The very definition of the term “CMO” is a problem for marketing executives.
There are three types of marketing professionals in an organization. The CMO’s role depends on the CEO’s perspective, says Vijay Mahajan, a professor of marketing at The University of Texas at Austin McCombs School of Business. You’ve got Marketing, Sales, and Communications. They’re not all the same. The CMO’s position within the company has a huge impact on the CMO’s ability to influence key decisions.
Mahajan defines CMO Power as the ability of the CMO to influence the allocation of resources and other strategic decisions in the top management team. He says that it’s not just about personal strength or leadership style. I’ve seen dynamic, smart executives fail in the CMO role when the position itself isn’t structured to be powerful.
Pete Hayes is the principal and CMO of Chief Outsiders. Hayes says that CMOs often get stuck in a communications role rather than one at the core of their business. If you only talk about the products that have been developed, that is just a shiny facade, and the rest will not value that.
According to a widely discussed 2004 study by Spencer Stuart, failure is endemic in the CMO suite. The average tenure for chief marketing officers was less than two years.
The Case of a Strong CMO
Mahajan says that a powerful CMO is good for business. He says that a CMO must be part of the top management, as he is the consumer advocate and the person who looks at the long-term success of the business. He argues that the CMO should have the power to make strategic decisions and be directly tied to revenue generation.
The CMO’s role is to provide actionable insights. The entire company’s strategy is based on customer insight and competitive insights. “If Marketing doesn’t do it, no one else does,” says John Ellett, CEO of nFusion, a former senior executive at Dell Inc. who interviewed nearly 50 CMOs in the United States.
What is the Power of a CMO?
Ellett emphasizes that CMOs must make their 100-day period count by gaining peer support. This creates power. “Focus on first building relationships, enrolling leaders and engaging them.”
Marketing executives who don’t possess the necessary power are often unable to implement the business and brand transformations that they have envisioned. Ellett says that the savvy CMO needs to be clear on expectations, sell changes to be made, and explain how they will be involved with strategic business decisions.
In their most recent study, Professor Mahajan and coauthor Pravin NATH identify four other ways CMOs can achieve power.
- In times of instability, the top management team can better understand the CMO’s perspective on the consumer and the market. Hayes says that “vision needs to be articulated.” What’s happening in your business? How would you describe your sales organization? What is your marketing strategy? What are your gaps in expertise? “A smart CMO will be able to play in the middle.”
- Lead innovation. “The secret to success is to be able to position oneself as an agent for transformation,” Ellett said. We’re talking business, brand, or execution change. If the CMO is able to align with the C-suite, they will be successful.
- The CMOs can’t feel appreciated when other members of the executive team believe they are better at marketing. Mahajan says that it’s rare for there to be other marketing professionals on a team. You will often find sales managers and product developers who have a marketing perspective. They think, “Why should we listen to you?”
- Assume responsibility for the bottom line of sales. Marketing is generally given long-term commitment rather than quarterly results. Mahajan says that if the CMO is also responsible for sales, then he has both a short-term and long-term perspective. He won’t create an opportunity his team will not pursue. Mahajan discovered that CMOs who were responsible for the bottom line of sales had more power than marketing and communications executives.