What do you want from me?

Transcription

1 Chief marketing officers face many challenges today from the pressure to deliver results to the need to keep pace with the explosion of digital technologies and the dramatic changes in the way consumers want to interact with brands. At the same time, few senior roles are as open to interpretation and redefinition by others in the organization as the CMO s. In this environment, one of the most critical success factors for CMOs is the ability to grasp and manage the evolving expectations they face. Spencer Stuart set out to learn more about how the expectations on the CMO are changing during our annual CMO Summit. The event included an expert panel of marketers who talked about the expectations they face and how they build and nurture the relationships they need to excel in the role. We also had discussions with senior business and functional leaders about what they want in a CMO and where marketing sometimes falls short. Finally, we surveyed more than 200 marketing leaders about the CMO s priorities and how the CMO is viewed by other senior leaders in the organization. Drawing on these perspectives, we look at what it means to be a high-performing CMO today and how marketing leaders can improve their overall effectiveness in the role and make a noticeable difference in the business.

2 The CMO agenda The CMOs of most companies have a lengthy agenda: grow market share, control marketing costs, acquire new customers, retain high-value customers, increase brand awareness and lead the charge into new areas, such as social media and other digital technologies, to name just a few. Nevertheless, three areas emerged during our discussions as the major priorities for the CMO. Driving growth CEOs want and, importantly, expect revenue growth from their CMOs, but this is more difficult than ever in today s complex and uncertain climate. Now, it s all about growth. The environment has evolved so dramatically over the last few years that our CMOs are asked more than ever to figure out how the marketplace has changed: how consumers adjusted their preferences, what the risk tolerance of clients is and how this has changed, what customers are willing to pay for and what they are not. This has huge implications for new product development, go-to-market strategies and pricing and everything else in the marketing mix, said Stefan Linn, managing director of TPG Capital. Great CMOs understand the customer. They can imagine the future and understand what the world might look like three to five years from now. If you believe the CMO should be the accumulator, aggregator and understander of customer data and be the one to conduct market research, then yes, the CMO needs to incubate and imagine the future and the new products and services. A key role the CMO can play in growing revenue is guiding the organization through a disciplined process that focuses resources on the best opportunities, said Joe Tripodi, chief marketing and commercial officer of The Coca-Cola Company. Given the complexity of most global, multi-product companies today, it can be easy for organizations to be distracted by too many opportunities, what he calls margin dilutive complexity. The CMO s role is getting the company to understand where the opportunities are, taking a very strong and upfront strategic approach so that the company invests where the opportunities lie and where the company has the capability to win, he said. Taking the lead in innovation In more companies, the CEO is looking to the CMO to take charge of the innovation agenda. Drawing on their knowledge of customers and ability to listen to the faint signals in the marketplace, CMOs are expected to guide the organization s innovation efforts to drive growth. One CEO, the head of a U.S. credit card business, views exceptional CMOs as chief imagination officers, who can propel the innovation and growth agenda. Great CMOs understand the customer. They can imagine the future and understand what the world might look like three to five years from now. If you believe the CMO 2

3 should be the accumulator, aggregator and understander of customer data and be the one to conduct market research, then yes, the CMO needs to incubate and imagine the future and the new products and services. At the same time, organizations must have a process for learning from the inevitable mistakes that will occur in an innovative culture. As a CMO, you ve got to be able to figure out how you shorten the learning loop and share that wisdom from your failures as much as you share your knowledge from your successes. That s the kind of culture and environment a CMO has to create in a company. CMOs also have an important mandate to create an environment where innovation can genuinely flourish. This may require new team members, a different allocation of resources and an entirely new tolerance for risk. It can t be just the CMO who s the innovator or driving innovation; it needs to come from an environment that allows people to feel that they can be innovative or can collaborate around an idea, said Maureen McGuire, CMO of Bloomberg. Another important role for the CMO is to lay down the cultural challenge to the organization to accept risk and occasional failure as an important part of the innovation process. We re lucky at Google because we have an experimentation atmosphere, so failure is a data point more than it is a failure, said Andy Berndt, a vice president at Google and head of its Creative Lab. The scientific approach is hugely beneficial and is a tone set from the top. At the same time, organizations must have a process for learning from the inevitable mistakes that will occur in an innovative culture. As a CMO, you ve got to be able to figure out how you shorten the learning loop and share that wisdom from your failures as much as you share your knowledge from your successes. That s the kind of culture and environment a CMO has to create in a company, said Tripodi. Serving as an agent of change CMOs need to be at the forefront of a host of changes impacting companies today, including advancements in technology, changing customer expectations about companies and brands, and emerging competitive threats. With the evolution of new media and social networking, companies have to figure out how out to connect with consumers and allow them to be part of the brand rather than just being communicated to about the brand. They will have to master analytics to better understand customer behaviors and develop insights to inform decision making related to customer acquisition, customer relationship management, product and service development, pricing optimization and marketing spending. All of these developments are likely to have significant implications for companies and how they operate. Skilled marketing leaders who can recognize trends, bring in new ideas, serve as the voice of the customer and facilitate the cross-functional conversations necessary to drive change are in the best position to champion many of these initiatives. 3

4 Over the years I have seen many CMOs who are great business people, but they don t know how to push the organization enough. In companies like ours, the marketer absolutely needs to be the one to drive the enterprise or nothing happens. I tend to like the big thinkers who are comfortable enough to say: We have an idea here, we do not have enough data to support it yet, but here s how it could play out, said CJ Fraleigh, executive vice president and CEO of North America Retail and Foodservice for Sara Lee. So, how can CMOs really improve their effectiveness in the role? The CMO s remit from the CEO and management team is much broader than creating winning advertising campaigns, argues Tripodi. They want the CMO to be the chief growth officer of the company. They want the CMO to drive cultural change, and they want the CMO to build capability with people, he said. It s absolutely an imperative to engage with your colleagues, engage with your associates, and particularly your peer group, across the enterprise and really get them to understand that you are not the hero who s going to come in and save their Survey Snapshot 51% of survey respondents said driving top-line revenue growth is a top priority for the CMO or head of marketing. 75% of CMOs meet daily or weekly with the CEO 76% said the CMO reports to the CEO or is a member of the executive management team 69% said the CMO is viewed as a strategic partner by the other functional heads and senior business leaders The top three priorities for the CMO: Driving top-line revenue growth (51%) Increasing brand awareness (42%) Acquiring new customers (29%) How often does the CMO meet with the following executives?* CEO: CFO: CIO: Top Human Resources Leader: Sales and Distribution Leader: 20% 55% 17% 3% 2% 3% 8% 42% 31% 7% 8% 4% 6% 35% 30% 11% 12% 6% 6% 35% 35% 13% 7% 5% 25% 45% 17% 7% 3% 4% daily weekly monthly quarterly less than quarterly not sure * Some totals may not equal 100% due to rounding. 4

5 business. Unless everybody is rowing in the same direction and moving toward a common goal, you re not going to be successful. To do this, CMOs must do several things well: > Get the marketing mandate right > Build meaningful relationships with functional and business leaders > Agree on how to measure success > Collaborate with external partners > Cultivate the best talent Get the marketing mandate right: Forge agreement with the CEO on the objectives CEOs don t like surprises. So a critical element of CMO success is aligning expectations for marketing with the CEO and keeping the CEO and management team informed about important issues and unexpected developments that could impact the marketing program. CMOs demonstrate marketing s ability to contribute to business strategy by providing solutions to the problems of the company, and avoiding the tendency to speak in the language of marketing. Oddly enough, my advice to marketers is don t talk about marketing. Bring the CEO ideas that can make the business better or solve a problem, said Berndt. Sometimes you just have to drop all the marketing talk and just say, Where does the business hurt? Then, we can do all the marketing stuff behind the scenes. McGuire agreed. It s about creative ideas bringing good ideas to the table and thinking about the business both in terms of where it hurts and how marketing can help fix it, she said. To do that, a marketer has to be able to look at the business holistically. Build meaningful relationships with functional and business unit leaders At an organization s most senior level, the most important constituents for the CMO are his or her peers. Other senior leaders look to the CMO to be a thought leader on the businesses critical issues. They want the CMO to learn how other functions and businesses work and what their challenges are and be willing to engage them early in the development of marketing plans. I want my CMO to be sincere about enabling cross-functional success; he s in a position to tear down walls. Get out of the office and spend time with customers, at the factory, attend the national sales meeting. Take an interest in other functions, said the president of U.S. sales for a consumer products company. A dose of humility when working with other functions also helps, said Berndt. As much as possible, try to understand where they re coming from and make them the hero. Come in humbly and say, You make great things. I can help you tell the world about them. Let s figure out how our skills are complementary. 5

6 Agree on how to measure success Marketing leaders face more pressure to demonstrate the business value and effectiveness of marketing programs and spending. While it s always been challenging to assess the impact of marketing on business performance, today there is a growing expectation that specific activities can be measured and the marketing activities connect back to purchase intent. This requires the development of new metrics and research to prove the case that these are key variables for generating revenue. Tripodi advises CMOs to make the CFO a partner in their leadership teams as they develop marketing budgets and metrics. Unless you have full transparency on everything going in your budget, you re going to continue to have this marketing-as-a-black-box philosophy. Once you bring people into the tent and then say, Listen, we have nothing to hide here, and jointly determine the metrics for measuring marketing effectiveness, you take marketing out of the little black box, he said. Engaging other leaders in the development of metrics and objectives also can help avoid misunderstandings when it is time to evaluate the success of marketing initiatives. Every marketer has had this kind of experience: You want to run an advertising campaign to raise awareness and then everybody s looking for leads and revenue and you say, well, the metric Oddly enough, my advice to marketers is don t talk about marketing. Bring the CEO ideas that can make the business better or solve a problem, Sometimes you just have to drop all the marketing talk and just say, Where does the business hurt? Then, we can do all the marketing stuff behind the scenes. to measure this is whether or not we actually raised awareness. But people are saying, How many leads did it drive and how come my phone wasn t ringing off the hook? One of the most difficult things to convince people of is that you should measure your marketing effort according to the objective that you re setting, said McGuire. Collaborate with external partners In many industries, external partners are becoming more important to an organization s success, and marketers need to understand how the rules of the game have changed and adapt. Retailers, for example, have consolidated and grown stronger, and they now have more influence with consumers and more clout with consumer goods companies. Today, consumer goods company marketers have to be willing to collaborate with retailers in a way they did not have to in the past. Marketers need to recognize retailers play a large role in the health of and equity in a brand; they ignore this at their own peril, cautioned the chief customer officer of a consumer products company. Other key external partners for the CMO are the company s major advertising and marketing agencies. The best agency relationships are built on a sense of trust, shared knowledge of the business and respect for the people on the team. There may not be a major difference between what the different agencies do, but the team that is 6

7 working on your business will be different. The chemistry that you build with that team and their ability to get fired up about what they re trying to do and bring in new ideas is what counts, said McGuire. Cultivate the best talent The best leaders surround themselves with talented people representing a broad diversity of perspectives. They create an environment where individuals demand the best from each other and push each other to make better decisions. This leadership capability will become even more important going forward as marketers face challenges requiring fresh thinking and new approaches. Identifying, attracting and developing talent is critical not only to building an effective marketing team but also because many organizations look to the function to cultivate talent who can feed the rest of the organization. Marketing can be a fertile ground to develop technical and general business skills. Marketing is a great place to expose talent to the future of the business. It s the talent development incubator. A good CMO protects talent and especially the game-changers, said Pat Dailey, former chief administrative officer and chief human resources officer for Herbal Life. Development of people is a daily task. You have to do it every single day. It s about coaching people through the process, helping them to understand the business and what s good or bad about the work that they ve done at the moment. To do this effectively, leaders must be willing to invest the necessary time to coach members of their team through informal conversations and ongoing feedback on what they re doing well and areas to improve. Development of people is a daily task. You have to do it every single day, said McGuire. It s about coaching people through the process, helping them to understand the business and what s good or bad about the work that they ve done at the moment. Tripodi advises CMOs to break down the walls between senior members of the team and high potentials and avoid the deification of senior marketing leaders. Get to know junior marketers on a casual basis, have a lunch a couple times a month with people in your group and cross-pollinate people. It s the little things that make you accessible, he said. Large global companies such as Coca-Cola often have formal programs to rotate people into different roles and different parts of the business, but informal collaboration with people across the business can broaden an individual s perspective on the business as well. One of the things we tell people is, Go introduce yourself to everyone. Find people who are interested in the same things you are. Just go say hello and go have coffee and go, go, go, go, go. A lot of what happens at Google is sort of a loose confederation of people coming up with little ideas with people they meet, said Berndt. CMOs are on the hot seat today in ways they never were in the past. More and more, the CEO and senior management team are looking to the CMO to be a major force in driving revenue growth, innovation and organiza- 7

8 tional change. This represents a fundamental transformation in the CMO role, one that is forcing the CMO to focus less on the traditional priorities of marketing. As expectations on the CMO evolve and grow, an important consideration for organizations is how to structure the CMO role to be effective given the current charge. In our survey, CMOs who report to the CEO and are a member of the executive management team are more likely to be seen as better at driving change across the organization and delivering significant impact on the company s top-line growth and strategic direction than those who do not. A reporting structure in which the CMO reports to the CEO not only reflects the importance of the CMO role to the organization, but positions the CMO to be more effective. The most successful marketers will immerse themselves in the business, understand the needs and challenges of the functional and business leaders and forge successful internal and external partnerships. They will also press for an organizational structure that positions them to be most effective. About Spencer Stuart Spencer Stuart is one of the world s leading executive search consulting firms. Privately held since 1956, Spencer Stuart applies its extensive knowledge of industries, functions and talent to advise select clients ranging from major multinationals to emerging companies to nonprofit organizations and address their leadership requirements. Through 51 offices in 27 countries and a broad range of practice groups, Spencer Stuart consultants focus on senior-level executive search, board director appointments, succession planning and in-depth senior executive management assessments. For more information on Spencer Stuart, please visit Spencer Stuart. All rights reserved. For information about copying, distributing and displaying this work, contact permissions@spencerstuart.com. Sign up to receive publications in your areas of interest via or RSS by visiting 8