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A profit and loss center (P&L) is the heart of business. Based on many online comments from communicators and marketers about the way businesses should work, it is clear they have never run a P&L. And until you run one, you really don’t comprehend the totality of a business.
Let’s not confuse a P&L with a consultancy, either. Single person consultancies do not have employees’ families relying on them for wages week after week, month after month. Running a P&L is a serious responsibility that causes greater accountability in decision making. Here are four reasons why a marketer could benefit from this experience:
1) Better Respect for Measurement Statistics
Rather than saying all relationships online matter and that statistics are irrelevant, online marketers would realize they need their social media efforts to produce tangible ROI and outcomes. That’s not to devalue relationships. That means invest more in the relationships that work in social media and abroad, and STOP investing in communities that aren’t populated by core stakeholders.
If two social networks yield better results than one, a company may determine to invest in the relationships that are working, rather than spread themselves thin or burn resources in areas where their natural community is not strong. Whatever the ultimate decision, to not consider measurement statistics is inexcusable in any serious concern. They demonstrate how your P&L is performing.
2) Getting Beyond Attention Into Real Action
Similarly, marketers like to claim attention as a success. Earned media impressions online and in traditional media helps build grassroots momentum and trust. However, these metrics and efforts alone rarely achieve anything more than attention itself. Integrated into a veritable marketing and sales program, attention can help create actions, which in turn produces sales. Running a P&L teaches you to look at the whole marketing picture, not just the hype.
3) Appreciation for Your Whole Team
Marketers love stars. Managers love teams. When you manage a P&L you learn to appreciate how an entire team contributes to your success. For every public star, there are often multiples of role players who actually do the work, keep the lights on, close leads, and generally comprise the business. Great teams make for sustainable businesses, not individual performers.
Stars can play well within teams, but in a P&L you also learn that many of them are ultimately replaceable. Losing many members of your team in a short period can cripple your business. Running a P&L teaches you that talent management nurtures the whole team.
4) Valuing Great Products & Services
When you have a bad product or service, it is hard to promote it. But many companies do, and marketers like to complain about it.
What’s hard to actually do is build a great product or service. Until you actually have a product or service that beats the daylights out of the competing services, you cannot understand how difficult this is. Running a P&L teaches you to appreciate what it really takes to be great. And it goes well beyond marketing advice.
They say executives should spend a week or two a year in front line jobs to understand the full nature of their business. Similarly, marketers should spend at least a year of their life running a P&L so they understand how their brand strategy fits within the larger context of sales, marketing, recruitment, operations and yes, overall corporate strategy.
P.S. Gini Dietrich and I discussed this blog post topic in New York City last May.