The Trust Problem in the CEO/CMO Relationship
If we think of a company as a team, the CEO is the coach of the team, and the chief marketing officer (CMO) is in charge of the offense. The COO, CTO, and other executives are in charge of the defense. Whatever the metaphor — team, ship, orchestra — the point is that everyone needs to contribute significantly to an organization’s goals in order to have a winning company. In other words, no team member — including the CMO or the CEO — can operate independently.
In an ideal firm, the CMO partners with the CEO to drive revenue and meet business goals. When the marketing department works flawlessly with the CEO, the company truly benefits. In fact, a recent study by the Aberdeen group found that in top-tier companies, an impressive 60 percent of sold products and services came from leads that were nurtured and supported in marketing. This is in contrast to bottom-tier companies, where the percentage was only 9 percent. So, if a CEO wants to have a profitable company, seamless integration and excellent communication with the marketing head are undoubtedly essential.
Naturally, not every relationship is ideal, and there are many companies that have CEOs and CMOs suffering from communication breakdowns, unaligned visions, and different approaches to customer service — among other executive maladies. The question then becomes twofold: What is the real problem? And how do we fix it?
An Issue of Trust
If we want to resolve CEO/CMO functionality, it’s important to understand the root of the cooperation problem. Last year, 1,200 CEOs from large- and mid-size companies were surveyed. Of those interviewed, 80 percent said they did not trust their CMOs. Now, one could surmise that CEOs are inherently skeptical toward their senior staff, but the very same study showed that 90 percent of CEOs trust their other chief officers. This points to trust being one of the main issues of the divide. But why is there a lack of trust in the first place?
The answer has to do with upbringing, in a way. Most CEOs come from an operational background, rising up through finance, legal, IT, and other such departments. Studies show that CEOs have the tendency to hire other team members, including executives, who have similar operational backgrounds. So it’s quite likely that a company’s CMO might be the odd one out when it comes to his background, making him an easy target for distrust. People with operational backgrounds focus on process-driven, logical, measurable, and repeatable results, and because of this, they often view marketing as an expensive, imprecise, unaccountable, or even “fluffy” department.
When there is this kind of rift in a company’s leadership, business results are obviously not as good as they could be. The CMO’s opinions are not as trusted as others’, and the CMO is often seen as a lesser member of the executive team.
Just like in any other relationship, trust and communication are integral between a CEO and CMO. However, a rift is by no means insurmountable. Here are five things your company leadership can do to both prevent problems and strengthen bonds:
Include everyone: The CEO must consider the CMO a member of the executive team first, and in charge of marketing second. All members of the executive team work together; no department is pushed off to the side. There are no silos. This harmony needs to be clearly conveyed throughout the company. To achieve executive unity, there should be monthly staff meetings where everything is laid on the table, as well as periodic retreats where executives spend time brainstorming company strategy.
Command accountability: The CEO should hold the CMO accountable for results. This includes requiring a monthly data-driven analysis meeting. During the meeting, the CMO should present data-driven results and avoid distracting anecdotes. It’s best to determine just a few metrics together (if the CEO asks for too many, then focus is lost) and report on what is being done to improve them.
Recognize diversity: Because the rest of the executive team is likely to come from an operational background, it is highly important that everyone recognizes that a great company needs diversity, which a CMO will bring. It is the CEO’s responsibility to make sure the CMO is given equal weight.
Involve everyone: The CEO needs to lead the whole company in embracing the new marketing reality. Digital and web-based strategies shouldn’t be left only with the CMO’s team. Get the entire company involved.
Have a holistic approach: CEOs should start viewing the CMO’s role more holistically. To help with this, many CEOs are even changing their CMOs’ titles to “Chief Revenue Officer” or “Chief Customer Officer.” This is purely a case of semantics; it’s more important to develop a different approach to the CMO’s duties. Because the CMO’s job is to develop, nurture, and support qualified leads until they are ready to become satisfied clients, the CMO needs to have input into systems, billing, and customer retention practices.
In short, cooperation is the name of the game for company success. To achieve that, CEOs need to accept that the diversity a CMO brings to the executive team is a good thing. Additionally, the CEO should keep the CMO well-informed about general company processes. Company departments are no longer silos; evolve accordingly, and everyone wins.
Barbara Fowler is the Managing Director at Chief Outsiders, a provider of part-time marketing executives to help mid-sized businesses. Fowler’s specialties lie in sales and marketing synchronization, global business strategies, and family business turnaround techniques. A frequent speaker and writer on topics such as leadership, cultural diversity, and developing an environment of success, she has effectively led culturally diverse organizations and written and implemented training programs for CMOs worldwide. Connect with her on Google+.