The CMO Must Be the Change Agent

White Paper

In the face of today’s changing marketing landscape CMOs need to act as change agent for their organisations in order to redefine and restore the function of marketing and drive true business results and measurable ROI. This White Paper discusses the CMO’s biggest challenges, the revolving door of the CMO and why the CMO’s tenure is shorter than the CEO’s as well as the shifts that will drive change and real world success stories.

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“Marketing needs to revolutionise itself – ‘Change or Die,’ ‘Eat Lunch or Be Eaten’ – and get back to its original mission– driving business and being accountable for that business.”
- John Quelch, established marketing professor, Harvard Business School.

Marketing is in the midst of a revolutionary change – a slippery slope between relevance and irrelevance. This revolution challenges the definition and future of the marketing function, and its talent has been percolating under a slow boil for years in the halls of companies large and small. It is a revolution long overdue, and – while tremendously frightening to marketers – offers an exciting opportunity to restore marketing to the art of driving business results based on the science of understanding and adding value to current and future customers.

The Chief Marketing Officer’s role in the revolution must be one of boldness and daring – innovation and thought leadership. This leadership must stretch from the boardroom to the back office of marketing operations and across the public sphere of the external marketplace. To successfully achieve the potential of this revolution, the CMO must be a powerful change agent, both internally and externally, who can chart a course for where marketing needs to go, help her department navigate the waters of change, and compellingly storyboard from the vision through to the results for both the board and the street.

Just as the role of marketing must change in order to survive, the role of the CMO must evolve as well. All marketing leaders from public company CMO to the head of marketing at a mid-sized enterprise are facing increased pressure to grow revenue, retain customers and improve market results. At the same time, in a rapidly changing environment of proliferating channels and internal constraints, they struggle keep pace and make sense of what customers want, need and expect.

Listen to today’s marketing leaders and you’ll hear reccurring themes of accountability like never before. Sherri Gilligan, senior vice president of marketing at MGM MIRAGE provides insights into the highest priority for her marketing team this year: “Drive bottom line results, by growing customers, gaining ‘wallet share,’ and retaining customers.”

The Pulse of the CMO

Several recent Aprimo surveys conducted with CMOs from all industries at companies of all sizes illustrate the myriad challenges that today’s marketers are facing. For example, at the Argyle Executive Forum: CMO Spotlight Forum: Retail and Consumer Goods & Services, which took place on April 29, 2010 in New York, we asked attendees the question: “What is Most Broken in Marketing Today?” The largest group – 39 percent – cited “correlating marketing activities to revenues.” Another question asked “What is driving the highest degree of change to your marketing strategies?” 37 percent cited “creating more compelling customer and prospect experiences,” while 27 percent again cited “increased requirement for return on investment (ROI) and accountability.” And finally, a third question asked “What is the CMO’s biggest challenge?” 37 percent cited, “integrating and tracking multiple channels;” 28 percent cited “doing more with less;” and 18 percent again cited “accountability and measurement.”

What is most broken in marketing today?

[Download PDF for charts]

A few weeks later, at the SiriusDecisions’ B2B Marketing Summit in Phoenix, we again asked the question “What is the CMO’s biggest challenge?” Once more, ROI rose to the top of the list with the largest group of respondents – 27 percent – citing proving ROI as the top challenge. Next on the list for B2B marketers was ‘alignment with sales’ (24 percent), followed by ‘demand generation’ (13 percent).

Still another joint survey of Online Marketing Connect and Aprimo in April, 2010 asked marketers at every level in the organisation about their requirement for evaluating new technologies. Of the 725 respondents, 56 percent rated measurement capabilities top of the list – again underscoring the increased pressure on marketing to demonstrate ROI.

What is your key requirement for evaluating new technologies?

[Download PDF for charts]

Today’s CMO can easily feel overwhelmed and not in control when trying to cater to so many dissonant demands. Marketers face an internal conundrum that threatens to enslave the creativity of marketing to the complexities of analysing the function. In most companies, for instance, the largest indirect, variable spend is for marketing. Yet many marketing leaders whose strongest skill set is their vaunted creativity still manage their spending by gut-feel versus sound metrics. Marketing leaders need to balance the data requirements to analyse markets and trends the science of market-driven-marketing with creative expressions of branding, positioning and go-tomarket campaigns.

In today’s economic climate, businesses can no longer afford to spend marketing dollars based on gut-instincts – meaning CMOs must take the reins of their department and find new ways to marry creativity with well-grounded ROI analysis.

It should be no surprise to marketers. Human Resource leadership employs HR measurement, metrics and systems to demonstrate a firm’s human capital investment. CFOs, accounting and finance teams thrive by creating pie charts and data to make decisions on income and spending. Sales leadership lives by forecasting, pipeline reviews and team performance to measure real-time value to their company’s sales metrics. C-suite colleagues look to the CMO and ask, “How do you measure your team’s success?” Until recently, the answer has not always been clear.

In his new book, The Mirror Test, Jeffrey Hazlett, former CMO of Kodak speaks at great lengths about the ability for marketing leaders to demonstrate value: “You get what you measure. Know what your metrics are for monitoring and measuring so you can make decisions based on real information. Learn how to evaluate and keep evaluating return on investment.”

What Channel is On?

Further to the pressure to prove the ROI of marketing programs, as the previously mentioned surveys show, marketers are also facing a proliferation of marketing channels with the meteoric rise of social media sites and loss of control of the brand as customers take control of the online airwaves.

The increased pressures to deliver ROI and the proliferation of new media channels have created the perfect storm for marketers. And this storm is forcing the CMO to lead a revolutionary change or risk being pushed aside into irrelevancy as a new guard takes the helm.

For ABC Television Group, Steven Bushong, senior vice president of marketing operations understands the proliferation of media channels and the need for marketing to be a proficient player with these new instruments. He stated that his marketing team’s highest priority this year is to “create an organisation and environment for audiencefocused engagement and innovation” backed by “a structured and consistent centralised framework of marketing technology for efficient capturing and analysis of information.”

Ten Reasons CMOs Face a Quickly Revolving Do

According to reports from publications such as Business Week, Ad Age, Brand Autopsy and others, the average ‘shelf life’ of a typical CMO ranges from 18-24 months. This short stint is even shorter than the hot-seat of the chief executive officer – which ranges from 7-10 years – underscoring both the tremendous pressures marketers face and the short leash they are given to show success and turn things around.

Aprimo CMO Lisa Arthur is a four-time CMO and previous marketing strategy consultant who has been on the frontlines and in the depths of turning around the turmoil of many marketing departments in recent years. “In conversations with peers, and from personal experiences, I’ve witnessed the fallout that occurs when marketing is dysfunctional. It’s an impact that reverberates all the way up to the company’s revenue and all the way down to the bottom line,” says Arthur. “All too often, marketers will opt for the ‘ostrich in the sand’ approach – ignoring the internal dynamics and the external market reality and then strategies, programs and results suffer. Driving change means we have to question, challenge and drive shifts in order for marketing to move forward and be viewed as strategic across the entire company.”

According to Arthur, some key reasons behind the ‘CMO revolving door’ include:

  • Running marketing tactically and not running the function like a business.
  • Failure to build and unite right brain and left brain organisations without silos.
  • Getting caught in the short-term ‘hamster wheel’ spin versus balancing long-term vision and shortterm results.
  • The Credibility Crisis – talking too much like marketers and failure to cement strong crossfunctional relationships.
  • Black-boxing the craft of marketing which reduces understanding and buy-in on strategies, tactics and execution.
  • Forgetting the number one stakeholder: the customer
  • Hiring like-minded/skilled people, and not seeking a balance through opposite skill sets.
  • Forgetting that collaboration can be simple and provide needed insight for success.
  • Being satisfied with the status quo and not pushing to embrace and drive change in emerging channels and technologies.
  • Forgetting that ‘Chief’ in CMO means to lead.

Clearly marketing is at a crossroads today, and often the CMO contributes to the problem. At the SiriusDecisions’ B2B Marketing Summit in Phoenix, when Aprimo asked visitors to our booth to answer this question written on our ‘Marketing Revolution’ wall: What is the biggest challenge facing the CMO? Over half of our booth visitors took the time to write their answer to this question. A surprising 16 percent of respondents said ‘the CMO’ themselves was the biggest challenge.

CMO’s should view this as a wake-up call to provide strong leadership for their organisations during this time of heightened pressure and confusion. But how?

A recent Advertising Age article titled ‘Traditional CMO Roles Won’t Position Your Company or Your Career for Growth’ underscores the evolution CMOs must go through in order to survive, thrive and lead organisations into the future.

The article, by Carlos Cata and Scott Davis, cites several shifts that the CMO role must undergo, saying: “The environment for marketers is changing dramatically. Marketing’s leadership in driving business success has never been more in demand, and those who have begun to expand mindsets and capabilities are setting the standard.”

Necessary shifts include:

  • From defensive back to quarterback: “The quarterbacks not only have earned a seat at the strategic table, but they are helping chart their organisation’s path forward…”
  • From innovator to inventor: “Senior management is increasingly on the lookout for marketers who reinvent how they do things. This is particularly true in the face of vastly changing consumer behavior dynamics as evidenced by the explosion in social media.”
  • From mechanic to driver: “Having spent considerable time under the hood understanding the metrics and analytics that gauge the engine’s performance, it’s time for marketers to get behind the wheel and start driving the business.”
  • From artist to architect: Balancing creativity with analytics will become a core skill set needed to create differentiation in the new world of channel proliferation.

Pockets of Success: The CMO as Change Agent

Many successful CMOs have already embraced these shifts and are leading their companies into reinvented brands, stronger customer engagements and improved financial outlooks as recession recovery begins.

Richard (Dick) Lynch, CMO of Popeyes Louisiana Kitchen provided insights to his company’s brand turnaround strategy at a recent Argyle Executive Forum in New York. His speech, titled, ‘Backing into Forward’ is a strategic marketing story centered on re-discovering the company’s original Louisiana heritage.

Yet, in one of the most challenging economies in recent history, the company changed its name from Popeyes Chicken and Biscuits to Popeyes Louisiana Kitchen to better highlight the brand’s culinary heritage steeped in Cajun and Creole cuisine – and developed new national marketing and advertising campaigns to engage customers with the brand

The strategies, executed in almost 2000 restaurants globally, spurred customers worldwide to respond with a highly charged adoption of a brand that found soul within its New Orleans roots: success in a hardened economy, with tremendous pressures for the CMO to deliver results.

“This has been the toughest last 18 months that I’ve seen in my very long career. The economy has challenged marketing. Every decision is scrutinised in a way that it has never been scrutinised before.” Lynch said. “While the economy looks to be flattening out, I suspect expectations for accountability in marketing will remain. I think the key for CMOs going forward will be to embrace this new environment of accountability by leveraging new channels for marketing feedback and measurement in real-time.”

Suzie Brown, CMO of Valassis, echoes Lynch’s thoughts. As the marketing leader for one of the nation’s leading media and marketing services companies, Brown works hand in hand with her executive team to drive change in her organisation.

“In today’s ever-changing business environment, CMOs have a responsibility to drive success of their companies’ brands; develop solutions that drive business for their clients; be a strategic partner with sales, helping them grow revenue and profits; and also map their future strategy,” said Brown. “It is not a job for the faint at heart – it is a job that demands metric-based decisions and an ability to drive short and long-term results.”

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