The Future of CMOs: Are They Really Facing Extinction?
Written on
The CMO's Predicament
For years, there have been dire predictions concerning the future of Chief Marketing Officers (CMOs). Over a decade ago, business scholar Dominique Turpin controversially labeled the CMO as "dead" in an article published in LinkedIn. This provocative headline was designed to attract readers, yet it highlights a concerning trend: the diminishing authority of CMOs, particularly within organizations that profess to prioritize customer needs while remaining product-centric.
While some companies inherently understand marketing—often those with visionary founders like Ingvar Kamprad of IKEA or the late Steve Jobs at Apple—these instances are more the exception than the rule. Generally, it's the CEO who defines the overall strategy, the R&D teams who create the products, and the CFO who controls pricing and budgets. This trend has understandably left many CMOs feeling undervalued, leading some to contemplate career changes.
Turpin identifies four primary reasons for the decline of the CMO role:
- Many CMOs lack a focus on strategizing and delivering customer value.
- A short-term outlook has made organizations more CFO-centric, echoing Jack Welch's emphasis on shareholder value over comprehensive metrics.
- Measuring marketing's impact remains challenging.
- Organizations often fail to grasp the true essence of marketing.
In response, Turpin advocates for a shift to a Chief Customer Officer (CCO) position, which could be held by the CEO, CFO, or a former CMO. While a CFO in this role might clarify marketing's often vague objectives, there would likely be a conflict between their inherently financial mindset and a customer-focused approach.
Understanding the CMO's Challenges
Fast forward six years, and the CFO-driven strategy employed by 3G Capital at Kraft Heinz resulted in a staggering loss of value—approximately $15.4 billion from a $50 billion acquisition. This approach led to reduced dividends and shareholder lawsuits, indicating that a finance-first mentality can have dire consequences.
Scott Galloway, a noted entrepreneur and commentator, has voiced his concerns regarding CMOs. He suggests that if a CMO is merely seeking more budget for brand studies and advertising, they are likely to find themselves out of a job within 18 months. His statement encapsulates the broader critique of the American marketing landscape, which has shifted dramatically over recent years.
The Global Marketing Shift
Historically, American marketing set the global standard, with influential thinkers and academics shaping the discipline. However, as Mark Ritson pointed out, marketing strategies in the U.S. have lagged behind international innovations. Textbooks by figures like Philip Kotler have been critiqued for lacking evidence-based practices, relying instead on anecdotal success stories.
The Australian Ehrensberg-Bass Institute's research significantly impacted global marketing strategies, particularly with Byron Sharp's publication "How Brands Grow." This shift has led to a more nuanced understanding of marketing effectiveness outside the U.S., while American marketers have continued with traditional methods.
Recent discussions around marketing effectiveness have highlighted a growing awareness among CEOs of the importance of their CMOs. According to a Boathouse study, many CEOs expect their marketing teams to drive growth, improve brand reputation, and transform company narratives. Interestingly, nearly half of CEOs regard the brief tenure of many CMOs as a positive sign of success.
Despite the challenges facing CMOs, evidence suggests they aren't going away anytime soon. CEOs are beginning to recognize that strong marketing leadership is essential for sustaining brand strength and corporate success.
In conclusion, the evolving role of CMOs reflects a complex interplay of market demands, organizational structures, and the need for effective marketing strategies. As the landscape continues to change, so too will the expectations and responsibilities of CMOs.