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 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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