Board of Directors Domain Diversity

Board of Directors Domain Diversity:

More Ideas & Fewer Spreadsheets

The following article was written by Andrew Stein, President of SteinVox, is a Chief Strategy, Marketing & Sales Operations Executive. This article was originally published on his blog on February 26, 2012. He is a champion of pervasive strategy through fearless marketing to drive sales. Andrew helps market-driven companies transform into market-driving category leaders.

Board diversity has been a hot topic lately. Women and racial balance in the Board Room have occupied much of the spotlight. What about domain and background diversity? There seem to be precious few people with Marketing backgrounds on boards. Greater Board bench-strength and focus on Marketing and Innovation will strengthen intrapreneurial ideas that generate new products and ideas for growth and offset the focus on spreadsheets to drive operational efficiencies on past legacy.

Ideas vs. Spreadsheets:

Why is getting more creativity on Boards important? Even if at the expense of lowering the fiscal focus of Boards today? The best way to answer that is to reiterate the obvious. You cannot budget-cut, or introduce operational-efficiencies to recover from a downturn. While important, the only true way to sustainably correct macro- or micro-economic issues is to innovate and grow out of them and thereby set a new course for recovery that evolves into a culture of prosperity.

Marketing is the one organizational and functional domain that is charged with understanding the customer, constant innovation, brand rationalization, product portfolio optimization, positioning and messaging, and generally closing the business loop. In a word, Marketing is the business sustainability force that looks to the future in terms that are outside the box of yesterday’s thinking. To be sure, I’m not referring to promotions and advertising, I’m referring to the classically trained marketers with depth and breadth of knowledge around creating, capturing, and sustaining value: The kind of leadership, experience and contribution that make effective Marketers into CMOs and CEOs. The kind of Marketers that understand Finance, Operations, and Business Administration as well as the CFO, but are prolific in generating forward-thinking ideas. We need more of these types on corporate boards.

Board Bench-background Today:

How do we look at board make-up? A longer research project is in order, for sure; but the observable evidence is pretty startling. Consider that if you look up “positions that make up a board of directors”, you will find information on the operational positions of Board Chair (Chairman), Vice Chair, Secretary, Treasurer, and an abundance of Committee Heads, and so on. These are operational roles focused on the board operation itself.

Future Board Make-up:

What about slicing the board by education, background and real domain experience in terms of Marketing, Sales, Engineering, Customer Service, Information Technology, Human Resources, Operations, Finance and Accounting? I would postulate that it’s rare to find a board member search that approaches the objective by looking first for the education, background and experience to ensure that a constant flow of ideas around the business functions in an organization are present in the board room.

Let’s look at General Motors for some anecdotal analysis that should make you scratch your head. GM, an American car manufacturing icon, has 12 board members today. Backgrounds are in engineering, finance or science, either by education or experience. Not one board member’s bio hints of Innovation-rich Marketing (except perhaps for the Coca Cola executive but Coke are a brand company, not generally known for cycles of innovation of the type an annual automotive product line requires). Moreover, the committees on the GM board include: Audit, Directors & Corporate Governance, Executive Compensation, Finance and Risk, and Public Policy. These are similar committee focuses that many companies have.

Where Is the Board Innovation Committee?

What I am suggesting is that Boards need to have an Innovation Committee. And, for that matter, a Human Resources Committee, Marketing Committee, and perhaps other committees to provide Executive Leadership with guidance and even directives.

Could it be the case that the lack of these kinds of committees partially contributed to GM’s difficult labor situation during the recovery? What about the out-of-control brand proliferation? How could the prior Board of Directors have not seen that problem? How could they have let it continue for decades? Compare this to how aggressive companies like Unilever and Procter and Gamble rationalize, prune, and consolidate their brand and product portfolios in a constant effort to be responsive to both the organization and to the market. Why wasn’t there a Super-CMO?

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