I was at a dinner recently where the CEO of a technology company mentioned he was slashing his marketing budget significantly. He asked if I felt marketing was “dead” in this troubled economy. Marketing isn’t dead and neither are Chief Marketing Officers, but some may be turning into the walking dead. The reality is the marketplace is showing a strong need for CMO's to evolve or they face a fate worse than death - irrelevance.
The CEO knew his CMO would be unhappy but he felt this was a condition of a wavering economy that he could not avoid. He elaborated, “Growth is challenging and I think our marketing has been dead for a while so we’ll wait to see some improvement in the market conditions. Once we grow a bit, we’ll start the marketing efforts back up”. Unfortunately, he clearly was unable to connect the impact of his CMO’s marketing efforts and the growth he was seeking.
It is often discussed how CEO’s have an expectation that marketing initiatives carry a direct ROI but these expectations also exist beyond the CEO. Corporate Boards are becoming increasingly vocal about branding strategy and how their business can grow. Boards are fundamentally changing and are fast embracing the digital age. In an excellent article published recently by Heidrick & Struggles’ own Lee Hanson and Lynne Seid “Adding Digital Expertise at the Board Level”, the authors discuss the heavy emphasis currently on CMO's to step up and help the board and new digitally oriented Directors solve this dilemma.
There is a very clear effort throughout nearly every industry to find CMO talent that can impact a business in a much more direct and relevant way. Certainly CEO's and BOD's are seeking marketing executives who know how to create, brand, segment, and launch products as well as implement the requisite social media outreach campaigns and all of the more traditional types of customer-centric marketing strategies but these are now "check the box" competencies. The real value comes in the CMO who knows how to move the revenue needle. In high demand are the executives who have experience and a demonstrated ability to monetize the marketing strategy directly. CEO's are now asking:
- How would your marketing initiative actually increase sales?
- How do we find new customers and make sure they are profitable and accretive?
- What level of net new growth in revenue can we expect?
The demand is high for CMO's who are willing to show a plan that can contribute directly to top line improvements along with a willingness to be held directly accountable.
Obviously, this is not easy to do. On the one hand, market data is more available than it has ever been but how intelligent is that data and how can it reveal increasing sales potential? Companies can get to many more corners of the globe than they ever have, but what happens when they get there? Every company has a badge for FB, Twitter, etc., but how many companies can point to new revenue as a result? CMO’s must be able to answer the CEO or Chairman when they are in the elevator (or worse in the Boardroom) when the question "How have you made us money?" is asked.
The demand for strong new CMO leadership is high. These leaders must be willing to partner with the business more than they ever have before and more importantly, contribute to the business in a relevant way. Specifically, CMO's are being challenged to generate tangible financial results. But these leaders need to be willing (and able) to boldly go where they often have not gone before. No CMO wants to talk about the wonderful things marketing is doing only to be answered by the question "So what?" and not have an answer.