The Financial Evolution of the CMO

One of the topics that has come up repeatedly on CMO Moves is the need for CMOs to expand their financial ownership and acumen to clearly articulate the growth impact of their marketing efforts. This vital skill not only brings alignment across the C-Suite and Board, but earns credibility and trust to invest further in the marketing function.  Here are some thoughts from a few of my guests on the financial evolution of the CMO.

THINK LIKE A CEO

Be a business person first

 “As a CMO, you have to be first and foremost a business person. Understand how your company makes money. What are the drivers of revenue? What are the levers that you have? How does marketing fit in and enable the performance of the company in total? There’s a need to connect the dots between marketing KPIs and the financial results of the company. Top line or bottom line. That is a very key role that the CMO has to perform, which means they need to understand the financials of the business and they need to have the credibility to carry it off with the senior executive team of the company. I think that is an extremely important development that's happening in the world of the CMO.” - Listen to Raja Rajamannar, CMO of MasterCard

Own your seat at the table

 “As a CMO, when you're invited to have that seat at the table, the biggest role that you can play is being the voice of the customer. Too often, the stereotype that I see CMOs playing is that brand creative person. Frankly I've met CMOs and that's what they love to do and you know, good for them. They don't have different aspirations and that makes their role very, very clear. But for those CMOs who have aspirations to run a business or run a division, I think you increasingly have to see your job as more than the brand creative person. You have to be a business problem solver, you have to think about growth, you have to understand how your company makes money, you have to understand your customer needs and opportunities. All of those things start to round out your language and your capabilities as a CMO." - Listen to Jeff Jones, President & CEO of H&R Block

A business major with a marketing minor

“I always say I'm a business major with a marketing minor. I grew up in roles where I mostly managed P&Ls or mostly managed really big chunks of businesses and didn't come up through the traditional ranks of brand or agency. But my aspiration really has always been to drive outcomes for consumer brands. Being a CMO is one amazing way to do that. I've had lots of different ways to do that, but I'm loving this way. … I'm a very data-driven person and the roles that I've had in my past before Visa and at Visa have been more performance marketing driven than brand marketing driven, so that is very comfortable ground for me. However, it's so important for brands to build an emotional relationship with their end customer base, whether it's a B2B customer base or a B2C customer base. Finding that right balance of art and science, and emotional and rational, is key.” - Listen to Lynne Biggar, Chief Marketing & Communications Officer at Visa 

Build the right ecosystem internally and externally

“In a way, my role has become more of a CEO of the marketing function. That's why I always speak about being a businessperson first and a marketing artisan second. My number one responsibility is ensuring that I am able to build a [talent] ecosystem internally and externally that delivers against those needs, against the insights needs, the media immediate needs, the communications needs, the product marketing needs and so on and so forth. So, I spend a lot of time focused on hiring, retaining, and developing talent. I spend a lot of time thinking through the capabilities that we want [to develop] alone relative to the capabilities that we're going to partner. Or the capabilities that we want to buy in order to deliver against this wider scope of the marketing function.” - Listen to Antonio Lucio, Chief Marketing & Communications Officer of HP 

FOCUS ON GROWTH

Refocus on growth through innovation

“When I was growing up in the marketing world, [the CMO role] was about creativity and the big idea and so many other things. But all of those things really boil down to this fundamental idea of growth. I think that's where, as an industry, we need to reset. If you look at the Fortune 100 just in the last year, I believe nearly 50% did not experience any growth, despite all the dollars that were invested. So that's our core challenge as we move ahead. But we also know that [company] growth is created by category growth more than anything else. True growth for a company, where you can really make a difference, is when you have category growth… and that requires innovation.” - Listen to Deborah Wahl, CMO of Cadillac 

Move from brand relevance to brand presence

“I started at Unilever right after college managing a brand P&L and my approach since the beginning was that I was the CEO of this company. It's a brand, yes, but I have the P&L so I need to manage the resources. And [as the person responsible for P&L], you are the one giving direction in terms of where those resources need to be allocated so the brand grows in a healthy way by achieving profitable top line growth and gaining market share…. It's that holistic view - from brand relevance to brand presence - that I’ve used since I started my career and continue using all the time. You start understanding that good marketing and building brand equity is done with one objective in mind - which is to have a healthy company that grows in a profitable and sustainable way.” - Listen to Nuno Teles, CMO of Diageo Beer Company 

CREDIBILITY FROM FACTS 

Link investment with results to earn C-Suite buy-in 

“One of the things that my leaders and I chat about regularly is how we can link the work that we're doing to the results they’re producing for the organization. I believe that the chair of the CMO has evolved significantly over the past five to 10 years. We’re moving away from simply being the creative person; from only operating with one side of the brain. The CMO now has accountability for using both sides of their brain - or at least for ensuring that their team can compensate for that. You need to ensure that you're able to measure the effectiveness of what you do in a meaningful way that allows you to get buy in from your C-Suite peers.”  - Listen to Terrance Williams, CMO & President of Emerging Businesses of Nationwide 

We must be data-led 

“As marketers we must be more data led, more insight led. There's no longer a reason or excuse not to know everything that is knowable out there. Every marketer I talk to is spending more time on how we can reach the people that we want to reach one by one; how we can use media - not necessarily programmatically, but in a very targeted way. For us, this means data-informed storytelling, data-informed campaigns; not necessarily data-led entirely, but certainly data-informed. When I get audience data, it just makes me hungry for more. So, we know this fact about a certain group of business decision makers that buy jet engines. What else can we know?” - Listen to Linda Boff, CMO of GE

Learn to speak their language

“The language that marketers speak is not the language that the rest of the organization speaks, and particularly finance. You would think that the number one responsibility is to enhance the brand. The brand is everything. But what does that actually mean in finance? Brand means something very, very different. And in fact, it’s an accounting term. It is an asset that in some cases, depending on FASB, if there's a merger with another company, you have to put the value of that brand on your books and if there is some significant impairment to the value of the brand, you need to report that as part of generally accepted accounting principles. And according to the SEC, there are strict rules the brand can never increase which defies logic, right? So there's the language of the accountants on brand and then there's what everyone has spent their entire careers learning about how to build a brand and they are two completely different things.” - Listen to Bruce Rogers, Recent Chief Insights Officer of Forbes, now Head of Marketing, Managing Director of The SITO Institute for Consumer Behavior and Location Sciences

Measure your ROI incessantly

“From a running marketing like a business perspective, my team does it like nobody else. We can measure the ROI of about eighty percent of our spend. I told our CEO that when I go to the board for the first time, I want to make sure that if I’m the CMO who shows a 30 second TV spot, I'm also going to talk about the marginal ROI of next best dollar spent on television. I'm going to talk about the incremental net new assets, contribution of marketing to the net new assets of the firm, and understand their language. Once you're armed with that kind of data and have a team who gets really get passionate about the numbers in the business and how to move the dials in an effective way… It’s intoxicating. And you can imagine how the board feels about that conversation. It's a lot more positive.” - Listen to Denise Karkos, CMO of TD Ameritrade

This article was originally published on CMO Moves, Tips for Success - The Financial Acumen of the CMO

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