A few articles and blogs I’ve read recently (listed below) discuss the role of a CMO in the context of a larger organization.
These musings bring to light some challenges that CMOs commonly face, and help to explain their ongoing battles for respect in the boardroom, as well as their relatively short lifespans. Some of these challenges include:
- CMOs are many times subservient in companies to CFOs or COOs, positions typically seen as being closer to the “bottom-line”
- The Marketing function in companies is sometimes positioned as having a supporting or a “staff” role (versus a revenue-producing role)
- Accounting practices commonly assign revenues to departments other than Marketing, such as Sales or Operations; thus, sometimes without adequately “compensating” or recognizing Marketing for its role and contributions in branding, customer acquisition, customer retention, etc.
- Costs required for marketing planning and strategy activities (i.e. market research, brand or product development, related labor costs, etc.) are commonly assigned as current expenses instead of investments
- CMOs struggle to demonstrate return on investment (in part, due to the two points immediately above)
Each of these challenges has a financial component or implication, and taken together, they illustrate why a Marketing organization needs to be better aligned with its company’s financial performance.
There seems to be no better way to begin to address this than with a CMO’s proactive involvement via a “seat at the table” during a company’s strategic planning and decision making process. I’ve made the case prior how marketing planning and company strategy overlap- it’s at this strategy level in working with C-suite peers that a CMO can seize the opportunity and assume either a lead, co-lead or “expert” role in important data-driven planning steps such as external situation analysis, market opportunity identification, product portfolio investment or divestment decisions, profit and revenue goal setting, and product/market strategies. And market research conducted along the way can certainly be a CMO’s best friend in his/her role as an expert player during this process.
If a CMO is involved at the company’s strategic level, then it naturally follows that s/he should lead the resulting strategic marketing process of segmentation-targeting-positioning which, in turn, results in a selected or fine-tuned market(s) to pursue along with an optimal go-to-market strategy.
In sum, if a CMO effectively shepherds and “owns” the entire marketing planning process up to this point, then the case for sharing in revenues will be undeniable and a more direct link to account for return on investment will exist.