Cards on table: I avoid shopping at Wal-Mart. I also think Wal-Mart shafted Julie Roehm. But I also believe Roehm should not be hired for any marketing position again.
Roehm, you may remember, was the senior vice-president of marketing who was fired by Wal-Mart in December. The story has been more National Enquirer than Fortune. The advertising agency gets fired weeks after being selected. Wal-Mart alleges acceptance of improper gifts from agencies and even sexual dalliances with subordinates. Wal-Mart even takes away her discount card.
Roehm's side of the story is outlined in a BusinessWeek story. It is the first time she has given a major interview to the media. For someone telling her side of the story, she does not come out looking good.
Everyone in branding is familiar with the backstory. For a variety of marketing and other reasons, Wal-Mart is no longer the growth engine it once was. It was searching for a new marketing strategy as part of a turnaround. That new strategy would move away from the "everyday low pricing" that primarily appealed to the less-affluent, and attract a wider audience among the middle class. To execute that strategy, Wal-Mart even came out with its own designer labels like "George."
To help with the turnaround, Wal-Mart hired Roehm, 36, with a base salary of $325,000 and a signing bonus of $250,000. Roehm had been director of marketing communications at Chrysler Group. She had made her mark with edgy advertising, including the infamous "Lingerie Bowl" ad that was scheduled to show during the Super Bowl. Chrysler canceled the showing, scared off by the reaction from those offended by Janet Jackson's famous "wardrobe malfunction." Part of Roehm's mission was to be a "change agent" at the company's headquarters in the small town of Bentonville, Arkansas.
But 10 months after she was hired and shortly after hiring DraftFCB as its agency, Roehm was fired. She has since filed a $1.5 million lawsuit against Wal-Mart.
A jury will sort out the rights and wrongs. Oddly, after such a debacle, BusinessWeek calls her a "marketing whiz." But here's why Roehm would be wrong for any position in marketing:
- She didn't do her research: A library of books have been written about Wal-Mart, including many by former executives. All point out the overwhelming focus on cutting costs. Some executives even use doors on supports as desks to avoid buying office furniture. Offices are windowless; walls, gray. But one of the first things Roehm did was to "paint her office chartreuse with chocolate-brown trim," according to BusinessWeek. This obviously angered Wal-Mart. In its response to Roehm's suit, Wal-Mart says Roehm "is free to collect 'a step ladder and paint supplies."
- She lost focus on who pays the bills: Following a tradition set by founder Sam Walton, Bentonville executives spend a lot of time visiting stores and talking to customers. But that was not Roehm's focus. Says BusinessWeek: "For much of the summer, Roehm jetted around the country visiting the 30 or so ad agencies that were bidding to win the $580 million Wal-Mart account." Remember, too, how cost-conscious Wal-Mart is.
- She didn't understand marketing: Culture is fundamental to marketing, as everyone who tries to sell to the Hispanic, international or other segment understands. It is also fundamental to organizations. How many trees have been killed to print books and newspaper articles about cultures within businesses? So what is Roehm's takeaway from her painful experience: "The importance of culture. It can't be underestimated." She should have learned that LONG before she reached her position of responsibility.
- She got sucked in by the 'Dark Side': The Dark Side that appealed to Darth Vader was power. The Dark Side that appeals to marketing is creativity. Like power, creativity can be a force for good as well as evil. As the Lingerie Bowl shows, Roehm was looked for "edginess" in her advertising. The chief spokesman at Chrysler, her former employer, says, "We're probably the edgiest automaker in terms of the things we try. And the times Roehm went over the edge have been well documented." Part of Roehm's problem -- although not her fault -- resulted from her winning ad agency placing an ad in an industry publication showing a lion mounting its mate. The headline read: "It's good to be on top." Remember, the purpose of marketing is not "to go over the edge" but to get people to buy -- not once but again and again.
- She didn't understand how to execute: Branding execution depends on two factors: Internal buy-in and external support from supply chain and other partners. Without internal buy-in for your project, it is doomed. How did Wal-Mart ultimately beat KMart in the retail sumo ring? One factor was Wal-Mart's famous weekly meetings, which kept managers up to date and focused on common goals. BusinessWeek: "Roehm, on the road and unaware of how important it was to attend these meetings, missed several in a row. "'Had I known,' Roehm says, 'I never would have been gone on Friday.'" Had you known??!! Did you not research your company? Did you not talk to your peer executives?
Wal-Mart has mud on its face, too. It hired someone who obviously would not fit in their culture. Some of Roehm's problems stemmed from Wal-Mart's organizational weaknesses. For example, the consumer research and marketing strategy department reported to Roehm's boss instead of her. To make matters worse, the manager of this department tried to shut her out, according to Roehm. Research is so important to branding that it needs to be integrated within marketing, not separated. Wal-Mart's accusations of sexual impropriety on Roehm's part are both irrelevant and unseemly. Merchandising was the most powerful force in the organization, which led to an over-emphasis on in-store signage to drive sales. Wal-Mart didn't commit to a new strategy long enough to see whether it would work. As soon as same-store sales began to slide, Wal-Mart returned to its "everyday low prices" USP.
But Roehm still made too many rookie mistakes. Would you want her to head your marketing program now? Julie, save your signing bonus, and I sincerely hope you'll win your lawsuit, because I don't think you will ever work in branding again.
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