I recently read an article in Fast Company (June, 2007), entitled, “Most Dangerous Job in Business – It’s the Chief Marketing Officer” by Ellen McGirt. As a previous SVP – Marketing and Sales (a CMO equivalent), I was especially interested in what was going on in the revolving door of the executive suites across the country. The article sited a few interesting statistics from a 3-year SpencerStuart study.
Average Tenure at Top 100 Consumer Branded Companies
CMO Average |
23 months |
CEO Average |
54 months |
CMO– Telecom |
15 months |
CMO – Food Industry |
12 months |
Although the SpencerStuart study does say that “every departure has its own story…”, McGirt suggests that tenure is declining because pressures on the CMO have increased relative to quarterly Wall Street expectations. CMOs are said to now need experience not only in advertising and promotions, but also in PR, finance, IT, manufacturing, customer service and branding. I know this, in part, is true – marketing executives must have a much broader experience base to effectively carry out their jobs. However, I believe that declining tenure is also an indicator of how these businesses are run and how clearly cross functional expectations are defined/aligned relative to the desired customer experience and business model objectives.
Certainly there are poor hires, job expectations expand beyond an incumbents’ skill level and some CMOs don’t deliver on agreed upon expectations. But, the CMO departures that have happened lately cannot universally be attributed to these reasons. Let me explain my context first.
In my former position, I was held accountable for the numbers, but I was also fortunate enough to lead product development, sales, retention/loyalty and promotion and advertising. We had a fairly well functioning executive team where we worked hard to set up accountabilities across functions and measure the business accordingly. In the Marketing/Sales/Product organization, we knew three things:
- What the numbers were (close to real time),
- Why the numbers were the way they were (channel, churn, more spend, etc), and
- Who was responsible for that particular number in the organization.
Based on that, we would drive action in targeted areas when we needed to build on momentum or close gaps. It really worked quite well and we were able to adjust our actions quarter to quarter based upon investment priorities and changes. The unexpected perk of doing this was that “bad behavior” stuck out like a sore thumb and wasn’t tolerated often.
What happens when these measures and accountabilities aren’t in place, is that havoc and bad behavior reign. We’ve all seen situations where CMOs have been held accountable for numbers outside of their control – where poor numbers are blamed on advertising. I don’t think I’m alone in believing that it’s impossible to advertise your way out of a product or distribution problem. Or, if it is possible, it’s really expensive and will kill your margins. Unfortunately, facts don’t always matter and executives can be caught off guard by fear-based distractions and attacks that work to get the attention off of poor performing areas of the business.
I understand that there are always political maneuverings between functions in the business – it is human nature. What I’m advocating is for the CEO/COO and executive teams to empower themselves and their teams by setting up transparent measurement systems and processes that enable people to work well together and focus on the customer to deliver business results. The cross functional team that is incented to work together to bring the results in for the business will. It’s not easy to create processes and systems that function throughout an entire organization, but well worth the effort for everyone – employees, shareholders, and the executive team.
The SpencerStuart study showed that the tenure of CEOs is just a little longer than that of two CMO cycles (not counting the months of vacancy). It would be interesting to study longer tenured CEOs of successful companies whose CMOs also have a longer tenure to understand what is in the “secret sauce”. We just might find that has a CEO with a CMO tenure problem may not have people problem, but a “relatively-easy-to-solve” process problem.
-- Sue Schaefer, Partner, JivaroCXO
