There has never been a better time to be a marketer, but as a new study from McKinsey shows, CMOs and CEOs need to become a lot better at communicating ideas, collaborating and explaining the value of their work.
“Marketing’s moment is now,” Jason Heller, Mckinsey’s global lead for digital marketing told a busy room at Cannes Lions. “More so than ever before, the CMO is one of the most important members of the C-suite, and thanks to new technology, marketers now have the opportunity to power growth across an entire organization.”
Heller and his partner Biljana Cvetanovski were at the festival to present the findings of a new study that looked into the perception of CMOs held by the other members of the boardroom and, perhaps, more importantly, what CEOs are currently thinking and expecting from chief marketing officers.
With a focus on growth, the good news is that CEOs need and want more from their marketing departments than ever before. As business becomes ever more multi-channel and multi-focused, CMOs, with their grasp of creativity, innovation, insights and technology, have become engines of growth for many companies. But, the study asked, “how many out there are up to the challenge?”
“77 percent of CEOs now believe that marketing is delivering on their company’s growth agenda,” said Cventanovski. “Obviously, that means that one in four CEOs still don’t see their marketing department as a key area of returns for their businesses, but nevertheless that represents a significant change in thinking.”
In short, marketers need to think differently about their value to an organization.
“This means that marketing is no longer being seen as a particular set of skills, but as something more vital for commercial success,” explained Heller, picking up the story. “CEOs now are looking for their marketing departments to be the organizers of growth, partnering with the right departments to make things happen and driving through new initiatives. In many ways, the CMO’s role is evolving into an operational and well as a strategic role.”
However, while the relationship between CEOs and CMOs are becoming rosier, all is not well between marketing departments and their colleagues. The same study showed most CFOs remain extremely skeptical of the work that CMOs do. Over 40 percent of the financial executives questioned in McKinsey’s research told them that they wouldn’t consider protecting marketing budgets in a time of cost-cutting. It’s an unfortunate statistic, as countless studies have shown how ringfencing marketing budgets can play a significant part in helping companies maintain market share while times are tight.
The other member of the C-suite that is traditionally wary of the CMO is the chief human resource officer (CHRO), although not for any philosophical reasons. “We found that most of the time the CHRO and CMO’s poor relationship stems from not spending enough time together” explained Heller during the seminar. “We’d strongly advise that you start having coffee with the CHRO, because as marketing departments are becoming more dependent on these ‘whole-brain’ talents who can blend a super-analytical approach to insights and an innovative, creative outlook. You need to work with your HR department to be able to identify these people and create cultures and environments where they can thrive.”
So what, according to McKinsey, makes a successful CMO in the eyes of the boardroom? The study looked into the attributes and behavior of over 1500 senior-level marketers, and have come up with roughly three archetypes of the average CMO—the unifier, the friend and the loner.
The study found that only 24 percent of top-level marketers fit into the unifiers category, making them the smallest group, but definitely the most well-rounded. Unifiers can combine excellent communication and administrative skills with an ability to reach out to other members of the board. Mostly they focus on measurement and are adept at translating these metrics into what it means for revenue and business performance. As such, they often build true partnerships with other departments and are seen by their peers as crucial members of c-suite, able to contribute and lead critical strategic discussions.
On the opposite end of the scale, McKinsey has identified another 24 percent of marketers as being in the loner archetype. A foil to the unifiers, these CMOs are only interested in short-term activities, and consequently, most of the other heads of departments see them more as ‘doers’ than collaborators. “Most CEOs look at loners as real custodians of the brand,” said Cvetanovski. “They are seen as implementers of strategy and are not really involved in shaping what that strategy is.”
Last, and by far the largest group is the friend. With the study finding that 49 percent of CMOs fit into this archetype, they represent a kind of halfway house between the two other groups on the scale. And they tend to keep close relationships with one or two other members of the board. Usually, they are seen as responsible for top-line growth and manage and optimize a business’s various channels. The study found that friend’s departments were also quite small with very few capabilities, so they are seen as just another customer when it comes to data, insights or technology.
As you’ve no doubt realized by now, marketers who fit into the unifier role are typically the most effective. As the purpose of marketing becomes ever more integrated into operational activities, brand experiences and partnerships, the CMO who can build relationships and alliances across an organization has a winning skill. Unsurprisingly, McKinsey’s study found that particularly high growth companies were significantly more likely to have a unifier-like marketing executive at the helm.
“In fast-growing companies, more often than not, the CEO was the biggest champion of the marketing department,” Heller told the seminar. “Typically, there is a great line of communication between marketing and the chief executive, and there is real ambition on both sides—successful companies encourage their marketers to be brave and take risks.”
In return, unifier CMOs can make CEOs lives easier by clearly showing the business case of all marketing activity. They can digest a diverse range of views and information and distill it into a clear narrative that clearly explains the benefits and risks of their work. Unifier CMO’s can understand the entire customer journey like no-one else in the C-suite and their reward is that they’re allowed better and deeper oversight over a company’s strategy and operations.
Luckily, most marketers can easily adopt the trappings of a unifier CMO. “Most of you have the skills already,” said Cvetanovsk. “We’ve found that just adopting an innovative and collaborative mindset is one of the best ways to bake in success. You have to learn how to create and nurture partnerships.”
The CFO, for example, is typically the biggest critic, and we’ve shown that almost half of CFOs can’t really justify the value of the marketing department, but that just means that CMOs need to work with the CFO. If you make them a part owner of the marketing agenda, really plan and implement projects with them in the room, then you’ll also find that CFO will have a much harder time cutting a program that they are also personally invested in.
“Another thing you can do is to be best friends with the CHRO,” added Heller. “If the last few years have taught us anything, it’s that you need a diverse range of talents to succeed, yet 82 percent of Fortune 500 companies feel they don’t hire the best people and a third of all unifier CMOs said that they weren’t happy with the talent they had in their departments.” Getting and keeping talent is clearly very important. The only way we’re going to fix that is to work closely with HR managers out there.
However, perhaps the most critical factors most marketers lack is a combination of confidence and belief. One of the stand-out insights from McKinsey’s report is that despite marketing departments being called on to be a real engine of growth, most CMOs still have no idea of the amount of runway they have to do things. The report showed that not only do senior marketers need to get better at working with the other members of the board, they also need to get better at sticking to their guns and making clear, concise business cases for their decisions.
“Ironically, it’s something we have to look at like a communication problem,” said Cvetanovski in her summary comments. “Our challenge to the entire C-suite is this: how can you embrace marketing? How can you collaborate better? How can you make sure your CMO is empowered to act as a Unifier.”