The Asian business landscape requires a different path for Asian companies and their boardrooms to be successful. Companies need to achieve a fine balance between low-cost production (competitiveness), constant innovation (differentiation), and enhanced customer satisfaction (value capture through branding).
Brands are not only, if sometimes at all, built from traditional advertising and promotions, but are rather built using a comprehensive range of corporate-wide activities delivered by people throughout the organization. Therefore, the crucial balance between brand promise and brand delivery has implications for all company functions and it becomes a managerial responsibility reaching far beyond marketing and communications departments.
Therefore, branding can no longer be delegated to the mid-level marketing function in the typical Asian organization. Instead, the Asian boardrooms and the CEO must take charge of the brand strategy, lead the brand development, manage its implementation and be fully involved in performance tracking and benchmarking.
The marketing and communications departments do not have managerial authority over the other company functions. For example, if the service level of the front staff of an airline is sliding according to surveys, it could quickly deteriorate the brand promise. But the marketing department will find it difficult to exercise authority to implement any necessary actions. They will only be able to influence the process. The internal political complications could be significant and the time-to-action can be relatively slow.
This example shows the importance of boardroom and corporate management responsibilities, and carries ultimate weight when being led by the CEO. The CEO and the CFO have until now been the typical inseparable, influential, and strongly coordinated twins running the company.
Therefore, branding should be represented in the boardroom by a person, the Chief Marketing Officer (CMO), responsible for branding so that he/she is able to participate equally with corporate executives like the CEO and CFO.
The CMO is an emerging trend in Western boardrooms where the marketing function is increasingly represented at C-level along with the CEO and CFO to provide a better representation for marketing and branding at the boardroom level.
Think about the following example of marketing’s role within the organization: When Asian companies disclose financial results and forecasts for the future to analysts and media, the spokespersons are usually the CEO and even more often the CFO. But what are the drivers of the future revenues?
One of the three key drivers for Asian companies going ahead is the ability to capture value by closely linking it to customer satisfaction and the price premium the brand is able to command.
The CFO is rarely a savvy marketer and lacks detailed knowledge of or any in-depth experience in branding. Instead, a senior and strategic marketing person, the Chief Marketing Officer, would be most appropriate and capable to address that crucial aspect of the corporations’ future objectives and how it helps driving profitability and financial value. This highlights the need to train the marketing staff or to hire external marketing talent to ensure branding skill-sets and experiences are sufficient on a strategic level.
Naturally, there is a limit to the direct involvement and supervision of the CEO in managing the marketing and branding activities. To ensure his continuous involvement in branding despite his other responsibilities, the CEO must be backed by a strong brand management team of senior contributors, who can facilitate continuous development and integration of the brand strategy. The Chief Marketing Officer can serve as the crucial (and often missing) link in the Asian boardroom. It enables the corporate management to directly design and control the brand strategy, and also to allocate the required resources to successfully implement the strategies.
The company can also gain significant advantages by creating a Brand Board chaired by the CEO and led by the Chief Marketing Officer. This creates the missing connection between the boardroom (corporate management) and the marketing function (implementation of brand strategy). The key people from all relevant departments should be represented in the Brand Board including staff from the marketing department. This ensures that the brand strategy is commonly shared and understood throughout the organization, and enables everyone to take ownership of it. Many successful global brands follow this structure.
This proposed reorganization is very beneficial for the marketing profession in Asia as a whole and will help Asian brand marketers build a reputation of being financially responsible. Shareholders and analysts are pushing companies and boardrooms to deliver on revenue and profit objectives. Therefore, the CEO must ensure that marketing expenditures deliver a satisfactory return and help drive the bottom line.