Marketing Capability Development: Most Companies Spend Lots, Measure Zero

Over the last few months I have collaborated with the World Federation of Advertisers (WFA) on research about building marketing capabilities within companies.

Many companies today have a “people” statement in their corporate manifestos. Statements like “Our people are our most important asset” or “nurturing the careers of our people is critical to the success of our company” are commonplace.

The reality is that, especially during the economic crisis of 2008/2009, the investment in the development of employees’ people skills and marketing capabilities has taken a serious nose-dive. According to U.S. data from Deloitte, spending in capability development went down by 11% in each of those two years, for a decrease of 22% in total. Spend in capability development is now growing again, but that seems to be just making up for lost time.

The biggest shock from the WFA research findings is that only 39% of marketers said they have KPIs to track the impact of their investment in capability building.

Can I just repeat that for effect? Only 39% of marketers measure if their investment in people capability building has any impact on their business at all. A robust 61% stated that marketing capability programs were not linked to year-end performance criteria. And 71% answered the question “Are you using KPIs to track your marketing capability development progress?” with a simple but astounding “No.”

We are not talking about small investments either. Again, according to the Deloitte study, companies spend anywhere between $900 and $1,400 per person per year on capability development, depending on the maturity of the organization. And that is only on the learning content piece, so add to this total time away from the office, travel cost, outsourced resources to deliver content, etc., multiply it by the number of employees engaged in these activities, and you are quickly talking about sizeable budgets.

Another challenge we found is the lack of clarity about what “marketing capability building” actually means. To quote from the WFA study Executive Summary (which you can find here): “Almost 60% of respondents said their organization has a clear definition but the definitions shared by our respondents show that the term means something very different to everybody. One common misconception is to reduce the scope of marketing capabilities to training/skill gapping (57% of respondents confirmed this is the case in their company).”

The WFA study further revealed that 54% of respondents felt their company did not have a world-class marketing team. Respondents felt their organizations needed the most capability building attention in the following areas: CRM, content/ storytelling, shopper marketing, digital integration and marketing innovation.

We also looked at relative scores, combining low current performance scores with high importance scores. This revealed that media and brand positioning required an increase in skills and capabilities, as they were the number one and two in importance, with relative low current performance scores.

The study found a number of companies that our respondents felt are already doing capability building well. They are P&G, Unilever, Nestle, The Coca-Cola Company and Diageo. For everybody else, there is clearly a lot of work to be done. My recommendation is to start by measuring if what you are doing today or have been doing to date is having any kind of effect, and build from there.

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1 comment about "Marketing Capability Development: Most Companies Spend Lots, Measure Zero".
  1. Craig Mcdaniel from Sweepstakes Today LLC , June 9, 2014 at 1:25 p.m.
    There is a big difference between companies that have high profit margins to low margins. Also many other factors have come into play. Example Obama Care. This alone has been a job creating killer for me with high premium rate increases. In short it gets down to a matter of priority for each company big or small.