Time to bury the hatchet

Simms Jane
Автор: Simms Jane
Companies need to stop arguing over which function is more important and start encouraging the finance and marketing departments to work closer and more effectively

A brand new year and yet another survey about the relationship between marketing and finance. The survey conducted among more than 15,000 business professionals in 17 countries by marketing consultancy International Marketing Partners (IMP) and market research company GMI, found that the world’s fastest-growing economies now consider marketing to be a more important discipline than finance.

Business professionals in Russia, Germany, China and Japan are the biggest advocates of marketing, with more than 70% of Japanese respondents favouring marketing over finance. In the UK and US, however, 60% and 56% respectively, believe in the supremacy of finance. The highest level of support for finance comes from India, where 69% of respondents believe it is the more useful discipline.

Women are marginally more favourably disposed than men to marketing, while older people believe finance trumps marketing. Sales people come down on marketing’s side, while business owners favour finance. Overall, ten out of the 17 countries polled believed in the superiority of finance over marketing

Surprisingly, business folk in the US come down on the side of finance rather than marketing, given the fact that marketers across the pond hold far greater sway and more board positions and are more likely to become chief executive than they are in the UK. It is no coincidence that US organisations are so customer-orientated.

Ironically, one explanation for the more exalted status of marketing in the US is the broader role of the CFO, where they are more likely to have an MBA than a pure accounting qualification, and frequently act as the right hand to the CEO.

Dispelling the stereotype

The more finance and marketing evolve beyond the traditional caricatures of bean counting and advertising respectively, the more effective and productive the working relationship becomes, says Neal Kissel, a managing partner at strategy and management consultancy Marakon Associates.

“Arguing about whether marketing or finance is most important merely serves to perpetuate the stereotypes and the hostility,” he says. “Clearly, they are equally important, and the focus of debate needs to switch to how to get them working together more effectively. The more finance evolves into a function that shapes strategy and architects change for the CEO, the more marketing can dovetail with that. Likewise, the more strategic marketers become, the more valuable the role finance can play.”

Clear remit

Many marketing departments have a very clear remit to deliver sustainable and profitable growth, which is a far broader and more sophisticated role than the stereotypes would suggest. And some companies are both customer focused and financially orientated.

Many organisations haven’t progressed that far, though. Robert Shaw, director of the Value-Based Marketing Forum and visiting professor at Cranfield School of Management, argues that “the meat grinder of the planning and budgeting process” distracts boards from the real business of running the company. Boards, he says, are frequently too far removed from the front line to understand what marketing does, and marketing, instead of explaining itself, focuses on securing as big a budget as possible in the expectation that it will be slashed at a later date.

The operating and financial review (OFR) would have forced boards to abandon this sort of horse trading in favour of more sophisticated and rigorous attempts to link budgets to strategy and encourage a closer working relationship between marketing and finance, argues Shaw. But now that the OFR is no longer a mandatory requirement, he wonders how many boards will wade in and tackle marketing.

“I am increasingly approached by finance directors to help them ‘sort out’ marketing. They typically say they don’t know if marketing is well run in their organisation or whether their marketers are any good,” he says.

However, this new interest by FDs in marketing augurs well. Marketing generates organic growth, and Marakon’s research found that companies in the top quartile of organic growth are 13 times more likely to be in the top quartile of shareholder returns than their low-growth counterparts. As such, FDs need to understand it better, and Kissell believes finance has a real opportunity in many companies to add value to marketing. “That involves a change in mindset from the ‘report-back-to-me-the-return-on-investment’ approach to ‘what needs to happen for the marketing investment to pay back?’” he says.

Critically, finance has to pay more attention to customer value, not just shareholder value. “Finance has to worry more about whether the company is getting more customers to buy more often at higher prices and lower cost. It is customers who deliver financial results.”

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