By David Bicknell
It’s a sign of the times that by 2017, according to the Gartner research group, organisations’ chief marketing officers will be spending more on IT than the CIO. It is departments such as marketing that are helping drive consumerisation within the organisation with healthy purchases of tablet computers – usually iPads – outside the remit of the IT department.
There are good reasons for that. As this article in Ad Age points out, data was once ‘the domain of tech geeks and direct-marketing gurus’, while chief marketing officers focused on loftier things like shaping brand perception.
Not now. Thanks to an explosion of data from social-media platforms, call centres, customer transactions and loyalty programs, CMOs ‘who want a seat at the table will have to harness customer data and leverage it – or risk being relegated to chief promotions officer.’
The article suggests a key alliance – or will it be a battle? – of the future will be between the CMO and the CIO to become a de-facto chief customer officer.
As Forrester analyst Josh Bernoff puts it, “The only sustainable competitive advantage is knowledge of and engagement with customers. Brand, manufacturing, distribution and IT are all table stakes. The only source of competitive advantage is the one that can survive technology-fueled disruption, an obsession with understanding, delighting, connecting with and serving customers. In this age, companies that thrive … are those that tilt their budgets toward customer knowledge and relationships.”
Welcome to the Age of the Customer
Posted in Big Data, Campaign4Change, change management, Consumerisation, Marketing
Tagged CIO, consumerisation, customer, data, Forrester, Gartner, Marketing
By David Bicknell
The organisational politics around sustainability are an ongoing issue. So far the need for a sustainability strategy has touched those responsible for corporate social responsibility (CSR), marketing (because of the brand and reputation implications of Carbon Reduction Commitment (CRC) league tables) and IT and Facilities who are having to manage and measure energy usage.
Now, an Ernst & Young report recommends, it is the CFO’s turn to pick up the baton. As this piece suggests, sustainability trends are shifting the role of the CFO in three key areas:
- Investor relations: “Shareholders are speaking much louder and much more stridently than they did just a few years ago. During the 2011 proxy season, 40 percent of shareholder resolutions were related to ESG issues. And over a quarter of ESG-related resolutions gained a 30 percent “Yes” vote, which Ernst & Young describes as a critical threshold (other observers say anywhere from a 10 to 20 percent vote can motivate companies to rethink their policies). Mutual fund companies are paying more attention to sustainability related issues, and the rating companies (which have received, ahem, a fair bit of scrutiny lately) are directing more focus towards ESG matters as well. All this leads to a shift in the duties of companies’ investors relations staffs; and CFOs, according to Ernst & Young, will lend more than a few hands with the demands placed on IR departments.
- External reporting: More than 3000 multinationals issue sustainability (or CSR or ESG) reports, and many of these companies now provide more than static or trite glossy PDFs. Companies including UPS, Timberland, and Microsoft are raising the bar in offering frankness while encouraging increased stakeholder engagement. To that end, more companies are having their sustainability reporting audited by third parties (such as the Carbon Disclosure Project for carbon emissions performance). And that experience with third party performance falls into the CFO’s lap because they know how to balance the challenges and opportunities that arise from third-party verification.
- Operational controllership and financial risk management: Early last year, the Securities and Exchange Commission issued guidelines to companies on how to disclose risks possibly related to climate change. Carbon data, and more frequently, water data, is becoming financial data because of these resources increasing price. What was once tangential to the costs of running businesses has and will be central to the financial risks that come when running a company. Whether evaluating the costs of large capital projects or ascertaining the reliability of sustainability data, CFOs and the departments they head will be careful when ensuring that all this data is accurate.”
Admittedly, currently this is probably a more US-focused development. But then it’s probably only a matter of time before CFOs here have to start considering the sustainability implications of their job, if they are not doing so already.
Here are five immediate actions CFOs can take to enhance corporate value through sustainability:
• Actively pursue a sustainability and reporting program.
• Ensure that those responsible for sustainability matters do not operate in isolation from the rest of the enterprise — especially the finance function.
• Enhance dialogue with shareholders and improve disclosure in key areas, particularly those related to social and environmental issues.
• Ensure that directors’ skills are relevant to the chief areas of stakeholder concern, including risk management tied to social and environmental matters.
• Consider using nontraditional performance metrics, including those related to environmental/sustainability issues.
Ernst & Young report: How Sustainability has Expanded the CFO’s Role
Posted in Campaign4Change, environmental, sustainability
Tagged brand, CFO, CRC, CSR, Facilities, IT, Marketing, reputation, strategy, Sustainability