Marketing Strategy: Give us CEOs Who Know How to Brand

'Branding Iron' Authors Urge Smart CEOs Not to Obsess About Expense

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When Ford announced Alan Mulally as its new CEO, analysts and shareholders alike asked, "Is he the right person?" After all, Mr. Mulally worked his way up the corporate greased flagpole at Boeing with aircraft, not at Ford with cars and trucks. He is an automotive outsider.

Depending upon the pundit's point of view, his distance from the car business was hailed as good or bad, important or unimportant. That Mr. Mulally was an engineer with a business degree usually landed in the positive column. That's because conventional wisdom, which we say is too often an oxymoron, demands that Ford get its expenses in line and then develop and build products the marketplace can't live without.

Mr. Mulally proved he was a cost cutter at Boeing where his product-person credentials stem from the creation of Boeing's 787 "Dreamliner."

Well and good. But can he do that in a consumer-driven market? Ford has a five-year track record of losing market share. It has too many brands, too much overlap and some brands of questionable value. Lincoln and Mercury to name two. Mr. Mulally faces hard choices. We wish him every success.

But let's address another, larger question: What are the right credentials for a CEO? Not for all time, but for these times. Might there just be room in the car business for a CEO from the marketing world? About one-fourth of the S&P top 100 CEOs have a strong marketing background. One-half of those CEOs are equally divided between finance and operations. So a marketing CEO at a car company is hardly heresy.

Not that automotive history agrees. Car companies have had a few instinctive marketers, such as Lee Iacocca, at their controls, but virtually all the industry's CEOs, past and present, have been either engineers or finance executives. Given the shape the domestic car companies are in, would it be altogether obtuse to suggest giving a marketer a chance?

Big business has always been concerned with the expense side of the equation, and in our competitive world that is crucial. In a world where supply and demand more or less line up, the keys to success are designing products, manufacturing products and not running out of money.

Taking cost out, or concentrating on the expense side of the profit equation, is easy. By applying yourself, you can cut 100% of your expenses, but the result of that is apparent even to a stock analyst.

Concentrating successfully on the revenue side of the profit equation-getting customers to pick you from among their ever-expanding choices-is the tough part. Any executive with a pulse can cut expenses; only the exceptional ones can increase revenue.

why prize old skills?

Why then does business continue to lean on executives with engineering, manufacturing and finance backgrounds? Perhaps because their boards are populated with people from these fields who prize the old skills over what is needed today.

That's fine if you live in a world in which demand exceeds supply. But we don't; that era is history.

We live in a world where supply exceeds demand-usually by a lot. The car business alone speaks of an annual 24 million units of excess capacity. The U.S. is the largest car market and its annual new-vehicle sales are only 17 million.

The case can be made for a different set of credentials for a CEO. Why? Fiduciary responsibility now starts with revenue. In our oversupplied environment, the first priority of a CEO is to generate revenue. This means creating brands that attract more customers.

The business community has yet to agree on a definition of branding. We have. We believe great brands are a promise wrapped in an experience. And the company promise must be made by everyone concerned-starting with the CEO.

Great branding permeates everything a company does. It is not something that the marketing department tacks on at the end of the assembly line.

The brand must first stand for something to even get noticed. Me-too copycats fade immediately into the noise of our crowded marketplace. Standing for something is your promise, and your promise must be delivered in your product, your retail experience, and your culture before anyone will believe it.

If the game were static or slow-moving, a CEO might possibly master all of this without a real feel for the market. Overnight innovation, new competitors parachuting in from out of nowhere and rapidly changing consumer attitudes rule the market. Staying ahead of the herd takes vision fueled by market feel and intuition, traits honed by the consumer-oriented professions.

What does this mean to the ambitious CMO? Opportunity may be on the doorstep, but CMOs must overcome some long-held stereotyping. The language must change from sales and budgets to profit and loss.

The key to the continual upgrading of the image of consumer-oriented functions is the ability to generate new business where others don't quite see it. This is what the best and brightest business folks have always done.

An understanding of their challenges in a changed business climate should lead companies to examine sales, marketing, advertising and retail executives-or at the very least, executives who have shown that they can reverse a company's slide-during their next CEO search.

CEOs without these qualifications will continue to work the expense side of the street while being bushwhacked in the marketplace by those who know how to win customers-which is the whole reason for branding.
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