Don't Count the CMO Out

Forgive me for what feels like an overly academic and long blog post for yours truly but I can’t emphasize enough how significant the challenge/opportunity space is that sits at the intersection of the CIO + CMO as well as their evolution within the rapidly changing C-suite...so here we go.

67% of CEOs have lost confidence in their CMOs (and their direct reports).

76% of CMOs don’t have a gameplan.

17% of CMOs are crushing it.

In a recent survey by Accenture (link here) of 935 global CMOs and 564 CEOs, there were findings that demonstrate the severity of the concern CEOs have around the ability for CMOs to deliver including the following:

• “Incumbent CEOs, for their part, aren’t particularly optimistic. Two in three don’t believe that their current marketing leads have the leadership skills or business acumen required for the role. And, CEOs are equally unconvinced that the next generation of marketers will be any more capable when they eventually take the reins.”

To make matters worse, the Accenture survey also implied that the vast majority of CMOs don’t have a solution…

• “More than 75 percent of CMOs now admit that past formulas are no match against the new breed of disruptors that seem able to win, time and time again, by delivering more relevant customer experiences.”

So to play that back, 67% of CEOs have zero confidence in not only their current CMOs but also the direct reports of their CMOs. And assuming Customer Experience is the future of Marketing which is as safe an assumption as any (link here) 76% of CMOs acknowledge that they don’t have a plan to fix the problem…

To make this emerging trend even more real, in a well publicized article by Ad Age’s E.J. Schultz titled “Why More Brands Are Ditching the CMO Position” more fuel was added to the fire:

• “Companies are consolidating marketing duties with executives who have broader mandates that often include sales and commercial functions such as product development, retail oversight and more.”
• “It’s almost as if the word ‘marketing’ itself needs a marketing campaign because it no longer encompasses all that goes into building brands and growing revenue. ‘We’re at that tipping point where we’re trying to decide what marketing really means in this era.’ says Keith Johnston, VP and research director serving CMO professionals at Forrester, noting the rise of data-driven communication.”
• “’Nobody is saying marketing is going away’ says Bob Liodice, CEO of the Association of National Advertisers. The larger question is how the art and science of marketing is ‘melded together to create the best growth opportunities.’”
• “Historically ‘CMOs were all about outbound marketing and ‘we tell the customer who we are, what we stand for.’ Now it’s all about having a conversation with the customer being two-way,’ Sharp says. ‘That’s often why these titles are changing, because the way companies are marketing has become a balance of left-brain, right brain. It’s no longer all about creative.’”

Just as the CMO has been in decline, the rapid rise and evolution of the CIO has enabled them to have a broader remit in areas that several years ago would have been CMO territory. Relevant highlights from IDG’s “2019 State of the CIO” study include:

• “As part of their expanded portfolio, CIO respondents are taking ownership of projects and work products in other areas such as operations (43%), business development (38%), customer service (32%), and product development (29%).”  
• “These new areas of responsibility come at a time when CIOs are transitioning away from the heavy lifting of planning and deploying IT infrastructure and redirecting their focus to monetizing and productizing new goods and services for digital business.”
• “More than half of respondents participating in the 2019 State of the CIO survey (62%) counted the creation of revenue-generating initiatives, including new products and services, as part of their evolving job descriptions.”
• “One of the most important efforts IT organizations are taking to support business innovation is learning about customer needs - a task now embraced by 55% of responding IT leaders. The newly-empowered IT leaders are also creating teams to focus on innovation (47%).”  
• “IT organizations are lacking other critical skills to support digital transformation. While technology skills were the biggest gap - 50% percent of respondents said they were in need of technology integration and implementation skills - soft skills were equally in short supply. Forty percent of respondents said they were in the market for employees with change management and strategy building skills while 32% were targeting project management acumen and 25% looking for business relationship management skills.”

A couple questions to consider?

Have CEOs overestimated the impact CIOs can have on the business while underestimating the impact CMOs can have on the business? More importantly, have they made a mistake by thinking about this as an “either/or” question instead of an “and” question when it comes to the CIO and CMO?

I believe the pendulum has swung too far and CEOs have made the understandable mistake of overestimating the CIOs role in large part because of the initial successes they’ve had in leading Digital Transformation efforts. At the same time, CMOs haven’t helped themselves as they’ve been slow to embrace more measurable ways to demonstrate the impact creativity can have on the business and they haven’t leaned into the opportunity to collaborate with CIOs to enable the next wave of growth.

What about the 17% of CMOs that are “crushing it”?

Returning to Accenture’s analysis (link here), only 17% of CMOs are designated as “pioneering CMOs” who are driving successful business outcomes via Customer Experience improvements. Relevant highlights include:

• “Pioneering CMOs are not just exploring these new directions, they’re actively rethinking their own roles...They’re taking on the role of organizational architect.”
• “They make the customer central to their thinking and vision, not just in the services they provide, but in how they pivot and adapt as a company.”
• “They’re focused on getting the right capabilities in place to deliver exceptional customer experiences and deploying and developing the best talent in support of that goal.”
• “They are constantly seeking alternative sources of growth, be it through reinvention of the customer experience, breakthrough innovation or entirely new revenue streams.”
• “The great majority of marketing organizations soldier into the future with the operating models of the past; for example, only 14 percent of companies prioritize breaking down barriers between marketing, sales and service functions.”
• “In fact, they’re 26 percent more likely to say that marketing should own the customer record throughout the customer journey—from first contact, all the way through to sales and service—and that marketing should be able to leverage and benefit from the insights derived from that data.”
• “They recognize that a crucial means to unlocking growth is by breaking barriers: whether that’s silos within their marketing organizations, dissonance between their marketing organizations and the rest of the company, or unrealized opportunities among their agencies and ecosystem partners.”
• “They are building alliances with HR, sales, finance, the CIO function, and others to develop and implement the systems, processes and mindsets necessary to deliver the most relevant customer experiences.”
• “I now have finance people embedded in the marketing team with channel leaders— they look at every dollar spent and help to optimize the mix.” Similarly, as agility on the technology front has become more integral to his marketing objectives, his relationship with the CIO is now more important than ever. “The amount of time I spend wiring up my different technologies and making sure that the data all lands in one placeand can be used by all channels—that’s huge. That’s complex. So now we have a marketing technology team which sits in the CIO organization but reports into the CMO and sits on our leadership team.”And, finally,he notes that his exchanges with the chief product officer have taken on a new and greater velocity—relaying feedback about member services, product reviews, and social media posts, for example, which are put to use in product and service innovation.”

Where do we go from here?

Of all the info above, the most important part is the last bullet that describes the CMOs operating model that is delivering results that are clearly driven by their successful collaboration with the CIO as well as a number of other key company stakeholders. What’s especially interesting is the operating model is driven by a work methodology that powers both “DevOps” in the CIO’s world and “Growth Hacking” in the CMO’s world.

Bottomline, organizations that are struggling to find growth can be cautiously optimistic that things can be turned around by collaboration between forward thinking CMOs and CIOs tied to their embrace of a shared work methodology.  

Next steps?

Start small, deliver results and scale.

As a first step, there are two books worth reading:  

• “The DevOps Handbook - How to Create World-Class Agility, Reliability & Security in Technology Organizations” (link here) by Gene Kim, Jez Humble, Patrick Debois & John Willis
• “Hacking Growth - How Today’s Fastest-Growing Companies Drive Breakout Success” (link here) by Sean Ellis & Morgan Brown

As a second step and to jump start cross-functional collaboration co-led by the CIO and CMO, consider bringing your humble-confident leaders across the organization together to start a conversation around excerpts from each book. That way you can bridge the CIO and CMO camps while identifying a small cross-functional team and a couple initial growth goals to go after.  

Without a doubt, there are a massive amount of thought provoking ideas to consider from each book but to get the ball rolling here are 15 that jumped off the page at me:

"The DevOps Handbook" by Gene Kim, Jem Humble, Patrick Debois, John Willis

1. “DevOps is the outcome of applying the most trusted principles from the domain of physical manufacturing and leadership to the IT value stream. DevOps relies on bodies of knowledge from Lean, Theory of Constraints, the Toyota Production System, resilience engineering, learning organizations, safety culture, human factors, and many others. Other valuable contexts that DevOps draws from include high-trust management cultures, servant leadership, and organizational change management.” (page 4)
2. “Furthermore, high performers were twice as likely to exceed profitability, market share, and productivity goals. And, for those organizations that provided a stock ticker symbol, we found that high performers had 50% higher market capitalization growth over three years. They also had higher employee job satisfaction, lower rates of employee burnout, and their employees were 2.2 times more likely to recommend their organization to friends as a great place to work.” (page xxxiii)
3. “When new learnings are discovered locally, there must also be some mechanism to enable the rest of the organization to use and benefit from that knowledge. In other words, when teams or individuals have experiences that create expertise, our goal is to convert that tacit knowledge (i.e. knowledge that is difficult to transfer to another person by means of writing it down or verbalizing) into explicit, codified knowledge, which becomes someone else's expertise through practice. This ensures that when anyone else does similar work, they do so with the cumulative and collective experience of everyone in the organization who has ever done the same work.” (page 42)
4. “In high-performing organizations, everyone within the team shares a common goal - quality, availability, and security aren't the responsibility of individual departments, but are part of everyone's job, every day... Reflecting on shared goals between Development and Operations, Jody Mulkey, CTO at Ticketmaster, said, "For almost 25 years, I used an American football metaphor to describe Dev and Ops. You know, Ops is defense, who keeps the other team from scoring, and Dev is offense, trying to score goals. And one day, I realized how flawed this metaphor was, because they never all play on the field at the same time. They're not actually on the same team! He continued, "The analogy I use now is that Ops are the offensive lineman and Dev are the 'skill' positions (like quarterbacks and wide receivers) whose job it is to move the ball down the field - the jobs of Ops is to help make sure Dev has enough time to properly execute the plays.” (pages 84-85)
5. “If possible, we will free the transformation team from many of the rules and policies that restrict the rest of the organization, as National Instruments did, described in the previous chapter. After all, established processes are a form of institutional memory - we need the dedicated team to create the new processes and learnings required to generate our desired outcomes, creating new institutional memory. Creating a dedicated team is not only good for the team, but also good for the performance engine. By creating a separate team, we create the space for them to experiment with new practices, protecting the rest of the organization from the potential disruptions and distractions associated with it.” (page 67)
6. “Organizations that struggle with financial debt only make interest payments and never reduce the loan principal, and may eventually find themselves in situations where they can no longer service interest payments. Similarly, organizations that don't pay down technical debt can find themselves so burdened with daily workarounds for problems left unfixed that they can no longer complete any new work. In other words, they are now only making the interest payments on their technical debt...Cagan notes that when organizations do not pay their "20% tax," technical debt will increase to the point where an organization inevitably spends all of its cycles paying down technical debt. At some point, the services become so fragile that feature delivery grinds to a halt because all the engineers are working on reliability issues or working around problems.” (pages 69-70)
7. “Today, organizations adopting DevOps principles and practices often deploy changes hundreds or even thousands of times per day. In an age where competitive advantage requires fast time to market and relentless experimentation, organizations that are unable to replicate these outcomes are destined to lose in the marketplace to more nimble competitors and could potentially go out of business entirely, much like the manufacturing organizations that did not adopt Lean principles.” (page xxiii)

"Hacking Growth" by Sean Ellis & Morgan Brown

1. “If this iterative process sounds familiar, it's likely because you've encountered a similar approach in agile software development or the Lean Startup methodology. What those two approaches have done for new business models and product development, respectively, growth hacking does for customer acquisition, retention and revenue growth. Growth hacking adopted the continuous cycle of improvement and the rapid iterative approach of both methods and applied them to customer and revenue growth. In the process, the growth hacking method broke down the traditional walls between marketing and engineering in order to discover novel methods of marketing that are built into the product itself, and can only be tapped with more technical know-how.” (page 12)
2. “How bad has the crisis of traditional marketing become? A recent McKinsey study of publicly traded software companies showed absolutely no correlation between marketing investment and growth rates. Zero. Another study, of CEO's views of traditional marketing, conducted by Fournaise Marketing Group, reported that '73 percent of CEOs think marketers lack business credibility and are not effectiveness-focused enough,' and 72 percent of CEOs agreed with the statement that marketers 'are always asking for money but can rarely explain how much incremental business this money will generate.” (page 21)
3. “And while the details of how it is implemented vary somewhat from company to company, the core elements of the method are: the creation of a cross-functional team, or a set of teams that break down the traditional silos of marketing and product development and combine talents; the use of qualitative research and quantitative data analysis to gain deep insights into user behavior and preferences; and the rapid generation and testing of ideas, and the use of rigorous metrics to evaluate - and then act on - those results.” (page 13)
4. “Put simply, every company needs to grow their base of customers in order to survive and thrive. But growth hacking isn't just about how to get new customers. It's about how to engage, activate, and win them over so they keep coming back for more. It's about how to adapt nimbly to their ever-changing needs and desires and turn them not only into a growing source of revenue, but also passionate ambassadors and an engine of word-of-mouth growth for your brand or product.” (page 15)
5. “Growth hacking is a new fundamental business methodology that all companies, and every founder, every corporate team leader, and every department head and CEO who wishes to meet high expectations, produce meaningful results, and achieve their business goals with limited investment and maximum return on their marketing dollars must adopt.” (page 26)
6. “All that said, making acquisition efforts as cost effective as possible is always good business, and all companies should always be striving to spark strong word of mouth in order to reduce the expense of acquiring new customers. The growth hacking process is designed to help discover the most cost-effective ways to acquire new customers - and then optimize those efforts to drive growth.” (page 142)
7. “Growth cannot be a side project. Without clear and forceful commitment from leadership, growth teams will find themselves battling bureaucracy, turf wars, inefficiency, and inertia...In larger companies, which may have multiple growth teams, the teams should report to a Vice President or C-level executive who can champion their work with the rest of the C-suite. Support for these methods at the highest rungs of the organization is critical to the team's sustained success.” (page 47)
8. “Any kind of company can, and should, work to keep increasing the value it's delivering to customers and their level of engagement over time.” (page 207)

As a third step, stand-up your cross-functional Growth Team and GET AFTER IT! ;)