Does the CMO Have a Future?

By Alan Brew
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While the role of the chief marketing officer might not be disappearing, it must change to be effective. Marketing expert and business strategist Roger Mader discusses the impact of marketing technology and evolving role of the CMO, and the emergence of the chief revenue officer and fractional executives. Roger argues that all organizations must develop a long-term vision and purpose to survive beyond a founder.

 

Episode Transcript

[This is an edited version of the transcript. Listen to the full interview by clicking the player above.]

Alan: Welcome to another edition of Expert Opinion. This is Alan Brew of BrandingBusiness with the big question of the moment for marketers: is the role of the chief marketing officer going the way of the Dodo, i.e. into extinction, or are rumors of its demise greatly exaggerated?

To help answer this question is today’s guest, Roger Mader. Roger is managing partner of Ampersand, a partnership of professionals dedicated to discover and drive new sources of growth for clients. He is also a professor at the Rowe School of Business in Halifax, Nova Scotia, and former chief marketing officer at Subway, the fast-food chain which specializes in submarine sandwiches.

Roger, welcome to Expert Opinion.

Roger: Thank you very much, Alan. It’s a pleasure to be here and a pleasure to be affiliated with BrandingBusiness. I love the work that you do.

Alan: The future of the CMO was called into question in a recent article in Fortune Magazine and it was quite controversial. They ran an article after a series of high profile CMO exits, among them United Parcel Service, which was followed by Etsy, the arts and crafts marketplace, who said it would merge CMO responsibilities under its operations chief. Then, directly before the new year, it was Walgreens who said farewell to its CMO, distributing that job’s functions to other senior leaders.

Roger, the first question. What the heck’s happening?

Roger: Well, first of all, I do believe that this a confluence of a couple of outliers. Let me just say, I don’t think there’s a lot for marketing professionals to worry about here.

It’s probably helpful to step back in history a minute, Alan. You and I have been on the planet long enough, but for our younger audiences, it’s probably helpful to understand that over time, new functions have entered the pantheon of the chief executive suite. It was back in the day of, if you’ve seen Mad Men and the advertising agencies of the 1960s, they served as the marketing professionals for organizations. They reported directly to a CEO, who was looking to promote growth and would hire an agency. As marketing became a domain of expertise, it began being taught in MBA programs in the ’60s and ’70s. As a result, eventually you had vice presidents of marketing, and then it was elevated to chief marketing officer.

The same thing happened with strategy. That role used to be doled out to McKinsey and the other usual suspects. Eventually, there was a VP of strategy, and then there’s a chief strategy officer. We’ve seen the same thing with corporate development. In my domain of innovation, we see it now too with chief innovation officers – that one’s much more volatile and still being developed as a domain of expertise. Let’s recognize that these things weren’t written in stone, these titles, they have evolved over time.

Second thing. They’re going to change over time, but there’s one really fundamental thing that can’t change, which is that companies sell to third parties, either other businesses or consumers. Understanding them and their needs is a hard job. Reaching out to them with messaging, and engaging in the dialogue in a trusted relationship is a hard, full-time job. There is science around it that’s growing because of our ability to do it through digital technologies and apply instantaneous metrics to it, etc.

I think it is incumbent on all organizations to overcome the internal focus that they often have, where they obsess about their own product or their own operations, and very quickly lose sight of the changing market demands, and behaviors, and competitive sets, and new emerging trends in the changing competitive landscape. If you don’t have someone in this role of, then you are at risk of going to way of the Dodo.

I don’t care if the label chief marketing officer continues to exist. But I will tell you that, putting it under the chief operations officer, as United Parcel Service has reputedly done, or eliminating it all together, is subverting the more appropriate trend – which is to push the entire organization to being more externally focused, have greater vision into the marketplace, build greater sensitivity and empathy to the needs of changing customer demographics, understanding segments all the way down to personas. I don’t care what the title is, but somebody in a very senior role better be practicing that as a profession and bringing the right talent to bear in order to ensure it happens.

Alan: It’s my impression though, that if not the existence of the job, the tenure of the job is certainly getting shorter. I’ve read, for many years now, many articles speculating on the decreasing tenure or the length of service of a CMO and it seems to be a precarious role. You must have some resilience and not get too comfortable. Is my impression wrong, or is the tenure getting shorter?

Roger: No, there’s data that supports that tenure is getting shorter, outpaced dramatically by the CEO of major companies, who has the lifespan of a gnat in some of these organizations because it’s become so unfortunately transactional.

One of the downsides that senior executives suffer is the much higher scrutiny of the senior ranks in these organizations because they cost so damn much. I think you write your own death knell when you start demanding these huge pay packages. However, many of them are worth it.

I think this transactional nature is also – you’ll find, a function of the public markets which are fickle – when you’ve got any kind of market turbulence at all, one of the quickest levers that a Board can pull is to change out senior executives. It’s often a mistake and probably the wrong lever to pull. What you should be doing, in looking at the organization, is tracking balance sheet and cashflow forecast backwards to say, “What is causality here? Is an individual responsible for this, is an event responsible for this, are we mismanaging in some way? And if so, who?”

But there’s this very human, flawed mechanism that we use. I’ve seen it with organizations well beyond marketing, where human beings are the unit of measure and action that executive control, so that’s the lever they pull.

Of course, if you look at an organization and they’ve had three CEOs, or three CMOs in three years, you could tell they’re not solving the problem, they’re just moving chess pieces around. They’re failing the shareholder, they’re failing the marketplace, they’re failing the customer by not properly diagnosing causality and solving real problems. It bothers me a lot.

If I can rant for a second – I realize that, throughout our careers, Alan, one lesson keeps coming back to me that I keep finding as the underlying causal flaw in so many of these management decisions. It’s simply behavioral economics. We, as a monkey, are selfish. We wake up in the morning and think about, “I’m hungry” and not, “I wonder if someone else in the world is hungry.”

It wasn’t until I had children that I started worrying about someone else being hungry. It was a revelation because I realized, “Wow, how self-absorbed I’ve been allowed to be,” as an independent adult all this time. What I find in organizations is much the same thing, which is we think about the company first and the customer second.

We even teach economics from this internalized, “I’m a maker, I make things and push it out on the world,” rather than, “I’m a marketer, I understand my customer and seek the demand that pulls my services or products into their grasp.” Which, of course, opens hearts and opens wallets, and makes everyone succeed more rapidly.

I think, fundamentally, we are overcoming an issue slowly as an evolving primate, from thinking about ourselves, thinking about the product I make, thinking about how I make that better. Of course, that’s all quite useful but losing track of who is my customer, what do they need, how are they changing, how is the competitive set changing to give them better offers than I have? We’re just doing it backwards. We worry about internal things rather than external things, and I’ve struggled to help companies make the pivot to focus more externally.

Alan: Roger, isn’t a part of the problem the short-termism of public companies where they have to look at the revenue targets, and they live and die on those. They have shareholders to answer to. Revenue is the sword on which many of these CEOs, or certainly CMOs, who are supposedly ultimate responsible for long term revenue. Short-termism of the markets seems to supersede this altruistic role you’ve just mentioned, of longer term view and vision, and strategy.

Roger: That’s very true. You know that I authored a book on purposeful enterprise. One of the things that I see with my students is this next generation of rising executives is much more purposeful. They’re much more concerned about the impact of the organization, how they’re lives and their professional lives will be spent. Are they making the right decision in committing to something more than a paycheck?

We’re going to find, thankfully, that this next generation is better than the one that I was part of, at least in the way that they’ve been focused. There was this premise that the company exists to make a profit. You have shareholders, they own the company, your job it to provide return on investment. Which makes inherent sense, but it’s very technical, short term and profit motivated. Then, CEO metrics were all tied to profitability and short-term revenue goals. That’s skews everything, because we all do what we get rewarded for.

I’m very, very pleased that the CEO Roundtable has modified this approach. Very senior CEOs of many of the Fortune 500, many of the same crowd that would be on your jet to Davos, have come together to say that we have responsibility to next generations in what we define as the equity, sustainability, and governance goals. That it is a long-term investment.

All of which was to say, there’s a different between public companies and private, and this short-tenured executive situation happens much more in public companies, where you’ve got day traders and other short term and financial investors looking for a quick win, rather than friends and family are long-term beneficiaries of a strategic long-term view.

Alan: Historically, the CMO was responsible for traditional marketing and advertising, such as print and TV. Today, it’s much more complicated. You mentioned “purpose.” How does a CMO get to grips with this intangible of purpose and what return, how do you calculate return on purpose? Also, the rise of marketing technology, which has digitized the role. It’s changing it more into more algorithmically driven, full of consumer insights. There are many dynamics now, Roger, influencing the role of the CMO. What’s a poor CMO to think?

Roger: I’m going to answer in the reverse sequence. The last question you asked was about marketing technology, or martech as it’s sometimes called. It is a blessing. If you think about the age of doing Super Bowl ads, we just had a Super Bowl, with some fantastic ads this year, by the way. But that was the domain of the Madison Avenue, traditional marketing agencies. They were doing broadcast media to try and capture a wide array of very different sets of consumers. It was throwing a grenade out into the field, rather than a sniper shot.

Today’s digital technologies allows us – let me us a less violent example – it is the difference between screaming in the town square, and sitting down and having a coffee and a reasonable conversation with a friend. This technology, this digital age, has permitted us to market one-to-one to individuals who we know. Salesforce is huge for a reason, because it gives us this knowledge, at least in a B2B context, of who your customer is, and a legacy, and a history, and all the data you need to be able to anticipate their next purchase, and to position your offering to meet that.

I’m a huge advocate for harnessing marketing technologies to give you digital insights into the behaviors of your consumers or B2B customers.

Number two. You asked about the turbulence or turmoil that’s going on in the role of the marketing officer. We’re increasingly seeing companies deal with this is by outsourcing the CMO role to fractional marketers. Meaning that you basically have someone who works for you, but without being a full-time role. This is more typical of startups before they can justify institutionalizing all of these capabilities. But even large companies are now starting to think about how they can get the best talent for less, on an as-needed basis through this fractional marketing capability. That’s enabled by our digital world, and the pandemic allowed us to see that we could work virtually. It’s much more efficient to have people who are not full-time, onsite, dedicated to a particular function.

Then, your first question, which delved into this notion of purpose. Let me say that my research shows that the companies that are brilliant at compellingly pursuing a strategy that has a positive impact on the world, society, and next generations are typically formulated by the founders. Where we’ve seen all of the turmoil is in public companies that have professional management in subsequent generations, after the original founders. Now, you’ve got guns for hire, running this big ship, and it’s very different than having the founder generation that’s really mobilized by more than just the pursuit of profit.

You can bridge that divide, that generational divide between founders and subsequent management teams with purpose, by going back to the history of the organization and saying, “What difference can we make in the world; what is our purpose in the world?” Crafting that into something that’s meaningful, legitimate, speaks to multiple constituencies – your employees, your shareholders, your communities, your suppliers, there’s a lot of folks who can be mobilized.

Alan: You mentioned that the new phenomenon, at least to me, of the fractional CMO. I don’t quite understand how it works. Why would somebody become a fractional CMO and why would somebody hire one? What’s the advantage to both? Could you expand on that role, Roger?

Roger: I’m serving as a fractional CMO at the moment. There’s a terrific consultancy based out of Switzerland called Smidige. The founder is out of Norway. Smidige means agile. Smidige helps companies with, for example, the conversion from traditional legacy, server-based environments to moving to the cloud.

A small, nimble service company that’s trying to stay as agile as they’re helping their clients be, rather than hire full-time chief marketing officer in a relatively small startup – they reached out looking for a fractional chief marketing officer, which means someone who works part-time and doesn’t have to be commuting back and forth to the office, can do it all virtually. I am leading marketing for a team that’s global, but headquartered out of Switzerland, with operations in primarily North America. I do that on one day a week, sometimes two days if it’s busy or we’ve got a big event coming, sometimes no time at all in a week because I’ve got a team that’s developing social media, or doing updates to the website, or developing a blog post, etc.

It’s really a function of size, in this case. But you can imagine, UPS, rather than doing away with a CMO role, saying, “What we need to do is maintain the value and validity of this, but we could do it with a part-time or fractional chief marketing officer who is brilliant in this role. We don’t need them full-time.” As long as they’ve got the staff and they’re able to deliver on whatever the strategy is that they provide, that’s the idea. It’s more common among smaller businesses, but it’s actually taking off with bigger businesses, too.

Alan: Is it going to stay, Roger? It seemed to me a phenomenon or a trend that’s emerged recently. Is it in response to prevailing circumstances, or the economy, or is it something that’s developing and evolving as a long-term role?

Roger: The data points that I’m connecting are that this role has existed for a long time in venture capital and private equity. I’ll give you a particular example: A friend of mine was the chief marketing officer for Godiva Chocolates. She went to work for a major private equity firm based in Connecticut, that invests in consumer brands. They had her serve as a chief marketing officer over multiple companies in a portfolio, and she would go in and review these companies and say, “Here’s where their marketing is broken.” Get them on the right path, and then work with the CEO on an interim basis. Then, go off to the next company and do the same. She was playing CMO in five companies in five different domains for several years and got these companies back on their feet.

The PE firm had on staff senior executives that they would drop into these companies to get them righted. Rather than saying, “Oh, we’ll just go recruit somebody for this role,” they could parachute somebody in right now who has the same understanding from the due diligence of their acquisition to know where the problems are, to understand who the players are. They’ve been involved with the interviews with the executives, so they can really drop in and make a difference really fast. Now, you’ve got more and more of these executives and people who might otherwise be retired, for example, who are available on a part-time basis and happy to do that, and bring a whole lifetime of expertise and history. They might even end up being the mentor to a young, new full-time marketing executive.

What we’ve seen, over and over again, is that Silicon Valley and venture capital has transformed the way we think about big companies.

Alan: I want to pivot slightly, and talk about the chief revenue officer, this new role. From what I read, it’s said to be sweeping through the C-suite of corporate America and elsewhere. In fact, LinkedIn reports a 70% increase in this title, and McKinsey has a whole philosophy about the emerging role. How should CMOs or marketers be thinking about their job differently in the light of these new impinging roles and responsibilities?

Roger: I spent much of my early career as an organization designer. For companies that were going through some kind of transformative change and were moving the pieces around, we would sit together and say, “Based on this strategy, what’s the right way to align roles in order to be able to execute on it?”

One of the domains of tension has always been the distinction between marketing, which was spending money to get messages out there historically, and sales, which is closing a transaction to get money in the coffers. Those two should be intimately interlinked, if not one and the same. Especially now, that marketing allows us, technology and insight allows us to really understand our customers much more intimately, now that marketing develops personas for segments, and then gets right down to individuals.

If you’re not linking marketing and sales, or chief revenue officer, you’re splitting two sides of the same coin. It’s nonsensical to me. These people are responsible for reaching out to the market, winning loyalty and bringing the transaction home. I would put sales under marketing, or marketing under sales, or you could put all of them under operations, but it has to be an externally focused group.

What we always need is an advocate for the customer. There needs to be a senior executive who speaks truth to the rest of the power that’s worried about operations, finance and internal management, and says, “That doesn’t match the market, that alienates our customer.” That person, that voice is vital.

Alan: The reimagining of marketing and the sales function underneath a supremo, which is now called the chief revenue officer, is that what I’m hearing?

Roger: My own view is that chief revenue officer, if you look at where it’s being applied, where McKinsey describes it, what they’re talking about is merging marketing and sales. That makes sense to me, no problem. It should have always been that way.

The reason it wasn’t was because marketing was this spend almost blindly on messaging out to the marketplace, it was a different set of skills and capabilities driven by ad agencies than sales, which is feet on the street, going out and buying donuts for people and getting a sale done. Now with the technology, they’re integrated as they always should have been, we just didn’t have the ability before. You can call it a chief revenue officer, you can call it a chief market officer. On March 20th, I’m presenting at a chief customer officer gathering, which is much the same idea. They’re all different labels for making sure some senior executive owns our relationship with the marketplace.

Alan: Roger, this has been absolutely fascinating, this stroll through the evolution of the chief marketing officer. What advice would you give for any young person starting their career and is interested in marketing, to think about, “Well, what do I become? What should I be? How do I bring the greatest value to a company now, or a business, as a marketing expert?”

Roger: I think this is its own marketing class, so I will keep it real short. I want you to envision a series of circles that become a Venn diagram, where at its heart, we are responsible, in marketing, for understanding and being able to activate the market, our customer. I say market because I want you to understand it’s your customer, it’s your prospects, it’s the customer who loved you and left you. You learn so much, so much more from studying the people who have chosen you and chosen against you, because they know everything about you.

Someone has got to have this view of the marketplace. Then, within that, there are domains of competence that I would say to a young person – are you naturally intrigued by data analytics, because that is its own domain and profession? Are you a creative and should be on the side of imagining the vision and the voice of the organization, and producing even the creative magic that makes us even more engaged into the marketplace? Are you financially oriented, and should you be focused on driving our cashflow forecasts and showing the correlation between every dollar that we spend and every dollar that we bring in? Are you a human behavioral scientist, so you should be out in the field like an anthropologist, studying your customers like great apes, and really observing needs, and finding next opportunities?

There are all kinds of domains that you can think of as the different fields of study that you might pursue.

I have worked with anthropologists, who are out studying humans. I have worked with data scientists, who are studying markets at large. I work with finance professionals, who are trying to translate human behavior into revenues. I would say, “Here’s the mission, here are the domains of competency required – which one do you have natural aptitude?”

There’s a great marketing professor named Scott Galloway, out of NYU. One of his recent works  is The Algebra of Happiness that talks about the way you should select your career is based on a combination of what you’re good at and what the market needs, and find somewhere in that Venn diagram.

What happens is, because you’re naturally good at it, you become really good because you focus your career on it. The next thing, you’re proud of it, the next thing, you’re lecturing on it and you achieve career happiness because you focused on something that you’re good at and is valued. That much better than saying, “Follow your dreams,” which is what makes it controversial. He thinks that you do your children a huge disservice by saying, “Follow your dreams.” It should be, “Understand your strengths, understand what the world needs and pursue that.”

Alan: That’s a very philosophical note to end on. Just to summarize what I heard, the rumors of the demise of the CMO is greatly exaggerated, but it is changing. Be prepared to evolve. Stay connected to the marketplace and understand human behavior, and how people think and make decisions. Would that be a fair summary?

Roger: I would add one more thing, which is correlate marketing to revenue, which is what the role of market analytics and martech allows.

Alan: So final, final question, Roger. You mentioned the Super Bowl and the great ads this year. What was your favorite?

Roger: What’s funny is that we had an event last night and I didn’t watch the Super Bowl live. But I scanned the advertisement highlights today, and I thought that it was an interesting and risky ploy for Dunkin’ Donuts and for Ben Affleck, who has his own brand that, in some ways, might be bigger than Dunkin’ Donuts, to team up and basically make fun of him being a goof about how he was trying to capitalize on this brand and on his relationship with JLo. The whole thing was crazy, and as a result, kind of intriguing and of-the-moment. I liked that one a lot.

Alan: I agree. That was my favorite too, the “Dunkings.” Well, Roger Mader, thank you so much. This has been absolutely fascinating. I do appreciate your time; you are obviously very busy and in demand which is a good thing and not surprising. Thank you so much.

Roger Mader serves as the managing director of Ampersand, a growth consultancy to “help small companies get big, and big companies act small.” He serves as the chief customer officer for Myra Media, a creative agency for digital marketing. He has taken interim leadership roles for several of his clients, including serving as the Global Chief Marketing Officer for Subway, the world’s largest restaurant franchise. He led strategy for EY North America. He helped to launch the enterprise consultancies for Business Objects (SAP) and Quid. He is the author of Purposeful Enterprise: Design Your Organization to Change the World.