There is perhaps no more challenging role in the C-suite than that of the Chief Marketing Officer (CMO) within a B2B organization. While the data on average tenure for CMOs changes each year, the consistent trend is that – among the C-suite – CMOs typically have some of the shortest tenure, well shorter than CEOs, CFOs and CIOs.
It is not surprising. The scope of the CMO’s role across different B2B organizations is highly variable, the skills necessary to be a ‘successful’ CMO are often misunderstood by those hiring for this role and the maturity of the KPIs used to measure a CMO’s success remain at a very nascent stage.
All of this begs the question: Is the role of the B2B CMO past its prime?
Yet it’s tough to answer this with a binary yes or no. The challenge with the modern B2B CMO role is one of positioning. The way many CMOs (and the CEOs who hire them) define the scope of the role, how they rationalize their organization and programs and the skill set they seek out to fill the role … are all fundamentally flawed.
CMOs should not be obsessed with owning every marketing function possible, building widespread brand awareness or being the steward of customer experience (CX) – approaches that 100% of the time result in juggling too many balls. CMOs must focus on clear results and much-needed value-add.
The greatest opportunity is to provide critical strategic and executional leadership in go‑to‑market and to be the steward of the customer’s Demand Experience (DX) – a remit that makes the CMO a critical stakeholder in the company’s Growth Engine. It also positions the CMO to credibly ascend to a true Chief Growth Officer (CGO).
This may sound like it’s not really a CMO role anymore. Maybe that’s the point.
How Is Our Approach to the CMO Role Flawed?
Modern B2B CMOs are set up to fail. Some of this is on them. Some of it is on the CEOs who hire them. Some of it is on the other members of the C-suite, who fail to be good partners.
The major flaws in the CMO role today include:
– CMOs define their remit in terms of ‘owning’ all marketing functions: Perhaps what most derails a CMO is taking a functional, top-down view of his/her remit — i.e., viewing the CMO as the ‘head of all marketing functions’ at a company. It’s an approach to organizational design akin to taking the Pragmatic Marketing chart and just circling all of the functions. Instead of rationalizing what ‘should’ be under a CMO’s purview by identifying a clear commercial objective and mapping out the team members, programs and resources required to deliver this objective, this legacy approach is just pure land grab. Defining the CMO role in this way tends to lead to the next issue.
– Marketing is not at the center of growth strategy: There are two ways this happens. One is on the CMO, the other is on the CEO. The CMO gets to this place by not defining his/her role in terms of how it drives growth and by not committing to clear commercial goals as KPIs for marketing team members and programs.
The CEO gets to this place because (s)he has multiple levers to pull to drive financial results, and depending on his/her background, CEOs may not come at the problem from a marketing POV. For those CEOs who are former accountants, investment bankers or management consultants, they often look to financial levers as a path to driving profits. They fail to put the customer and his/her journey at the center of their go‑to‑market; instead, they go for the financial engineering; and as a result, they fail to build sustainable growth. This issue is particularly acute with ‘founding CEOs,’ who often have been so product development focused and who have had little exposure to or experience with customer journey or integrated go-to-market.
Recent McKinsey research – focused on the relationship between CEOs and CMOs – digs into this issue:
Realizing the full potential of marketing … is not as simple as the CEO looking over at the CMO and saying “go.” The big challenge is building the right dynamic between CEOs and CMOs. We’ve written before about how CMOs can better deliver growth. Yet we still found an opportunity for CEOs to engage more deeply with their CMOs and other growth leaders to more effectively work together to unlock growth. By developing a clearly defined C-level growth role that has marketing at its center, building conviction in modern marketing methodologies, and measuring what matters, CEOs can reinvigorate their relationships with marketers.
– CMOs are not a trusted digital transformation leader: Given where CMOs tend to focus and given their lack of inclusion in the growth equation, CMOs have a fundamental disadvantage in the C-suite already. Add to this many CMOs fail to conceive their role in terms of building a sustainable, perpetual Growth Engine for their organization; they fail to see go‑to‑market as an optimizable process; and while the frequently ‘do’ talk a lot about personas and customer journey, they fail to perceive their critical role in optimizing DX.
All of this leads to a fundamental problem when it comes to digital transformation. Transformation needs a North Star … a foundation … a methodology … and a clear commercial objective. When CMOs fail to bring this, it harms their credibility.
Over the past five years, CMOs have lost ground as digital transformation leaders. Altimeter’s 2023 State of Digital Transformation study found that only 2% of CMOs today are being tasked to drive their organization’s digital transformation. This is down from 19% of CMOs in 2017. CMOs are losing credibility in digital transformation at an alarming rate.
– Marketing is viewed as a cost center: The numbers are telling. Most CFOs don’t believe the correlation between marketing spend and resultant commercial growth. They don’t believe it is a predictable equation, and they find their CMO peers cannot articulate this equation. “An overwhelming 72% of CFOs said their CMO struggles to demonstrate the commercial value and ROI of brand marketing programmes [sic],” according to a study on the relationship between CMOs and CFOs by B2B Agency Transmission.
CFOs subsequently see marketing spend as a necessary evil – expendable the minute they need to improve margins. “64% of CMOs felt that in times of economic uncertainty, brand marketing should be given a higher level of importance in their company. Less encouragingly — only 26% of CFOs agreed.”
– Marketing is starved for funding: Even when marketing and/or the CMO’s role is well-positioned, CMOs too often report they are under-funded to achieve their objectives – likely due to the typical dynamic with their CFOs. “Seventy-one percent of CMOs said they lack the budget to fully execute their strategy in 2023,” reports Gartner in a survey of more than 400 CMOs and marketing leaders. In many cases the ‘tough’ and longer-term investments are what it takes to build a sustainable go‑to‑market; however, CFOs often are often focused on short-term upside. “[N]early 60% of B2B CFOs don’t believe brand marketing is a key driver of short-term sales performance …,” according to Transmission.
What Can We Do to Re-position the CMO Role?
How can we re-position the role of the B2B CMO? How can CMOs focus on clear results and much-needed value-add?
As we noted earlier, CMOs must focus on go‑to‑market leadership – both at a strategic and executional level – and on helping their organizations build a sustainable, perpetual Growth Engine.
Here are three key steps CMOs can take to re-position their roles (and subsequent perceptions):
– Narrow scope: CMOs must ‘give up’ some of marketing and focus on go‑to‑market leadership and DX (not CX) optimization. It’s the first step. If we understand why it is problematic for marketing’s remit to be ‘owning’ all marketing functions, it raises the question of how we rationalize what the CMO does oversee. Where can the CMO provide the most value-add? We would argue it is in driving go‑to‑market strategy and execution – the critical ‘glue’ necessary to drive repeatable growth.
This thinking aligns to the model we introduced in our Chief Growth Officer’s Handbook (see below). This model re-distributes product marketing functions under a “Product Org Leader,” focused on CX, and corporate/brand communications functions under a “Communications Org Leader,” focused on brand equity. It narrows those pre- and post-sale marketing functions under a go‑to‑market/growth group to those that are directly involved in supporting customer journey.
B2B CMOs, who are quite capable when it comes to orchestrating customer engagement to drive demand, are perhaps best positioned to play a key role in the go‑to‑market functional group, and in many cases are well positioned to lead it. The implication here of course is that CMOs can be an integral part of the growth/go-to-market function; however, CMOs with this focus (and a track record of driving commercial “Lift”) also are well-positioned to credibly ascend to the Chief Growth Officer Role.
As we highlighted earlier, this positioning also points to the need for the CMO to focus on DX, not CX, as the core of his/her remit. DX (Demand Experience), which often is not well understood, measures the GTM experience of prospects and customers. It defines their customer journey through the lens of the information requests, the stakeholder and engagement channel interactions and the buying phases. DX is the sum of ALL of the points of interaction between a company’s marketing, sales and customer success organizations and the resultant impact on initial sale and longer-term growth of a customer’s account. It defines the critical path of a customer’s commercial lifecycle, which is why it should be the critical optimization focus of CMOs.
A focus on go‑to‑market leadership and DX optimization requires crisp KPIs both to maintain this focus and to demonstrate results. Effective go-to-market execution should be focused ultimately on providing (sustainable) Lift to income – primarily driving Customer Lifetime Value (CLV). CMOs thus need a system of KPIs that help them understand the combination of “Levers” that best optimize “Lift.”
– Rationalize organization and programs: CMOs must “process rationalize” their go‑to‑market organization and programs around customer journey. The major shift required for marketing organizational design is to move from functional design to process-based design. What do we mean? A functional org chart that depicts the hierarchy of entry-level to mid-level to senior level management – a nested reporting chart – fails to address the ‘role’ that key individuals play in various stages of the customer journey. As a result, we are likely to find significant gaps in customer journey stewardship. Process-based design rationalizes the complete set of roles required to move a customer through all stages of his/her journey – mapping these roles to different stages of the journey and ensuring the customer has continuous stewardship along his/her pre- and post-stage buying journey(s).
The Pre-sale Converged Growth Org (below) illustrates the ‘layers’ of people, process, content, technology and data as a Y-axis, and then teams and their span of control are mapped across Engage, Nurture, Convert as an X-axis. This conveys a sense of cross-functional teams working together against the goal of customer acquisition and where there is no ambiguity of the objectives of each team.
This rationalization can also be extended to the post-sale motion of Succeed, Develop, Grow.
Process rationalization is a critical tool to help CMOs envision the marketing team members required to support effective go‑to‑market operations – also identifying gaps and overlaps. It also helps drive go-to-market performance by ensuring every team member is rowing in the same direction.
This same approach is powerful in rationalizing all elements of go‑to‑market programs, including content, engagement channels, funnel model and technology stack. ANNUITAS has developed its Demand Process model over the past decade to help frame this integrated approach go‑to‑market. CMOs need this type of lens to re-position, to optimize their results and as a foundation to deliver go-to-market leadership.
– Evolve skill sets: CMOs need to loosen their grip on creative and bulk up on operations science. At ANNUITAS we refer to this CMO as a calculator carrier vs. a scarf wearer – i.e., one who is more focused on process and optimization than on design and creative.
A re-positioned focus on go‑to‑market leadership and on optimizing DX requires a CMO who can: (1) analyze customer journey and optimize a process to support critical path and (2) instrument perpetual go-to-market and drive ongoing optimization. A CMO’s span of control should include growth outcomes; data and analytics; and the integrated GTM programs, processes, systems and organization necessary to deliver these growth outcomes.
CMOs must be both an abstract and a concrete thinker. For many CMOs, their past roles and/or legacy views of ‘what is marketing’ stand in the way of them evolving their skill set. A successful, re-positioned CMO can benefit by spending time in the shoes of a sales or finance leader – grounding and helping to make more holistic their view of commercial motions and results.
Why Re-position?
CMOs need to re-position, but they also have a unique moment and opportunity to do so.
“CEOs who place marketing at the core of their growth strategy are twice as likely to have greater than 5 percent annual growth compared with their peers,” according to McKinsey.
Effective go‑to‑market execution requires orchestrating customer engagement to drive Lift. And it must be built on – and operationalized around – a foundation of customer journey.
CMOs – and marketers in general – have a unique vantage point in this equation. They have clear value-add that they can bring to go‑to‑market strategy and execution – over and above many of their go-to-market peers. They are well-positioned to be growth leaders.
They just need to focus on this … and not be afraid to let go of legacy functions (which may include their title).
