The CMO to the CEO: do you want me for strategy, marketing communications or P&L?
In the latest HBR issue, July-August 2017, the marketing spotlight is taken by a cold reality: CMOs seem to never last, changing roles too often (in fact it is the riskiest job from the C-suite, with an average of 4.1 years of tenure compared to 5.1 for CFO and 8 for CEO*). Still, as it usually happens in statistics, the cumulative number comes from extremes: 40% have been in their roles for two years or less and 11% for more than 10 years**.
The authors of the article have spent eigh years on this topic, including their personal experience. This is what I am going to do also (sharing my personal experience, not spending eight years on the topic:), after a brief blinkist of the original article.
Why do CMOs change so often and why 80% of CEOs***, when asked about their CMOs declare that they are unimpressed or do not trust them? Not surprisingly, the percentage of discontent is similar from the other side of the boat.
In most of the cases, it starts from the troubled relationship between the two parts. While other C-suite roles (CFO, CIO, CHRO) are inward facing, the CMO role is directly connected to customers. Whatever a new CMO is doing - in most of the cases, unfortunately, a new advertising campaign with a new agency - the potential fail of that action will impact not only the company’s performance, but will seriously trouble the company inside. Not mentioning that, as Joe Tripodi, a CMO veteran for several companies including Coca-Cola, Bank of New York and Subway said “when it comes to advertising, everyone is an expert - employees, the public, franchisees, even retiress”.
(Break). I felt it so many times on my skin and I did my best to bring in analythical objective data - paid from the marketing budget - to avoid subjective and biased opinions, including mine, as a head of marketing.
The tension between the CEO and CMO starts from the job description, which in many cases, according to the long HBR review is poorly designed.
There are three types of CMO role, each of them in accordance with a company profile, historical moment and priorities. It may happen that in different stages, a different type might be needed. If that is the case, the CEO holds the primary responsibility to accustom the change - particulalrly when we speak about extending a CMO responsibility at the expense of other C-suite role shrinkage.
- The strategist type - according to HBR reasearch, it accounts for 31% of CMOs. They are in charge with decisions and how these decisions are streamed into new products, services and experiences. They are at the top of the company’s innovation.
- The commercializer type - according to HBR reasearch, it accounts for 46% of CMOs. They have a rather implementation role, with a focus on marketing communications - traditional and digital - that help sell the company products, services and experiences that others design. In this case, they play a second role in the innovation process (mostly the cases of the tech firms).
- The enterprise-wide leader with P&L responsibility - according to HBR reasearch, it accounts for 23% of CMOs. This is a combination of the two roles, which means they focus on the design and implementation of the strategy. This type of CMO has a wide range of responsibilities, from innovation to P&L, from sales to distribution and pricing.
(Break). I was not a CMO, I was a local Head of Marketing for 10 years (I am curious how that 11% for 10+ years in role relates to local Marketing Heads for different markets and how this impacts positively or negatively the performance).
When I was promoted in the role, I was a commercializer, with a partial P&L responsibility, which is the case for many local marketing heads of big corporations. With the local sales dynamic growth, we got on the CEO agenda and soon the marketing role moved more and more into an enterprise-wide leader one. Romania was the number two market of the Central European region and it was recognised for innovation on different areas, from digital embracement to excellent customer service, fram brand building to social involvement.
I enjoyed this role more than the commercializer one and I think it suits me best out of all three. It may happen that with age and experience, I would naturally evolve into the strategist type. Still, even in times of pure commercial marketing, I had my oxygen gate of innovation. Without it, I would have been another one who bit the dust…
When hiring any of the three types, what should a CEO pay attention to:
- the degree to which consumer insight needs to drive firm strategy - if this is critical to the company performance, then only a strategist could make it. Only if a company’s innovation is creating the need, should the CMO be less of a strategist and more of a commercializer.
- how difficult it is to achieve firm-level growth - when you are growing slowly or you operate in a very competitive market, pick a strategist.
- the level of dynamic change in the marketplace - when you are having a shift in your business model, eg from traditional to e-commerce, do not expect a commercializer to drive it to heaven, but rather to hell. With their wider knowledge, strategist and/or enterprise-wide leaders get more chances in making this change happen.
- the historical role of the CMO in the company - in case the role has changed, the new one should be clearly explained to the newcomer as well as to all employees.
- the structure of the firm - if it is a multi-brand or a single brand, a centralized or dispersed marketing structure, the CMO role changes accordingly.
Once you have established what CMO role you are expecting for your company, be sure as a CEO to:
- match responsibilities to the job’s scope - while almost all CMOs are in charge with brand strategy and customers insight generation, a strategist would be responsible for strategy and not for converting strategy into tactics, while a commercializer would have extensive responsibility for developing and converting the marketing strategy into marketing plans that drive sales, but limit responsibility for topline. This is usually a common misunderstanding - from my personal perspective - when regardless of type, a marketer, be he/she fit for the job would be responsible for anything from top to toes.
- align metrics with expectations - metrics should go hand in hand with the profile, therefore a strategist will be measured on performances such as revenue increase and meeting budgets. In the same time, a commercializer would be held responsible for meeting budgets, results produced by marketing programs and project outcomes, but not for revenues.
- find candidates with the right fit - that reminds me of a friend who was annoyed that he could not find the right woman to be with. His problem was that he was constantly searching in a group A of women who barely had the traits he was looking for, which were common for a group B of women. Unfortunately, he was spending most of the time in group A. Moreover, ten years ago time was gentle and some learning or experience gaps in a top role could be covered on-the-job. Now, the expectations increased exponentially and there is no much time left for adjustments. That doesn’t mean you should only look for like-to-like profiles, but to be open to enlarge the job descriptions, so that people from other industries, but with the necessary skills cand have a chance on.
Nowadays, a CMO should be comfortable living among inherent contradictions and should have dexterity, mental agility and the ability to balance competing priorities and contradictions.
When it comes to the classical duo marketing-sales, there are more and more voices who say that this couple would split for a more future oriented pairing: marketing and IT. The CMO & CIO would be the power partnership with shared goals, joint department meetings and sinergy.
*Source: Korn Ferry, HBR
** Source: “CMO Impact Study”, 2014 and 2015, HBR by Kimberly A.Whitler
*** Source: 2012 Fournaise Marketing Group global survey
The original article is here: https://hbr.org/2017/07/the-trouble-with-cmos
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