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Marketing ‘growth champions’ are in the minority

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Marketing organizations that lead overall strategic direction and product innovation can help contribute to improved corporate performance, but these organizations are in the minority, according to a report released last month by the Association of National Advertisers and consulting firm Booz Allen Hamilton.

The report was based on an online survey of more than 2,000 marketing executives, who were asked about the structure, capabilities and decision-making processes of the marketing departments at their organizations.

The report defined six categories of marketing organizations. The leading category, “growth champions,” have the following characteristics: They hold primary authority over large strategic investments, they lead product innovation activities and they spearhead growth initiatives with their company's CEO.

Only 9% of companies in the study fell into the “growth champion” category.

Companies in this category are 20% more likely to exhibit superior revenue growth and profitability than those in the other five categories, the survey found.

John Carrington, CMO of GE Plastics, a $7 billion business unit of GE, said his marketing organization clearly meets the metrics of a “growth champion.”

“From our perspective, the growth agenda is the CEO's No. 1 objective, and I develop that completely with Charlene [Begley, president-CEO of GE Plastics],” Carrington said.

GE Plastics, as well as other GE businesses, develops a “growth playbook” that provides a three-year strategic vision of the business. It is primarily led by marketing, Carrington said.

GE Plastics' CMO is responsible for approving long-term strategic investments through an executive group called the growth initiatives board, which Carrington started in early 2005.

The growth initiatives board, which includes the CMO, technology head and VP-product development, meets monthly to make decisions about the strategic direction of various marketing programs.

“We make decisions around the investments going forward,” Carrington said. “Then we rank all programs on an annual basis, based on a variety of metrics, and decide which ones to invest in.”

In addition, the growth initiatives board hears from regional VPs about marketing projects they're involved in. “We also have marketers come in and tell us why they're killing a program,” Carrington said. “Coming out of this, you have funding and resources committed, which is really the only way an idea is moved from assessment into validation.”

Keith Pigues, VP-marketing at CEMEX U.S. Operations, a global cement and building products company, said, “The ANA/Booz Allen study results are right on the mark.”

Pigues, who has led marketing at companies including Honeywell International, Automatic Data Processing and RR Donnelley, said he has seen a shift in the role of marketing from what he calls “little m” marketing to “big m” marketing.

In “little m” marketing organizations, Pigues said, the major responsibilities include advertising, promotions, sales support and campaign management. In “big m” marketing organizations, “the major emphasis and responsibilities of marketing are focused squarely on driving sustainable profitable revenue growth for the company,” he said.

Pigues said the marketing model at CEMEX U.S. Operations is similar to the “growth champion” model in the ANA study. “The primary focus of marketing is growth leadership for new market development with a profit center orientation,” he said.

In addition, marketing is responsible for more traditional areas, such as branding, industry marketing and customer marketing to support sales.

Rich Carvill, marketing manager of the industrial power transmission group at Gates Corp., agreed that effective marketers need to do more than just advertise and promote the company's products. “For a marketer to be an effective growth champion, we must be involved in the company's growth strategy planning from the outset,” he said.

Carvill said that when Gates launches new products, the marketing group is involved in answering the following questions: Is the product unique and innovative in the marketplace; is there a market demand; and does the company have a sustainable competitive advantage?

Following are some other results from the ANA survey:

  • Seventy-five percent of growth champions indicated they help the CEO develop the strategic growth agenda, compared with an average 38% of respondents in the other categories.
  • Eighty-one percent of growth champions preside over product innovation and business development, compared with an average 10% of marketers in the other categories.

The other five categories are “marketing masters” (38%), “senior counselors” (17%), “best practices advisers” (9%), “brand builders” (12%) and “service providers” (15%).

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