Chief marketing officers (CMOs) have the power and credibility to influence key decisions of a company. But not all CEOs have great confidence in CMOs. The best CMOs are those who have collaborative partnerships with their CEO and other executives, research indicates. There is also optimism about an increasing role for CMOs.
Chief marketing officers often don't stay long at a company. They have the shortest tenure of anyone in the C-suite and it is even getting shorter, Forbes writes. According to a report by Spencer Stuart average CMO tenure shrank to around 40 months versus 80 months for the CEOs who are hiring them.
What is reason many CMOs leave a company and how does this influence the final business results? How can CMOs get more involved? The Boathouse Group, a marketing agency and consultant group, held a survey in 2021 among 3000 CEOs from 13 industries. The researchers wanted to capture the perspectives of CEOs on the role of the CMOs.
CEOs: too much marketing jargon
The report concludes that around a third of the CEOs have great confidence in their CMOs. More than half of the CEOs (58%) believe that key issues with their tenure are the lack of speaking the language of the business and using too much marketing jargon. 56% of the survey respondents believe the CMO is more committed to themselves and personal gains versus the CEO or board.
The good news is that 86% of the CEOs believe that CMOs have the power to influence key decisions of the C-suite, the executive-level managers within the company. A majority of 63% of the survey respondents describe CMOs as 'performance minded', whereas 58% said CMOs understand the business and shareholder goals of the company.
Vodafone Business: marketing at crucial intersections
In practice there are many examples how a CEO and CMO can work very well together. "It is amazing to have a CEO who considers marketing important," says Iris Meijer, CMO at Vodafone Business in a video talk at the Institute for Real Growth together with CEO Vinod Kumar. At the company they regularly meet one-on-one, and always stay in touch about what is going on. The most important is to align what to expect from marketing and especially the CMO. "Marketing plays a crucial role," CEO Kumar explains. "I see marketing sitting at two very important intersections: at the intersection of external and internal views, and at the intersection of our products and the channels to market. So, marketing is sitting in the middle. It is essential to moderate the traffic and make the communication flow well."
Kumar is aware that marketing is driving the commercial outcomes of the company. "There is a crucial role that marketing plays. What the marketing organization needs to keep in mind is how do you leverage this position when you are sitting in these intersections to drive commercial outcomes that are aligned with the overall strategy and the financial objectives of the company."
One of the key words is trust. CEOs often don't fully trust their CMO, as research indicates. CMOs say that they can't always count on their CEO. "A CMO doesn't need to be a sort of 'yes man, yes woman', but marketers need to appreciate that the CEO sets the vision for the company," says Anthony Kennada, CMO at virtual event platform Hopin, during a SaaStr event. "It is not about humbling ourselves, it is about winning together and building that relationship in that dynamic between the marketing leadership and the CEO. One of the best gifts a CMO can have is a great CEO who is visionary and thrives on being out in front of customers."
Blurring the lines, breaking down silos
It still happens that marketing and other departments are organized in separate silos. Breaking down the silos helps companies to be successful. It implies a cross-functional type of behavior and organization. "Growth is a team sport. It means that the subject of growth really requires sales, marketing, services and executives to all be working together," argues Bill Wohl, founder of Wohl Communications, in a video interview with CxOTalk.
The pandemic has accelerated blurring the lines between departments. "Sales leaders are being aggressive about demand targets and feel they should set them for marketing, whereas CMOs believe they have a responsibility to be appropriate about demand levels. Service departments are suddenly carrying revenue targets. The CMO has to really be a person to promote internal alignment around those targets. If those folks are not working well together, then the tension will slow down the pace of growth."
When CFOs dictate the marketing of a company
Not only the CEO, but also the chief financial officer (CFO) plays a crucial role in the work of the chief marketing officer. During the pandemic there has been a shift from in-person events to online events, to virtual events. What about the impact on CMO marketing budgets? "CFOs have had a bit of a challenge trying to manage the balance sheet. One of the techniques they have used almost universally is to claw back a lot of marketing dollars. They are exceptionally hard to get them back," Wohl recounts.
CMOs are trying to get back their level of spend as business is growing. "The challenge is that most CFOs are looking them straight in the face and say: 'Hey, we managed to do pretty good with your budget at that level. Why does it suddenly need to get back up? I think CMOs implicitly understand that investment has to return, but clawing back those dollars from CFOs is a major challenge."
McKinsey: marketing's moment is now
There is also optimism on the horizon. According to an earlier McKinsey report a change has started within the C-suite. The CEO, CFO and other executives are becoming more aware of the prominent role marketing plays. In the report consulting company McKinsey states that executives of leading companies no longer view marketing as bound by functions within the marketing department. In this model diverse areas of an organization – from sales to product innovation – participate in marketing's success and see themselves as partners. The report distinguishes CMOs as unifiers (with collaborative partnerships and therefore successful), loners (sometimes great marketers, but without deep connections with their C-suite colleagues) and friends (somewhere in between the unifier and the loner). McKinsey concludes that the ability of the marketing department to drive growth much depends on how CMOs are able to cooperate with others in the organization.
The best CMOs adopt the mindset of their C-suite colleagues and make sure the CEO understands how marketing is driving growth and serving the broader goals of the company. These CMOs bring insights of the customer journey into a picture of opportunities that the CEO and CMO further translate into short- and long-term initiatives. The CEO and other leaders of the C-suite need to see a CMO partnership as an opportunity for driving growth, as the report states.