry and company that aren’t in marketing, do that as well.

“I have spent a lot of time in my career working across different disciplines so I could add everything into my backpack before I did this… I spent a lot of time doing everything, from running P&L, to working with different teams, dealing with HR. I’ve been in superannuation, banking, investment banking, as well as core marketing, which was very helpful.”

Meanwhile, Baker suggested marketers look to startups as a way to kick off their board career.

“Senior marketers are heavily in demand by startups – the reason being many can’t afford senior marketers. The ability to cut your teeth in helping out startups is great. Most want to have good marketing knowledge and understand the customer, do the segmentation work and so on,” he concluded.

“And seek out something inside the business too. Maybe it’s something that doesn’t directly need you to be at the top level in finance, but gives you exposure and gets you understanding governance, risks and how boards are structured. Cut your teeth that way.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.      

 

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