Chief Marketing Officers (CMOs) haven’t had it this good for some time. As Jack Trout observed the average tenure not so long ago stood at less than two years. Now it’s close to double that. The reasons why things got so bad, according to Trout, could be attributed to both internal and external forces. Internally, politics and competing functions combined to make it tough to get and keep the resources that CMOs needed to do an effective job. Externally, prima donna agencies with a hotline to the CEO also caused problems. Not helped, he says, by the fact that in most organisations the CEO is the ultimate CMO. The decisions they make essentially provide the marketing team with their licence to operate.
And that gives rise to this thought: if the CEO is the ultimate CMO, should the CMO become the CEO? The question might have seemed presumptuous at one time, and still may to some, but there are precedents for considering the CMO role in a wider light. The conversation about increased collaboration between CEO and CIO is now well advanced, and, at Unilever for example, the CMO and CSR roles have effectively been combined in one person. If the CMO role is casting its eyes sideways, why shouldn’t it look up?
Performing but misunderstood
A review of the prospects for CMOs may be timely, but that’s not to say it will be easy. According to Robert Rose, Chief Strategist at Content Marketing Institute, “The Fournaise Group conducted a study that found that while 90% of CEOs do trust and value the opinion and work of both CFOs and CIOs, a full 80% of them do not trust and are not very impressed by the work done by marketers. A Nielsen Study in 2009 found that the average short-term return on marketing investment was about 1.09. In other words, for every dollar spent on marketing, about $1.09 was returned.” So marketers are delivering the goods but CEOs don’t trust them.
Brad’s own experience as a CMO is that the marketing function’s value is not often fully appreciated because marketing operates as a “gestalt” between the understanding and insight obtained through hard data and analysis and intuition about the market that is the result of years of exposure to marketing research and trying to understand consumers from a deep psychological perspective. While the left-brain (analytical) portion of this is relatively easy to understand, the right-brain (intuitive) part is large invisible and seems like “hocus pocus” to most people who are more operationally oriented.
There are many reasons why CMOs are critical to an organisation’s success today. Chief among them is to be the voice of the consumer to the organisation. As markets continue to change rapidly and consumers continue to gain power, it is important for organisations to build a better understanding of the market’s evolving needs into everything that they do.
A key role of the CMO is to keep the CEO and the rest of the organisation informed about the market by commissioning, analysing and reporting strategic, insightful and actionable marketing research. This significantly increases the value of the CMO to the organisation.
Another way CMOs demonstrate their value is to take a more central role in developing organisation strategy and plans so that the organisation becomes better at addressing consumer insights.
The CMO should also be responsible for identifying the desired customer experiences at each customer touch point and then influencing the entire organisation including sales, service, operations and strategic partners, to deliver those experiences. This requires outstanding persuasion skills but also endorsement by the CEO.
Related to this is helping organisations understand how to align their values with their customers’ values and how to create a sense of community with their customers, including identifying the most current ways in which this can be done (e.g. CRM and social media). To underpin this work, the CMO could help the organisation reach consensus on its mission, vision and values.
Picking up on the need for brands to increasingly compete through their stories, Mark asked recently whether brands also need to be assessing their own actions within the context of a narrative and not just pushing stories for their brands out into the marketplace. “I can’t help feeling that at least part of the role of the CMO today is to storify the organisation’s own strategy… That might suggest CMOs [are the best people to] manage the crafting of two parallel storylines: the narrative surrounding the organisation’s journey (the push element); and the stories that consumers hear from the brand that convinces them to believe in the brand and its competitive value in market (the pull element).”
Certainly when we look at Brad’s list of the 50 things that make for a successful brand manager, what is most striking is how multi-faceted marketing has become. Gone are the days when CMOs ordered up ads from the agency. Today’s marketers need to be able to interpret research, analyse competitive environments, strategise for differentiation, plan communications across a full range of channels and build brand equity locally and globally. Until now, boards and management teams have largely viewed those skills as contributors to the things that really mattered – financial performance and returns to shareholders. But as brands themselves play an increasingly important role in delivering profits to companies and their investors, the skills needed to maximise brands as assets must also assume greater importance and profile in the leadership team.
Finally, we believe that CMOs are a strong lateral and creative talent in the senior management team. That ability is often used against them by others, but in a world where brands are assets and stories underpin brand value, what was once seen as a weakness may now be a significant strength. No-one should be able to tell a story better and, assuming Trout is right, and CEOs are an organisation’s natural choice for chief storyteller, there is something to be said for having a marketing person in the leader’s role.
So the role is continuing to evolve? What about influence? Some way to go there according to Martin Roll who spelt out the merits for greater involvement of marketing at C-level and Board-level in this post. “As the business landscape evolves, marketing also evolves into an organization wide strategic discipline,” Roll observed. “Given marketer’s knowledge of the customers, it is imperative that the CEO and the corporate board have a representative of the customer to continually educate them.” With their in-depth knowledge of markets and customers, marketers should act as a major resource for strategy formulation, he suggests. They are the people best placed to orient corporates towards customers and to leverage the internal capabilities needed to compete meaningfully and effectively.
“The role of marketing within a company is only going to become even more central as managing customer interactions and co-creating value become the building blocks of any corporate strategy,” predicted Roll. “In the future, the CMO will emerge as the strategic connection between the corporate boardroom, the top management team, the CEO and the customer.”
Many feel that the career path for CMOs is changing.
A poll quoted in Ad Age found that 54% of business executive believe that their CMO could one day take over as CEO. “The shift is due in part to the fact that CMOs are increasingly being charged with driving enterprise-wide transformation and creating measurable results. Often they are responsible for redefining business models or go-to-market strategies, driving a strategic agenda that will create significant value for the business and its stakeholders, and leading at the highest levels to drive change across organizations.”
The key requirements to get there, according to AdAge? Vision, results and leadership.
Others see the transition as more complex. Changing times for marketers will not be enough in themselves to propel more CMOs to the top role. Spencer Stuart interviewed CEOs with a marketing background about what CMOs now need to do to make the transition to credible contenders.
Their feedback suggests that the nature of the business itself will greatly influence the likelihood of success. It is generally far easier for a CMO to become CEO at a business that sees itself as marketing-led or consumer-oriented.
CMOs must look to reposition themselves within the executive team. Among the changes cited:
- They will need to demonstrate greater commercial awareness and take on more financial responsibilities, meaning they need to have a broad-base of experience to draw on.
- They must continue to test themselves beyond the marketing arena by gaining experience in other functions. For example, they will almost certainly need line manager experience and exposure to international markets.
- Within the senior team itself, they must position themselves as savvy and critical strategists with strong influence over the business planning process.
- They will need to demonstrate a clear and pragmatic understanding of finance and key financial levers, meaning they will probably have had P&L responsibility across brands, channels, customers and countries.
There’s little doubt in our minds that as organisations become more marketing-focused, the opportunities for CMO to become viable CEO candidates will increase. But for that transition to become more broadly accepted by Boards and by Executive teams themselves, CMOs need to play their part in de-risking the decision by diversifying their skills and proving that they can transform customer insights into strategic vision and value development into returns for shareholders.
Co-written with my colleagues Brad VanAuken and Derrick Daye at BSI.