Maggie Ji, Chief Financial Officer (CFO) of digital marketing agency WME Group, started working for the company in 2008, the same year the business was founded. She was first employed as an intern in the marketing department, and today as CFO, Ji works with nearly 450 employees in seven countries with annual revenues approaching $50 million.
Ji believes that while marketing and finance departments can sometimes appear to work at cross-purposes, they have the potential to work together closely to further company goals.
“The marketing and finance departments have traditionally clashed. Naturally, CFOs want to strictly manage the cash flow while chief marketing officers strive to generate business," says WME Group Founder and Managing Director Nick Bell.
- “But to get the best results, they need to work hand-in-hand. With the slew of marketing options available these days, CFOs have much more flexibility with their budgets. Marketing is still very possible with small budgets. Instead of spending on radio and television [advertising], you can generate good, tangible revenue by allocating funds to EDMs, SEO and social media," he says.
Ji says working her way up from the marketing department to the finance function has taught her important skills she can use to benefit the business.
“The most important skill I have learnt is to think and act like an entrepreneur. Work ethic is also critical. Your colleagues will respect you when they see that you are committed to the best outcomes in the business and this leads to better relations between marketing and finance," she explains.
Finance often sits above marketing in the normal organisational hierarchy because it controls the budgets marketing needs to generate sales; however, this can potentially create tension between the departments. Without marketing, the business can struggle to support sales needed to generate the funds finance controls. Without effective communication from both sides, this dynamic can create friction instead of forming a beneficial relationship.
Business coach Karen Chaston has not always appreciated how a good relationship between marketing and finance helps support a business's growth.
Chaston is the former CFO of publicly listed company National Leisure and Gaming. She says while she was in the role, she thought the CMO was just responsible for creating offers for the company's stakeholders.
It was only when she walked away from her corporate role she says she started to appreciate marketing is more than just, "the brochure department."
“I always saw their excesses as unnecessary and pandering to the CMO's ego than for the greater good of the company." Now she runs her own business and says she has a much better appreciation for the ability of marketing to drive business.
For marketing and finance to work together, it is essential that the two departments share the right information.
Jeff Poe is the CEO of Platinum Professional Training, one of Australia's largest financial services training businesses. As a business owner, he says he has first-hand experience observing the connection between finance and marketing.
“Marketing drives business development, builds brand equity, supports sales and keeps the pipeline of business opportunities healthy and active. This is important for financial and operational survival," he says.
He says understanding how each marketing dollar generates a return is vital, and it's essential for both teams to find a way to work collaboratively.
According to Poe the board of directors has an important role to play in facilitating a good relationship between marketing and finance. This involves putting the CMO and CFO on as many committees as possible together.
“This way, they can work together and build a relationship through the committee decision-making process. Senior staff from each area should also contribute to this. For instance, it's important to involve marketing in the budget development process. In the same way, businesses need to ensure finance is involved in planning the marketing program," he adds.
Increasing communication can make both departments more effective. For example, if there is good communication between marketing and finance, CFOs can potentially streamline return on investment (ROI) analysis on marketing campaigns and build insights into future marketing initiatives.
Ramifications for business
In a global, competitive business environment, Chaston suggests it is essential to achieve success by supporting a workplace culture where there is a constant exchange of ideas.
“This can only happen when every person in the business has a basic understanding of what other people in the organisation bring to the company and through encouraging everyone to put forward their ideas, no matter what their position," says Chaston.
When finance and marketing can clearly see the benefits and value each division can bring to the table, both departments can come together to drive business performance.
- Communicate effectively: Develop an understanding of co-workers and their roles.
- View holistically: Recognise that no one department exists independently.
- Appreciate diversity: Acknowledge that each team brings unique talents to the workplace that can add value to the organisation.