A senior executive recently suggested to me that the disciplines of “strategy” and “marketing” should be merged. There’s no need any longer for them to be separate, he proposed. I took note. This was, after all, a senior manager of a major client. From what I’ve heard and read since, he’s not the first person to have had this thought.
But this idea is both ill-informed and dangerous. It has the potential to confuse CEOs, executive teams, managers, and boards. It would lead to bad strategy practices driven by a perilously narrow strategic scope. Strategy is far more than product marketing.
Here I explain why “marketing” never became “strategy” and why the disciplines are, and should remain, different. It’s more than a word game. It has practical significance.
Corporate or business strategy came into its own in 1965 via a foundational book by Igor Ansoff called Corporate Strategy. Renowned management scholar, Henry Mintzberg at McGill University, has referred to its publication as “a kind of crescendo in the development of strategic planning theory.”
Around this time, the mid-1960s, strategy emerged as a teaching discipline. At its beginning the course was often labelled “Business Policy” and a book of cases with that title produced by Harvard Business School professors was widely adopted. The term “policy” persists in a few strategy textbook titles to this day. The more common label is, however, “strategic management”.
The subject filled a void for an “integrative capstone course.” The “capstone” element of this brought together all the varied business disciplines covered in a program of study. It assisted students to take the view of executives at the highest levels of organizations. It thus took a step above the various specialist disciplines such as finance, accounting, operations, human resources, and marketing to become a general management perspective. I’ve taught this course as part of degree programs.
Strategy’s Focus Areas
Strategy is different from marketing in a similar way that the CEO’s job is different from the head of marketing’s job. The strategic management of an organization deals with six key areas, all of which relate to decision making at a higher level than marketing.
Positioning. Strategy goes beyond relationships with customers, alone, and extends to an organization’s relationships with its other key stakeholders such as employees, suppliers, shareholders, and the community. Strategy is concerned with positioning an organization on the factors that are important to each key stakeholder group. Part of this is concerned with pulling these relationships together in a coherent way. This is central to corporate success. A slip up in any one of these relationships with stakeholders endangers them all, hence threatening an organization’s survival and growth.
Objective Setting. Questions around growth and survival lead naturally to another central task of strategy, objective setting. Each functional area sets objectives, of course, but here the objectives are for the organization as a whole – not simply for, the marketing function, for example. Objectives at the top strategic level must consider all stakeholders, as a lack of effective objectives around employees, for instance, spills over to poor results for customers and other stakeholders. Objectives play another important role in strategy. They measure the effectiveness of the strategies themselves. The question is: Did the strategies chosen by executives produce the results intended?
Diversification. Once an executive team or board considers objectives around corporate growth, its attention will often shift to the issue of diversification. This is not simply of brands, that’s marketing, but of the corporation itself. CEOs, boards, and executive teams often struggle with how diversified their organizations should be. The strategy questions that arise here include: Should the business diversify to grow or stick only to its core business? How diversified can the business become and remain successful? How risky is it for a company to remain narrowly focused? These are questions that are clearly outside the scope of marketing.
Mergers and Acquisitions. Growth can also come by way of mergers and acquisitions – also part of strategy’s purview and clearly beyond the remit of marketing and the marketing function. Senior executives are often presented with the opportunity to expand revenue by purchasing another business. At the same time, they’re faced with issues around purchase price, problems associated with integrating the systems of different organizations, and complications around cultural fit.
Mission and Purpose. Strategy also straddles the realm of mission, vision, values, and purpose. Crucial answers must be found for “what business are we in?” (mission) and “where do we see ourselves in some years’ time?” (vision). Addressing corporate values, which shape what’s acceptable and unacceptable in work behavior, also falls under the strategy mantle. Values shape culture and ultimately influence organization performance. Articulating corporate purpose in terms of whom the organization serves is much in vogue at present and is also the province of strategy. Providing a satisfactory resolution to this issue gives direction to an organization’s staff and assists in employee motivation.
Execution. Finally, strategy has to grasp execution. The strategies that an executive team adopts at the corporate level must be driven throughout an organization via a planned program of action.
Maintaining the Broader Strategy View
Before you or your fellow executives throw your hands up and exclaim “strategy’s just marketing,” let me suggest that you pause and consider the lines of demarcation I’ve outlined here. Zero in on these two fundamental points.
Strategy is concerned with all key stakeholder relationships including customers, employees, suppliers, shareholders, and the community – whomever influences the success of an organization or business unit. The congruence between these relationships is fundamental to strategy working, as it should, in a virtuous circle to produce corporate success.
Marketing is concerned with the customer relationship in detail. The techniques and activities to do with branding, conducting market research, designing advertising copy, engaging with social media, website design and so on are the bread and butter of marketing specialists.
These distinctions are important to your management practice and to your business’s success. Keeping them in mind will make you both a better strategist and a more effective marketer.
Author – Graham Kenny
Regular author in the Harvard Business Review
Graham Kenny, CEO of Strategic Factors, is a recognized expert in strategy and performance measurement who helps managers, executives, and boards create successful organizations in the private, public, and not-for-profit sectors. He has been a professor of management in universities in the U.S., and Canada. You can connect to or follow him on LinkedIn.