Frank Grillo (CMO of Harte Hanks) interviews Kimberly A. Whitler (assistant professor at University of Virginia’s Darden School of Business). The topic? Low CMO tenure and what to do about it.
Frank Grillo: A recent article by Kimberly Whitler and Neil Morgan entitled “Why CMOs Never Last” cites research which shows that CMOs have the lowest tenure in the C-Suite. It also references a survey that indicates CEOs have less confidence in their CMOs than other executives. Kim, what do you think is going on? Why are CMOs in trouble?
Kim Whitler: Part of the problem is that many CMOs are asked to perform a water-walking job. Oftentimes CEOs turn to their CMOs when they need to generate growth. They set high expectations for the CMO, but do not give the CMO commensurate authority.
If you look at what it takes to drive growth, it often requires multiple functional areas to collaborate and contribute. In many companies, growth is not a single-function responsibility. So, what tends to play out is that CMOs end up in high-influence roles. The expectations are broad (i.e., change the growth trajectory of the firm), but their authority is narrow, or limited to a single area such as marketing communication. The only way they can close the gap is through influence, or to encourage the other functions to support marketing-sponsored growth initiatives. This is what I call a ”water-walking” job.
Say the CEO brings in a new CMO from the outside. They join a functioning top management team. Interpersonal relationships and power structures are already established. Everybody knows their responsibilities and who has authority to do what. The CEO is hoping that the new CMO will make a big difference in the performance of the firm, but they don’t give the CMO control over all of the levers that are required to effect change. What tends to happen is that the CMO gets frustrated, they under-deliver versus the CEO’s nearly impossible expectations, the CMO is fired or leaves, and the cycle repeats. The result is that the CMO ends up with the shortest tenure in the C-Suite. And CEOs are largely frustrated with CMOs.
Let me give you an example of how this works. I received a job description from an executive recruiter for a very large higher education school. The overall job expectation for the new CMO, the first in the school’s history, was to change the ranking of the school. When I now show people see this job profile, they are enthusiastic. They see the job as exciting; an important, transformative role with tremendous responsibility. They think: who wouldn’t want to sign up for an important job like this?
Then I like to walk people through an exercise. I ask: What will it take to change the ranking of the school? Better faculty, better students, more money, better facilities, potentially better athletic performance, and so on. Then I ask how many of these areas would be under the CMO’s authority or control? The CMO will not control faculty hiring and firing, they will not control admissions, they will not control donations or alumni relationships, and they will not control athletic programs, etc.. They will not have control over most of the levers that are going to affect the school’s ranking. So, the conclusion is that the CMO is being set up to fail. Maybe there is somebody who could come in and effectively (and very quickly) influence all of these levers, but this is a nearly 100% influencing role.
After I thought about it, I told the executive recruiter that almost nobody could deliver what was expected of the CMO. The expectation far exceeded the CMO’s authority. They would need to influence everybody else in the school, and yet they would be the newest person in the C-Suite. About eight or nine months later, I was called by the CMO who took the job. He said: “I was told that I need to talk to you. I’m so frustrated. I don’t know what to do about this.” He did not know I had talked to the recruiter about the job. He was calling me because I do research in this area.
Frank Grillo: Marketing jobs are often described as high-responsibility, low authority positions. Isn’t this the classic approach to marketing job design?
Kim Whitler: The high influence CMO job design was a nice theory, but we need to accept the data and conclude that the theory was wrong. Low CMO tenure and high CEO frustration with CMOs speaks volumes. In some ways, the marketer-as-influencer role was a lazy way of dealing with a very complex job design and performance management challenge. Proponents of the CMO-as-influencer concept like to say, “We need people who can use influence and don’t need authority to get the job done.” I understand the attractiveness of the theory, but think about it. You have a C-Suite where most of the other players have been there much longer than the CMO (and in many cases, nearly a decade or more). But 57 percent of CMOs have been in their role less than 3 years. This makes the CMO like the organ transplant that is going to be rejected by the body. You have a functioning organization, you bring this outsider in, and you tell the outsider to grow the business primarily through influence. This is proving to be a formula for failure.
I once had a CEO say that if CMOs need authority, then they are in the wrong field. I asked the CEO if he was responsible for total firm performance. He said yes. I asked him if he would take the role if he didn’t manage the innovation arm of the company. He said no. I asked him why he wouldn’t be comfortable in a role where he was accountable for the consequences of innovation but didn’t have any authority. How comfortable would CEOs—or CFOs—or CIOs, etc. be in purely influencing roles?
Don’t get me wrong … the marketing role will always require a heavy dose of influence. But it comes down to where it fits on a spectrum. Right now, many jobs are being designed with too much influence and not enough authority.
Frank Grillo: How do we move beyond CMO job designs that rely on influence? What are some of the most effective ways to give marketing more authority or power to deliver results?
Kim Whitler: One important tool deals with the notion of horizontal alignment. It runs counter to the popular approach of using the same metric—for example, ROIC (return on invested capital) and EPS (earnings per share)—as bonus measures for everyone in the C-Suite. When the CEO’s direct reports all have the same performance measures as the CEO, I call this vertical alignment.
The problem with vertical alignment is that corporate-wide measures like ROIC and EPS are very broad. For example, ROIC, EPS and EBITDA (earnings before interest, taxes, depreciation, and amortization) are marginally impacted by marketing—of course this varies by company and industry—and are often less relevant than revenue, margin, or customer satisfaction/experience targets. The same is true for other major functional areas. There is very little line of sight between ROIC and Human Resources.
Horizontal alignment improves line of sight by setting bonus measures that are more function-specific. Even better, it places strategically inter-dependent functions on the same performance measures. Say a company has a major initiative that involves utilizing big data to create personalized customer experiences. We can use horizontal alignment to set performance targets for the initiative and reinforce marketing-technology alignment through the CMO and CIO bonus plans. Now two critical functions are explicitly tied to the success of the initiative rather than just marketing, and specific rather than general measures are used to track success.
Another way to avoid the CMO-as-miracle-worker problem is to place key functions under a single executive. So, if I look at growth, are there three, four, or five executives in the C-Suite who really drive growth? Then why not give one of those people responsibility for those three, four, or five areas or have one individual the growth levers?
Frank Grillo: Coke just implement something like that. They eliminated the CMO role and created a Chief Growth Officer. Essentially, they combined distribution and marketing together. Do you think that is a trend or the beginning of a trend?
Kim Whitler: Yes, Coke created a Chief Growth Officer. But they also have a chief innovation officer, a head of global initiatives, and a chief customer and commercial leadership officer. All four of these positions sit within the conceptual domain of the marketing concept.
My research shows that, over time, most large corporations have parsed the CMO role. They took the traditional notion of the CMO role and its broad scope and splintered it among multiple executives. The theory was that the narrower roles would become more feasible since the overall marketing scope had grown to be so large.
CMO role fragmentation is not working well. If the top marketing officer is basically in charge of advertising, and the individual business units each have their own CMO, but no advertising authority, then you don’t really have any CMOs who drive from a comprehensive strategic perspective. Or, if you split the CMO job among four C-Suite positions, no one is responsible for overall strategic marketing.
Frank Grillo: Some argue that the marketing concept is now a shared responsibility across the company. Everyone should be customer-focused, so we don’t need a CMO who manages all aspects of marketing across the whole company.
Kim Whitler: I’d actually contend that you need both. If a company really believes in being customer centric, then it needs a single group on the forefront of gathering the data, understanding how to access, analyze, and interpret that data, and then thinking about how to convert this knowledge into solutions that better solve customer problems. If you don’t have a highly sophisticated marketing organization and “everybody is doing marketing,” then is the accounting person, who is also a marketer, really a good marketer? It’s valuable when the entire company has a “market or customer orientation,” meaning that they have a fundamental belief and appreciation for focusing first on the customer. But that is different than expecting your accountants to become your marketers.
As a corollary, I’m working with Raj Venkatesan to look at companies that do a better job of developing an analytics competency. It almost always requires thought leadership from a more advanced analytics group / function supported by an entire company that embraces and uses analytics more effectively than their peers. It is both – specialists who keep pushing the boundary, and a firm that follows quickly. This is the corollary to developing superior marketing capability. Without somebody who focuses on staying at the forefront of marketing thinking, how will the accountant or analyst or HR rep or plant manager grow in their marketing-abilities?
Frank Grillo: My take-away from this conversation is that when a CEO does not delegate overall marketing responsibility to a single person in the firm, then by default they become both CEO and CMO. As the CEO makes the decision to fragment the CMO job, consciously or subconsciously, he or she assumes the CMO’s responsibilities. And that is a lot to add to the CEO’s plate, especially in a large corporation. They must also deal with investor and financial issues, acquisitions, and so on. If the CEO does not have someone pulling all aspects of marketing together and the fragmented functions fail to collaborate, then the CEO owns the failure. Firing one of the marketing executives for “insufficient influencing skills” and hiring a new one does not fix the problem, it perpetuates it.
We must also conclude that CMOs share responsibility for the fragmentation of their role in large corporations. In the earlier university example, that CMO should have tried to renegotiate the CMO job design or request horizontal bonus plan alignment among key positions in the C-Suite. Failing that, they should have declined the offer. If the expectation was for the CMO to increase the school’s ranking but they had no authority over the critical functions, or did not have horizontal alignment with them, then they should have seen the job was designed for failure. If CMO’s continue to take fragmented jobs, then there is a good chance that their tenure will continue to suffer.
Frank Grillo has also hosted interviews with other leading marketers. Here are two conversations with professor John Deighton of Harvard Business School:
- Who Drives Brand Meaning: The Marketer or the Consumer?
- Has Digital Marketing Evolved in Unforeseen Ways?
Grillo is the CMO of Harte Hanks. He is a passionate advocate for bringing the human back into marketing by better understanding and facilitating customer journeys.