In the July-August issue, Harvard Business Review published a series of articles under the title “Why CMOs Never Last.” As we passed the articles around the office, they sparked some interesting conversations – and helped clarify our agency’s point of view on the role of the Chief Marketing Officer (or lack thereof) when it comes to small business marketing.
Part 1: Who Owns Marketing?
Before we look at the CMO question through the lens of small businesses, let’s start with some context.
“The Trouble with CMOs”
HBR’s look at CMO problems starts from the premise that CMO tenures are troublingly short. This is not a new phenomenon. Business analysts have been noting the short tenure of CMOs for decades, and in fact, as the Wall Street Journal reported in a 2014 article, the average CMO tenure actually improved from a low of 23.2 months in 2006 to 45 months in 2013. Back in 2004, Strategy+Business wrote about the “fall and rise of the CMO”, highlighting a 120-company interview that pointed to high expectations combined with low skill and empowerment leading to rapid turnover.
The recent articles from HBR are in part framed by a 2012 global survey by the Fournaise Marketing Group, which revealed that 80% of CEOs don’t trust or are unimpressed with their CMOs. (The same study showed that only 10% of the same CEOs feel that way about their CFOs and CIOs.) In separate surveys conducted by authors Kimberly A. Whitler and Neil Morgan, HBR notes that 74% of CMOs say they believe their jobs don’t allow them to maximize their impact on the business.
On top of these unflattering data points, the HBR authors reference a 2017 analysis by Korn Ferry, which revealed that CMOs stay in office for an average of 4.1 years, while CEOs average 8 years; CFOs, 5.1 years; CHROs, 5 years; and CIOs, 4.3 years. According to the authors’ own research, 57% of CMOs have been in their position three years or less.
Clearly, while CMO tenures have seen some improvement, there’s still a long way to go.
Why the Short Tenures?
The authors argue that the high churn and low satisfaction is due in large part to a fatal disconnect between CEO expectations and CMO responsibilities. In the authors’ own words:
“We believe that a great deal of CMO turnover stems from poor job design. Any company can make a bad hire, but when responsibilities, expectations, and performance measures are not aligned and realistic, it sets a CMO up to fail.”
As the article notes, there are three types of CMO roles that have generally been accepted for years:
- Enterprise-Wide P&L Role: Delivers profitable growth by designing strategy and overseeing commercialization. Responsible for innovation, product design, sales, distribution, pricing and marketing communications.
- Strategy Role: Designs growth strategy. Responsible for innovation, customer insight and analysis, and product design.
- Commercialization Role: Spurs sales through marketing communications. Responsible for advertising, digital content, social media, promotions and events.
In addition to the common misalignment between these roles and the authority and responsibilities actually granted to the CMO, the dynamic is further complicated by the fact that the CMO skillset continues to evolve as marketing tactics change at a rapid pace and lines between marketing and technology blur. Meanwhile, the CMO will inevitably be held to one standard that’s present in pretty much any company: figure out a way to get the product/service out the door – or you’re going to find yourself out the door.
The article walks through the steps for determining which type of CMO is appropriate for your company, aligning metrics with expectations and finding the right candidate for the role. If you’re at a small company, this discussion might raise an important question.
What if You Don’t Have a CMO?
At the small business level, there’s a good chance you don’t have a CMO. Depending on how you’re scaling, you may never have one. And that’s not necessarily a bad thing – there are plenty of reasons why that title might not be a fit for your organization. Culture and organizational factors aside, hiring a new employee at the executive level could take months, and as we’ve seen, their chances of staying long are slim.
But, if there’s no CMO, that means someone else needs to “own” the roles that your ideal CMO would fill if you had one. Depending on your company, that might be someone internal – like the CEO, or the Director of Sales or Marketing – or it might be an outside party such as an outsourced agency or consultant.
Whoever it is, they need to know what specific responsibilities they’re accountable for and how success will be measured. Are they in charge of profit and loss or do they just need to generate a certain number of leads? Are they the drivers of strategy or order-takers? Do they own branding and positioning? E-commerce and pricing? Do they simply need to execute on marketing campaigns and promotional events? What specific goals must they meet, and do they have the skills, capacity and resources needed to hit these goals? Who do they report to, and who has the final say when it comes to marketing?
Just as global firms must work to define the scope and expectations for the CMO job, small businesses with no CMOs must define the scope and expectations for those who own marketing. As small businesses grow, the needs of the marketing role will evolve. By regularly revisiting these questions in the context your business’s needs and goals, you can be sure you’ve defined which marketing roles you need to succeed and that you’ve got the right person for the job.
In the next installment of this series, we’ll take a look at what types of marketing roles are typically needed as small businesses start out and begin scaling.