Satisfaction guaranteed

Imagine a group of people. Imagine a team in the company. Imagine the team includes top-management and shareholders.

This is not a fairy tale.

Let’s recall what Handy (1992) suggested to be the factors of group effectiveness. We have the Givens: the group’s members, the group’s task, and the group’s environment. The effectiveness of the group has some intervening factors like group motivation, processes and procedures, and leadership style. And finally we have the following as the outcomes: productivity and group satisfaction.

I suggest we consider the satisfaction of the shareholders at first, right?

They are the ones who care about their shares’ value increase the most.

As a Senior Marketing Manager, or Chief Marketing Officer, whatever you like, I can tell that there is a huge step or efforts to be done before those shareholders could be at least satisfied.

Let’s avoid any questions like “why?”

I would like to give some points and those would be mostly connected to marketing as you can guess.

There is a core of the problem of unsatisfied shareholders. It consists of at least five questions you can assess in your company.

1. Is there an understanding between CEO and CMO (or Marketing Manager, Marketing Director, whatsoever)?

Let’s use the same Handy’s approach to assess CEO’s satisfaction.

First of all, there is a significant misunderstanding of what marketing is. CEOs can come to the company from different sectors of business and from different positions (like CFOs, CMOs, etc), but there is only one question if CEO is professional enough to understand and act according to the role of marketing that is to explore and define markets, to understand the needs of the needs within the segments of these markets, and only then to create the strategies to meet those needs? (So, the marketing tasks, processes and procedures could be significantly misunderstood).

Secondly, there is a widespread thought that marketing creates expenses for the company, but it does not necessarily create the increase in shareholder value. (So, the link between marketing process and corporate profits is usually unseen).

And coming to the third point it is pretty usual (according to European surveys) that if CEO meets the first two criteria, the question how to make marketing accountable and measurable is at his/her wit’s end. (So the marketing productivity in terms of the link to the corporate results is not calculated mostly).

Let’s continue and use the same approach as for the CMO satisfaction.

First of all, we could definitely copy and paste all of those three points above. Don’t you (CMOs) think?

And secondly, again if CMO meets all of those three criteria he/she usually is not gaining trust from CEO to have an access to exact corporate financial data or even to exact corporate goals (which are to be put down to Earth by CMO by formulating the strategies how to reach them).

You can tell that it is like a closed circle.

CEOs and CMOs should definitely break it by overcoming the “problems“ stated above and by creating a real effective team.

2. Communication gaps

The link between the Board of Directors or shareholders to CEO is evident. CEO is in charge of setting the corporate goals, but the way of communication between CEO and CMO can be so weak that CMO is not “receiving” the exact goals (especially if CMO is not in the top management line in the company).

Thus for some reasons we could have a corrupted flow of information between the shareholder and CMO.

3. Marketing Strategies are let’s say “weak”

This problem of weak marketing strategies is a whole responsibility of the management to hire a qualified CMO to be able to produce effective and measurable strategies and (working with the agencies) to come up with efficient tactics to realize it (in terms of the budget and time).

4. The background that related to the market situation of the company.

I am not afraid to be totally general and there is huge evidence all around the world that the markets are a) mature in demand; b) falling under the globalization; c) experiencing the enormous power of consumers.

There is a bunch of the articles concerning the market dynamics.

It is just a question if we should be proactive or reactive in our decisions and strategies.

There is a shift in understanding of the marketing importance.

What is the nature of that shift you ask? Meaning, marketing departments were usually very busy with promotions, down to t-shirts and promoters on the streets, or developing web sites and brochures.

And now we are talking about the financial aspect and the matters of creating a shareholder value out of marketing activities. The budgets are growing, the need for effectiveness as well. And there are the above reasons for that.

5. The understanding of the common aim.

CEO, CMO, CFO and others are hired for the same goal: to create and increase shareholder value.

CMO should be very professional to be accountable, measurable, creative, and strategic enough to understand and create marketing system in the company to achieve that common goal.

CEO should trust and measure CMO performance in terms of the risks associated with the proposed marketing strategy and how it will contribute to the shareholder value increase.

That is the only thing should matter.

This is a pretty idealistic situation to come up with the solution to every “problem” stated above, but it is of a great confidence of me that it can bring “Satisfaction guaranteed” result to shareholders, CEO and CMO, and thus the whole company.

P.S. I would greatly appreciate any comments concerning this article. Please, be in touch by dim4iks@gmail.com