By J.A. Souza, January 30, 2012
Executives and entrepreneurs are always concerned with the economic environment.
They ask, what will the macro economic forecast be for the next year and how will the economy expand? What will be the projected inflation and interbank rates be? What will the employment level be, the production, and what to expect from consumer behaviour?
The economy need to be analysed, on how and when the peaks and valleys will occur. In the same way, the business environment is analyzed and projected by companies. The company’s executives determine and plan how the sales and production can be enhanced, how to improve market share, how the costs will be controlled, what are expected profits, how to manage the cash flow, and how to maximize the shareholder wealth?
A management team plays an important role in establishing the strategy, designing, and implementing the tactical and operational plans to achieve the goals. Specialists in; production, marketing, human resources, IT, finance are the ones convened, to put the designed plan into action.
To lead them, the executives are designated by the board. The leader in general is a seasoned and talented professional with a proven track record in his career. But what talents, capabilities does the leader brings to the team and to the organization?
It has been observed that, depending on the economic and business environment, in good times companies are directed by professionals specialized in marketing, and in bad times companies are directed by professionals specialized in finance.
When the sales are growing, when new products are a success, when the production is in expansion, it is clear that the plan was developed by a team with great ideas, good projects, production, supply chain, IT, and most of all a high sense of sales, focused on the demands from customers and markets. The ones responsible for those achievements are, for sure, from the marketing stream. In this good time scenario, the executives from finance are not the leaders of this process. They are the followers.
On the other side, analyze the companies’ management during bad times. Observe when the sales are going down, the product is obsolete or it does not have the commercial appeal, the costs are growing, the interest is high, the debt is getting higher or, the recession is knocking at the company’s doors.
At this point the board prefers a leader with capabilities to turnaround the unfavourable scenario, using strong and bitter combined financial measures, and bringing the company back on the right track. The financial leader is the one to conduct the assignment. This is not a pleasant task and it has been observed that professionals from the marketing stream do not succeed in those depressing times. In the bad times the professionals from marketing are the followers of the decisions issued by the financial leaders.
To conclude, the dichotomy between marketing executives and finance executives leading companies is not new, and will last. The challenges are global and depending on the scenario, leaders with special tools, techniques, and skills, will be the ones generating profits for companies. The board is the one responsible to decide what type of leadership the company needs.