The Fall and Rise of the CMO

Why do some CMOs achieve success and longevity while others fail and leave?

That’s the question Stratey+Business asked and answered in their recently published article, “The Fall and Rise of the CMO.”

Click here to download a PDF of the article or scroll below to read my excerpted abstract.

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As large corporations redouble their efforts to find more profitable paths to growth, they’re looking for strategic and operational leadership from the marketing organization more than ever before. The result is the increasing prominence of a senior executive whose title didn’t even exist 10 years ago: the chief marketing officer, or CMO

CEOs have recruited CMOs as direct reports to bolster their marketing bench strength. Particularly when reputation risk is a major concern, the CEO needs a single person to whom he or she can turn in the event the corporate brand (or a prominent brand owned by the company) encounters a crisis.

Now that firms have reengineered manufacturing and supply chain processes to cut costs, there is a natural desire to make marketing more effective, too. Companies are looking to CMOs to make marketing more effective by:

Showing creative marketing leadership in differentiating a company’s brand(s) from competitors

Strengthening brands through integrated communication strategies

Better understanding customer’s buying preferences and link that knowledge to the delivery of products and services that are more relevant to customer needs

Containing costs in media expenditures, marketing services procurement, and market research

However, the track record of CMOs, so far, is mixed. According to a recent study by the global executive recruiting firm Spencer Stuart, the average tenure for CMOs is only 23 months.

Although the CMO role is currently in vogue, many firms create this position without clearly defining the need for it or giving enough thought to the problems the CMO is meant to solve. Our (Booz Allen Hamilton and the Association of National Advertisers) research, supported by that of others suggests this is a recipe for failure.

In the complex modern corporation, the CMO role is relatively new and needs more time to develop. The success of CMOs at such leading companies as IBM, Pepsi, UPS, and P&G helps the cause by providing templates for how the role can be integrated into existing organizational structures. Our research shows there are different types of CMOs, with different roles, responsibilities, required skills, and organizational status, appropriate for corporations with different organizational and marketing challenges. Understanding these differences and the needs for your organization is a central ingredient in shaping the role of the CMO.

Every company needs to assess the marketing tasks that must be performed in order to ensure competitive success, and the alternative organizational approaches necessary to get them done. CEOs must be especially sensitive to organizational structure and personality fit within the company before selecting a CMO, especially when considering candidates from outside the firm.

For those firms that have already experienced a high churn rate and have, in effect, created a ‘revolving door’ for the CMO, in all likelihood, there is little hope for the role unless top management changes its ways. However, a CMO who fits well culturally within a firm, has a clear mission, and possesses the right skills can have a transformational, far-reaching effect on the way the company performs the marketing function.