Why CMOs are endangered - and is the CEO to blame?

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By: Wise Marketer Staff |

Posted on May 4, 2007

The casualty rate of chief marketing officers (CMOs) could be reduced if CEOs and boards better understood the role, requirements and value of the CMO and empowered them to gear the company's operations toward customer experiences, according to the new 'Define & Align the CMO' study by the CMO Council.

The study, sponsored by marketing operations consultancy MarketBridge, found that a lack of effective return on investment (ROI) metrics for marketing functions is also undermining the average CMO's position and value.

Reasons for leaving
According to the CMO Council, factors such as title inflation, unrealistic expectations, flawed hiring practices, talent deficiencies, and a lack of business and strategic leadership skills are currently major contributors to the limited shelf life of the CMO. But the report also notes that 50% of executive searches are to replace incumbent CMOs who were primarily hired to fix broken marketing organisations rather than to drive business value.

The research took into account a number of qualitative and quantitative interviews with CMOs, CEOs, board members, senior marketers and executive recruiters throughout North America, and discovered some serious contradictions in upper management. For example, most executives consider the CMO a valued member of the executive team, but they also believe that many CMOs lack the background and skills needed to be a top management player - a challenge many senior marketers share with their CIO counterparts.

The CEO's view
Interestingly, most CMOs involved in top level decision making were given high marks by their CEO in terms of overall performance, while those who remain in tactical mode were given significantly lower scores.

The blame for these problems, meanwhile, extends to those executive recruiters who draft candidates without gaining true insight from their clients into the skill sets, qualifications and experiences needed for the job and cultural environment, the report warned.

Key findings
Among the study's main findings:

  • Nearly three-quarters of the C-level executives surveyed consider the marketing organisation "highly influential and strategic in the enterprise". At the same time, nearly two-thirds also said their top marketers don't provide adequate evidence of ROI with which to gauge marketing's true performance.
  • In a clear sign of the strategic role played by marketing executives, nearly 70% of the CMO respondents said they report directly to their CEO. However, only 40% of that number were given an 'A' grade for their performance from the CEO.
  • A majority of the recruiters surveyed believe that CMOs have a shorter shelf life than other C-level executives. The average tenure of CMO respondents was 38 months.
  • In general, CMOs get more respect from the boardroom than from the CEO. Most of the board members surveyed (over 80%) believe that within the next two years the CMO position will gain greater credibility with the rest of the management team. But less than 20% also say that an increasing number of CMOs will rise to the CEO position.

"Conventional wisdom holds that the CMO is a strategic player, but this study shows a significant gap between perception and reality," concluded Donovan Neale-May, executive director for the CMO Council. "That's why the CMO Council advocates a significant change in the way this position is defined and structured. That change needs to be driven by the CEO, who must decide whether or not the company needs a marketing chief, and lay the groundwork for establishing the position if necessary. There should be nothing less than an immediate consensus on the part of all stakeholders, from the CEO to outside recruiters, around a clear definition of the role and required competencies of the CMO."

According to Tim Furey, CEO for MarketBridge, "If CMOs do face an identity crisis, it's not for a lack of marketing competence or creativity. In fact, the CMO leadership capabilities and talent levels in the surveyed companies were higher than ever. Instead, the identity crisis stems from a perceived lack of measurable results."

The 80-page report (US$295) and executive abstract are available from the CMO Council's web site.

For additional information:
·  Visit CMO Council at http://www.cmocouncil.org
·  Visit MarketBridge at http://www.market-bridge.com