There are some new faces these days in the boardroom. They have new titles like Chief Customer Officer, Chief Revenue Officer, Chief Digital Officer, and Chief Experience Officer. These executives have responsibilities we might expect to reside within marketing. That leaves Chief Marketing Officers with a decision — do you see the rise of these roles as an opportunity or a threat? Our conversations with marketing leaders suggest that CMOs are indeed at a crossroads with four potential paths: up, over, down, or out.
The reason for these new roles is that we’re entering a new era of digital transformation. Over the last decade, most companies’ digital agendas have focused largely on technology — moving to cloud-based software, modernizing IT infrastructures, adding digital channels, and digitizing business processes. These efforts have enabled operational efficiencies, cost reductions, and greater agility, preparing companies for the next phase of digital transformation: driving growth. So leaders have turned to what ultimately drives growth: creating value for the customer and using new technologies to transform the customer experience.
Today’s consumers and business buyers have more choices and higher expectations than ever before. They want companies to be more human: to remember who they are, know what they like, and use that understanding to help them achieve their purpose. For companies, this requires an unprecedented level of integration and coordination across every business unit, from sales and marketing to customer service, and across physical and digital channels. This poses a deep challenge to companies organized by product and function rather than a customer-centric model like experience and value.
Marketing faces a particular challenge since customer engagement has traditionally been considered its domain. However, many of the most vital points of interaction are often not owned by marketing. To meet the organizational need for integrated experiences across business units, many CEOs have created new roles like Chief Digital Officer, Chief Experience Officer, Chief Customer Officer, or Chief Growth Officer. This expansion of responsibility for customer engagement beyond marketing raises questions for the future role of the CMO.
We can see the four pathways for CMOs (up, over, down, or out) already playing out in the marketplace in our observation of recent moves within and between companies.
The first two paths, up and over, occur when CEOs make the shift to a customer-focused growth strategy, and CMOs step up to drive enterprise-wide transformation around the customer experience.
1. Up: CMOs are promoted into new roles.
In this path, CMOs take on a new title and position, with responsibility for the end-to-end customer experience and other growth-oriented functions.
At Dick’s Sporting Goods, Lauren Hobart was promoted from CMO to President, while at KFC, CMO Kevin Hochman became President and Chief Concept Officer. At Dick’s Sporting Goods, Chairman and CEO Edward Stack attributed Lauren’s promotion to the importance of driving “omni-channel consumer engagement” across the enterprise. Elisa Steele at Jive Software, Jay Farner at QuickenLoans, and Susan Lintonsmith at Quiznos have even gone from CMO to CEO. This is a break from the traditional paths of finance, sales, and operations to the top spot.
2. Over: CMOs take over new responsibilities.
In this path, CMOs keep the same title, but are given responsibilities over other areas affecting the customer experience such as e-commerce, product, customer service, and digital transformation.
At Airbnb, CMO Jonathan Mildenhall is driving the company’s evolution to an end-to-end travel brand by reinventing “experiential marketing.” Alison Corcoran moved from CMO of Staples to CMO of DentaQuest, gaining responsibility beyond brand and customer engagement. She’s also responsible for digital transformation and the overall direct-to-consumer business. According to CEO Steve Pollock, the expanded scope of Alison’s role was in order to provide “a holistic, integrated experience” to their 24 million customers.
When the CEO and CMO aren’t well aligned, CMOs face less promising paths.
3. Down: CMOs lose influence and authority.
CMOs can find themselves on a downward path for a variety of reasons. Some research indicates that CEOs hold CMOs responsible for disruptive growth more than any other position in the C-Suite. Yet CMOs don’t feel they are positioned to disrupt the status quo or achieve aspirational growth.
Sometimes the CEO sets the growth agenda but CMOs either aren’t interested or don’t have the skills to go on and reshape the customer experience and drive organizational change. In other scenarios, the CMO is interested, but the CEO doesn’t see their role as being more than running campaigns and generating leads. In this case, the CEO may bring in a new role over marketing.
For example, Coca-Cola — widely regarded as one of the top marketers in the world — recently eliminated the role of CMO and replaced it with a Chief Growth Officer. The previous CMO was known for his focus on campaigns and was thanked for “improving the productivity of marketing” and leading a “resurgence in the quality of advertising.” In contrast, the CEO explained the leadership changes as necessary to “respond to the fast-changing needs” of customers, employees and partners and to “transform our business for the future.”
4. Out: CMOs leave the organization.
CMOs move out of organizations for many different reasons. Sometimes they don’t fit with the direction the company is going, as was the case with Coca-Cola. Sometimes it’s because CEOs want their CMOs to drive growth and transform the experience, but don’t give them the mandate, resources, or span of control to do so. Eventually, the CMO serves as a convenient scapegoat when the company doesn’t deliver on its growth commitments.
In those cases CEOs are ahead of their CMOs. But we more often see CMOs who are ahead of their CEOs and boards. They want to drive growth around the customer experience, but can’t get their CEOs to recognize the need, or — if they do see the need — to commit the political or financial capital to back the CMO leading the transformation.
In the case of Coca-Cola, Jonathan Mildenhall was previously SVP of Marketing at Coca-Cola. He left in 2014 to pursue a transformation at Airbnb. Now Coca-Cola is replacing its CMO to bring what appears to be the kind of thinking that Mildenhall has brought to Airbnb. We are left to wonder if Coca-Cola had moved Jonathan up or over sooner, perhaps he might not have felt the need to move out.
We expect the next few years will continue to see a lot of shuffling around in the C-Suite as companies turn their attention to growth, recognize the insufficiency of incrementalism, and place the customer experience at the center of their transformation.
In order to move up and over, CMOs need to foster new perceptions and expectations across the enterprise. Most marketers recognize that marketing is much more than running campaigns and managing brand identity. But the rest of the organization doesn’t know this yet, including most CEOs. CMOs need to define a broader vision for marketing as the orchestrator of the customer experience and prove that marketing is not a cost center but a revenue generator.
This requires a new set of skills for many CMOs, particularly around leading transformative change. CMOs often find it challenging to get their peers, boards, and sometimes even their own teams to understand the importance of customer experience and then to change how they think about it. It’s even harder to get people to commit resources, change incentives, and make the hard decisions to become truly customer-centric.
It’s worth the effort. The most customer-centric companies are the ones outperforming their competitors and raising the bar on customer expectations, whether digital natives like Amazon and Netflix or established leaders like Sephora and Starbucks. But it takes more than simply saying the words “customer-centric.” The challenge is moving beyond the notion of customer-centricity as getting customers to do what fulfills the company’s purpose, to getting the company to do what fulfills the customer’s purpose.
For those CMOs who aspire to move up and over rather than down or out, the job is increasingly to be a catalyst for change, engine for growth, and orchestrator of experience. It will require strong alignment with key stakeholders, new models of leadership, and a new playbook for success. Given the changes underway, every CMO should be asking themselves, “Which path am I on?”
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