A view from the boardroom
For all the criticism of being just a ‘cheerleader’ function, marketing could contribute significant value to a business. McDonald’s ‘I’m lovin’ it’ initiative changed its fortunes. From being under siege, comparable second-quarter global sales of McDonald’s in 2004 went up by 7.8 per cent, the biggest Q2 jump in over a decade.
Yet, a recent report by recruiters KornFerry has found that the average Chief Marketing Officer (CMO) stays in the job for just 4.1 years. That is half the average tenure for a Chief Executive Officer (CEO) at eight years, and less than a Chief Financial Officer (CFO), Chief Information Officer (CIO) and a Chief Human Resource Officer (CHRO).
So, what capabilities now define a successful CMO? Here is what I’ve observed from my five years discussing transformation and growth in various boardrooms.
Owner of customer advocacy
At its heart, marketing remains about how well we understand the needs and desires of our customers. And, how compelling a customer advocate we could be within the boardroom to fellow functional/sales leaders or even the board.
As Iain Ellwood has shared in his book Marketing For Growth, Porsche, a premium car brand, found that many of its mostly young male customers had very high loyalty scores for the brand, until they reached their 30s. Porsche realised they then started families that their sports cars couldn’t comfortably accommodate.Porsche’s response was to introduce the four-door Cayenne sports utility vehicle (SUV). The resulting boost to profits through sales of the Cayenne was 22% in 2011.
A business leader, first and foremost
If we’re distressing over input KPIs such as clicks and traffic, and believe deep in our heart that the sales organisation is responsible for the final sales or profitability, we’re losing the plot.
Chief Marketing Officer Council (CMOCouncil) and Deloitte released findings from a global study in May 2018 which revealed CMOs agree that revenue is the top measure of growth for the organization (95 percent) and for their own personal definition (70 percent). However, while the business also considers gross margin and market share as the second and third indicators of growth, marketers instead look to brand valuation and customer acquisition shifts, highlighting a disconnect in how growth is fundamentally measured.
In my experience, a small number of successful CMOs are asking to own accountability for sales KPIs and profitability in a channel or business unit. It enables them to know what happens when rubber hits the road. When Howie Lau joined StarHub as CMO, over and above his Marketing functions, he was also tasked to oversee StarHub’s Entertainment &SmartLife and Media Business Unit divisions.
Be the scrap-collector for data
Leaders are now hungry for data they could get from any part of the business or bona fide external sources. Why is it so critical? Machine learning is fast defining better user experience (UX).
If you think of an artificial intelligence (AI) or machine learning (ML) algorithm as a child, it ‘grows faster’ the more data it gets over time. A CMO who can connect the various sources of data to draw valuable lessons and help AI grow faster, would hold the key to future success.
Katina Lake, a fellow alumnus from Harvard Business School, is transforming retail at StitchFix with its use of data & and machinelearning.From the time a Stitch Fix subscriber signs-up for the service, they begin to collect every single bit of data they can gather about the customer & and her preferences. With an AI-assisted personal buyer, Stitch Fix has developed a far deeper understanding of its customers and it turns it into sustainable business success.
In the CMO Council-Deloitte study just 7 percent of respondents said they are the data guru that understands the voice and expectations of the customer.
Influence the culture
Marketing is now more complex than ever before. McKinsey quoted the CMO of Philips Healthcare as saying, “What makes a “great” marketing plan? The entire organisation”. Although it sounds simple, organisations often struggle with it.
I’ve learnt it the hard way. As the Regional Head of Retail Marketing in my previous company, I felt quite proud of my team when we finally rolled-out an improved premium product in a country. Curious to see how customers were responding to it, I visited one of our retail outlets there. Pretending to be a customer, I asked the retail assistant, “What is this poster all about”?
After struggling for a minute, he turned to me and said, “Oh, it’s just some marketing gimmick”. I was appalled and crestfallen. There died our new product!
I somehow resisted the urge to immediately call my country General Manager. Instead, I engaged my marketing leadership team – we intensely discussed and debated it, till we agreed marketing must stop being the sole & and silo decision-maker on our marketing plans.
We moved to a new planning method called “Lab” where we involved everyone – from colleagues in supply chain, global product managers, to area sales managers, retailers and even some of our retail assistants. The relevant country sales GM and I would jointly sponsor the Lab. These Labs changed our planning and execution culture all the way to the last mile – now we communicated in a way that our frontline staff understood the product and owned the initiatives.
Together with other programs to improve service excellence, we grew our brand scores and product sales. Our Labs worked even when we bought over the network of a competitor and progressively converted its retail outlets to our brand.
Partnerships define your influence
Internal partners such as CIO and CFO are critical. So are our agency partners – a motivated agency lead can make a big difference in several areas. But, you should also try to play a role in developing and nurturing some external C-level relationships. Of course, it is important you align with your sales colleagues so there are no fractured external interfaces.
As a creative, out-of-box thinker, a CMO can often create breakthrough opportunities with a partner. Also, it forces us to think about our marketing programs and how to ensure it gives us an edge with our enterprise partners.
At NTUC Membership, we’re turning our unique C-suite partnerships with MNCs in the U Circle of Friends of the Labour Movement into a sophisticated #subscription based, bite-sized learning and networking platform, complete with visits to closed-door #Innovation Labs. Converging data signals from our mobile app, marketing engine & B2B partners help us choose the right audience for the right topics. Hailed as the #Spotify of learning by the national media, UFLX creates a unique value proposition for our members to see and experience the future.
For the CMO who can do well in the areas above, he or she could well be positioning him/herself for a future CEO role.As Michele Kessler, the President and CEO of thinkThin, a privately held nutritional food company told the Forbes magazine, many of these traits helped her progress from being CMO at Mars, to a CEO now.