Why the death of managed earnings is a victory for marketing and communications

There was a story on the news recently that General Electric CEO Jeffery Immelt is recommending the company abandon the practice of issuing earnings statements and trying to manage the company to meet those expectations. Coming from one of the great failures in American business during the last several years, this is indeed welcome news for all marketing and communications people. As people who believe in branding know you can know more manage earnings than you can milk a bull!

Actually by way of a history lesson the concept of managing to earnings started with GE and spread to a host of publicly traded companies like a flesh eating virus. Gone were the concepts of doing what was best for the company in the long term. It was replaced by doing what needed to be done in order to meet the quarterly numbers and as a result the long term success of the company was often compromised. This resulted in all sorts of financial shenanigans which played no small role in our current situation of financial distress.

Hopefully this change of heart, assuming it is both true and lasting, will lead to a return to long term vision which in my opinion has tremendous upside potential for marketing and communications. The two parts of the organization best equipped to deal with issues around branding.

By forgoing a short term vision of the organization, marketing and communications people will be able to do what they do best. Design a program which enhances the brand and allows for the organization to be sharply defined within the marketplace and clearly differentiated from the competition both in the forms of other organizations as well as competing technologies. As we all know marketing and communications is a game of inches and success, or failure, is often measured from the vantage point of time, not a few days.

My greatest hope is that since GE started all this foolishness that they lead a trend towards a more sensible form of management and allow for marketing and communications to emerge into its rightful place as the managers of the brand. A brand takes a great deal of time to build and unfortunately for all the MBA's who think the world runs on their clocks, there is no set amount of time we can tell you for when the brand will mature. In fact I can promise you that much like our economic recovery, it will proceed in fits and starts and may even move in a parallel direction for a period of time. Let's hope CEO's get smart and realize you can not manage earnings but you can invest in a brand and finally let marketing and communications people do their job!