Why Chief Executives Run Out of Patience with Their CMOs

Setting clear expectations with the entire C-suite is more important than ever

By Chris Warren

Keith Negley/theispot.com

A recent study of 150 CEOs of the largest companies in the U.S., released by the consulting company Boathouse, paints an ominous picture for chief marketers struggling to improve their relationship with their CEOs: Only about a third (34 percent) of chief executives have great confidence in their CMOs, while 56 percent believe their CMOs are committed to themselves more than their CEO and board of directors and 70 percent of CEOs believe their CMOs would save their own rear end before considering the CEO.

The study, released last summer, also found that nearly 60 percent of CEOs believe CMOs speak their own language rather than speaking in terms the CEO and CFO can appreciate. Adding insult to injury, a whopping 80 percent of CEOs surveyed for the report think CMO turnover is due to a CMO's own failings.

Given their tense relationship with the boss, it's little wonder that CMO tenure is on the decline. According to executive search firm Spencer Stuart's latest "CMO Tenure Study," CMOs at 100 of the most advertised U.S. brands lasted an average 40 months in 2020, the lowest tenure has been since 2009.

The downward trajectory in the average CMO tenure comes amid rapid and structural change related to the CMO function itself, including the rise of chief purpose officers, and the growing and somewhat foreboding trend of mega brands like Bank of America and General Mills getting rid of the CMO role altogether.

CMOs need to change their lot. "It is critically important to reverse the trend of shorter tenures of CMOs because they are leading the growth agenda and transformation takes time," says Janet Balis, marketing practice leader at ANA member EY Americas. "An effective CMO today will connect the dots across the full customer journey through both data and digital transformation. Those efforts certainly have quick wins, but they are not short-term initiatives and shifting leaders comes at exceptional costs to the business."

A Misunderstanding of the Role

Although it sounds rudimentary, CMOs need to treat their role as a businessperson first and marketer second. Matthew Lieberman, CMO at ANA member PwC U.S. and Mexico, continually asks his team members to answer a straightforward question: Does their work propel the company's overall business objectives? "I ask all of our marketers to consider if they can demonstrate results for a planned activity," he says. "If they cannot, we need to reevaluate."

PwC has implemented structural changes to ensure that marketing directly supports the company's business objectives. For example, Lieberman reorganized his marketing team to include staff members from other PwC departments, including marketing and communications, sales, creative, and digital teams, as well as representatives from individual business units who work together on specific campaigns.

For example, PwC's environmental, social, and governance (ESG) team expressed the need to create ESG insights catering to specific industries and the challenges they face.

Working with other departments, the ESG team developed a web experience that clients can use to find relevant content and services while a separate effort created Tech Effect, a digital guide covering business technology.

Despite their reservations about CMOs, nearly half of the CEOs say the most critical role of a chief marketer is to grow the business, the Boathouse study found. Furthermore, 86 percent of CEOs believe that CMOs have the power to influence key decisions in the C-suite and 34 percent of CEOs have great confidence in their CMOs.

"What are they doing right? What enables them to have confidence?" says Kimberly Whitler, the Frank M. Sands Sr. associate professor of business administration at the University of Virginia's Darden School of Business, who co-authored "Why CMOs Never Last" from Harvard Business Review. "Are they hiring better and meeting more often and supporting their CMOs?"

Whitler disputes the general notion that CMOs are flailing, and says CEOs often set up false expectations. "A company could have oversold the job and expects the CMO to do things they have no decision rights over, or the CEO doesn't set up the C-suite to accept the CMO," she says. "A common problem is the CEO will say, 'You are our savior, CMO, solve our growth problem.' But the rest of the C-suite rejects the CMO."

When Whitler interviewed for the CMO position for a homebuilding company, she asked the CEO what success looked like. The CEO scoffed at the question but Whitler pressed him, understanding that if he didn't know what he wanted the likelihood of her failing would be high. After clearing the air, Whitler and the CEO worked together to define success, with a strong focus on meeting the needs of the company's five regional presidents.

The Cost of Not Showing Value

For Balis, every C-level executive is responsible for precisely defining the CMO's role and supporting his or her efforts in earnest.

"The key is to scope the CMO role clearly and empower it as a core function in the C-suite," Balis says. "To drive more growth, ideally, the CMO should be a direct member of the C-suite — in the inner circle of the CEO — with a very high degree of influence over the key drivers of the customer agenda, including data, analytics, and digital, far beyond the traditional marketing functions."

Balis cites a soon-to-be released EY survey of 600 senior executives as evidence of how much work is cut out for the C-suite at large when it comes to bolstering CMOs' performance.

Asked who was responsible for approving investments in digital engagement technologies, the survey found that roughly 25 percent of respondents said it was the CEO, CTO, or CFO who made that call; only 5.5 percent said it was the CMO. "The fact that the executive closest to the customer zeitgeist, the CMO, has the least decision-making power is telling," Balis says.

Nevertheless, the onus is on CMOs to evolve their role internally, such as getting much better at leveraging technology to demonstrate how marketing contributes to the top and/or bottom lines. "Use technology to demonstrate this value," Lieberman says. "I'm not suggesting building entirely new or huge martech [marketing technology] stacks, but, rather, being more strategic around which technologies will allow you to meet your company's goals."

He adds that artificial intelligence and data analytics can prove that marketing can have a financial impact, help build brand equity, and be used to course-correct if things don't start to gel fairly quickly. "Being able to show marketing's value and how it fits into the overall business strategy is now a must-have for every marketer," Lieberman says.

 


 

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