Chief Marketing Obstacles: The Treacherous Trail to CMO Success

 

Takeaway

  • Chief Marketing Officers have an average tenure of only two years in the C-suite
  • Four critical factors influence a CMO's power: industry instability, firm innovation, peer marketing experience, and responsibility for sales
  • Successful CMOs build relationships with top leaders that have control over business resources
  • CMOs with sales responsibility exert more power in the organization

Donald Richards (name changed) knew he was in trouble when the topic of brand reinvigoration was raised by a consultant hired by his CEO.

“I was all in favor of a renewed focus on marketing and brand,” the former chief marketing officer recalls, “But it was clear as we discussed the proposal that everyone was thinking of this as purely a communications and advertising initiative. At that point I realized my efforts to position myself as an organizational change agent had fallen short.”

It’s a failure that seems to infect the CMO suite, with chief marketing officers suffering an average tenure of less than two years, according to a much-discussed study by Spencer Stuart in 2004. Marketing executives have an image problem, and it begins with the very definition of the title.

What is meant by “marketing?”

“There are three basic types of marketing people in an organization, and where the CMO fits in depends a lot on the viewpoint of the CEO,” says McCombs School of Business Professor Vijay Mahajan, who has studied the CMO phenomenon extensively.

“You’ve got marketing, sales and communications; they are not all the same, obviously. How the CMO is positioned within the organization has a tremendous impact on his or her power to influence major decisions in the firm.”

Pete Hayes, Principal and CMO at Chief Outsiders, agrees. “We see CMOs get stuck in a pure communications role versus one that is at the heart of the business. If you are just talking about products that are developed, it is only a shiny veneer, and the rest of the organization won’t value that.”

Mahajan defines CMO power as the ability to influence allocation of resources and other major strategic decisions within the top management team. “It isn’t just about leadership style or personal strength,” he says. “I’ve seen smart, dynamic executives falter in the CMO position when the job itself isn’t structured for power.”

Four sources of CMO power

In his most recent study, Mahajan and co-author Pravin Nath identify four critical factors impacting CMO power, regardless of the personal strengths of the executive.

  1. Industry instability. When business is a roller coaster ride, top management teams better appreciate the market and consumer perspectives of the CMO. “Vision needs to be articulated,” says Hayes. “What’s going on in the business, what are your sales organizations like, how are you going to market, what is the gap in your expertise? A smart CMO can play in the middle of all that.”
  2. Firm innovation. John Ellett, CEO of nFusion and a former senior marketing executive at Dell Inc., has interviewed nearly 50 CMOs across the country. “The key to success, in many cases, is being able to position yourself as an agent of transformation,” he says. “We’re talking about business, brand or executional transformation, and if the CMO can align with the rest of the C-suite on the kind of change expected, that’s a fundamental ingredient for success.”
  3. Other marketing experience in the C-suite. It’s hard to feel the love when others on the executive team think they could do it better. “In a top management team it is rare to have other marketing people on the team,” says Mahajan. “But you often have sales managers or product development people who do have marketing perspectives. So they think, why should we listen to you?”
  4. CMO responsibility for sales. Marketing has generally been granted long-term accountability rather than responsibility for quarterly results. “If the CMO also has responsibility for sales, he is both short- and long-term,” says Mahajan. “So he’s not going to invent an opportunity that his team is not willing to chase.” He found that chief marketing officers with bottom-line sales responsibility wielded more power than pure marketing or communications executives.

Who is to blame if things turn sour?

Ellett believes some CMOs are complicit in their own demise. “The CMO arrives with great fanfare, ‘I’m going to help turn around the business,’ and they undertake this great, inspiring brand campaign,” he says. “But a year later the business hasn’t fundamentally changed, and they look ineffective.”

Marketing executives who recognize the need for both brand and business transformation, often find they don’t have the power to affect the business issues without peer support. “Those first hundred days they need to focus on building relationships, enrolling and engaging the leaders who do control business resources,” Ellett stresses.

“The savvy CMO must be clear about expectations, selling the changes that need to be made, and clarifying how he or she needs to be involved in strategic business decisions.”

The case for a strong CMO

Mahajan is adamant that a powerful CMO makes for good business. “You must have a CMO on the top management team, because that is your consumer advocate, the one looking at the long-term health of the company,” he says. Give the CMO power over strategic decisions, he argues, including a direct tie to revenue generation.

“The critical ongoing role of the CMO is to get actionable insight; customer insight, competitive insight, to help formulate the entire strategy of the company,” Ellett concludes. “If marketing isn’t doing it, nobody is.”

 

Faculty in this Article

Vijay Mahajan

Professor of Marketing McCombs School of Business

Vijay Mahajan holds the John P. Harbin Centennial Chair in Business at McCombs School of Business, University of Texas at Austin. He has received...

About The Author

David Wenger

Director of Communications, McCombs School of Business

David Wenger is the director of communications at the McCombs School of Business. He writes primarily on topics of innovation, competition and human...

Comments

#1 I agree that CMO and

I agree that CMO and marketing as a profession is often misunderstood and under appreciated. While CMOs are and should be responsible for the brand, I find it ironic that companies understand the value of their brand but not the CMO and the marketing department. CMOs should be concerned with bringing both long term value to the company while meeting short term revenue goals. Often the long term is sacrificed for the short term. As the President of the Puget Sound Chapter of the American Marketing Association in July, we are continually striving to show the importance of the CMO position.

#2 Part of the issue is finding

Part of the issue is finding better ways to demonstrate the link between marketing and brand performance and the firm's financial performance. Ramesh Rao has addressed this, from a finance professional's viewpoint. http://bit.ly/mmomf6

#3 Great article, Dave. The

Great article, Dave. The transformation role of the CMO is one of the most essential and may be the most overlooked. It is also one of the most challenging aspects of the role. If the company is on a track to get from Point A to Point B, and Point C is really the right direction, facilitating this shift throughout the company will be tough and necessary. Balancing the market information with the internal company processes and team characteristics will require a strong CMO leader to work with the rest of the team to facilitate an effective change and real long-term results. Thanks! Jon

#4 Interesting article.

Interesting article. Hopefully your write a blog post for CMOs' about not getting thrown under the bus. CMO's need lot's of friends both inside and outside of their respective organizations.

#5 Interesting article, even

Interesting article, even though I'm not a CMO type. You should write a blog post about "Not getting thrown under the bus as CMO." I've seen it happen time and time again. Fortunately having an established fan base assists them in landing on their feet.

#6 I like that title. I'll

I like that title. I'll explore this topic again.

#7 I just had lunch with a new

I just had lunch with a new CMO yesterday. He spoke of his stress in making a presentation this week to the executive team about his comprehensive marketing plan for the coming year...five weeks after he started the job! On the upside, he felt wide support for his recommendations, but one wonders whether that support is based on a real understanding of what will be required. Your insight on "riding and shooting" is right on. The balance between execution and strategy is a difficult one, with the potential to suck the CMO down into micromanaging of campaigns, vendors and executional decisions. That not only draws him/her away from strategic decisions, but makes the position seem tactical and service-oriented to the rest of the C-team.

#8 Just wanted to say how much I

Just wanted to say how much I enjoyed the article, as well as the give and take afterward with Pete. At the risk of stating the obvious (a personal core competency), a great CMO may choose to fill in gaps in the management team's combined skill set. For example, if the CEO is a strong strategic thinker, the CMO may contribute by reflecting the CEO's strategies in a clear and actionable way for the rest of the organization. On the other hand, if the CEO has a strong operational focus and realizes he/she needs help in figuring out long-term direction, the CMO adds even more value by becoming the chief strategist. The CMO's relationship with the head of Sales is another key opportunity to add just the right kind of value that balances out the management team. Thanks again for some much-needed clear thinking about the role of CMO's.

#9 Bob, that's an observation

Bob, that's an observation that matches exactly what I've seen in my career. Thank you for bringing it forward as a principle. The interest in this article has inspired me to pursue further explorations of this topic for Texas Enterprise. I also invite those with an interest in marketing and branding to submit blog articles for TxE. Your expertise is worth sharing! Visit http://texasenterprise.org/contributor-guidelines to start.

#10 Dave, You've captured the

Dave, You've captured the heart of the situation. Well done. I also agree with Vijay that a powerful CMO makes good for business. Or perhaps a good CMO makes for a powerful business. And with John, that the critical on-going role is bringing together insights to formulate the entire business strategy. I personally believe that CMO tenure is short because CMOs have a difficult time "riding and shooting." We have to do a better job of resourcing for the execution and measurement side, such that we are always able to pay attention to the strategic side. We have to simultaneously execute, measure and adjust based on new insights from the market, and not get caught up in simply measuring our performance. Thanks again Dave, Pete

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