Editorial: On costs and Culture

Why do CEOs automatically assume that costs are too high, asks Jules Goddard, in his fascinating lead article? Perhaps we are so saturated with the public discourse of recession, living beyond our means, bureaucracies and hair shirt environmentalism. Or is it something in a puritanical, Protestant temperament that sees waste everywhere? Or some kind of macho impulse that comes over CEOs in power?

In these febrile political times, it is tempting to draw parallels with UK plc. In government, one person's waste is another person's unemployment benefits; whereas in business, one company's waste is another company's added value. But the parallels end there since government must subject its strategy to the popular will which, as we have just seen, is more than usually muddled.

As has been pointed out many times, the British want Scandinavian services but with US tax rates: an unsustainable combination for any government. Like trying to sell Jaguars with Vauxhall costs. Companies, on the other hand, have the luxury of controlling strategy decisions and can decide if they are marketing a high quality, added value product/service with the requirements of huge investment in staff and resources, or a pared down, cut-price offer requiring none of the above. As Goddard points out, a cost strategy is an output of brand strategy, not a strategy in itself. Would that governments grasped this principle more firmly.

Recent exchanges on the Marketing Society's website have illustrated a wish for more on B2B markets. Market Leader has been remiss here, and this issue begins to right the balance with an article by Laurie Young on marketing technology as a service. His analysis goes to the heart of why technology companies have been slow to adopt the kind of sophisticated marketing we are familiar with in consumer markets. Such companies are staffed by engineers, and the technical skills and attitudes of engineers pervade the company culture. This has particularly detrimental effects on marketing, which is typically relegated to a sales function.

An unwillingness to embrace the full potential of marketing can be typical of many B2B sectors if the culture is dominated by a professional skill: lawyers and accountants are obvious examples. The broader point is that marketers have to work hard to recognise the uniqueness of their business culture, rather than grafting ideas and activities directly from consumer goods experience.

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Judie Lannon Editor

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