Missing your sales targets: Don’t blame your CMO
In a recent HBR article about short CMO tenure, the authors of the article identified that nearly 60% of all CMOs have been in their position less than 3 years. 40% less than 2. To fix the turnover rate, the authors see a solution in recruitment. They advise CEOs on how to design better job descriptions by clarifying expectations, aligned with the role’s actual responsibilities. These changes are well-needed, but their solution solves the symptom not the problem. The focus on the HR component is salve not a cure.
Readjusting expectations and recruitment does not remedy the organization’s need for sustainable growth. Over time, the adjusted role is likely to fail again because it does not remedy the accelerating need and inability of every company to address new fundamental challenges. Problems like industry shifts and evolving consumer behavior are creating gaps between the skills of CMOs, their teams, and other executives. These gaps cannot be replaced with skills or the right person.
Shifting Industry Paradigms
In June, we witnessed competitive paradigm shifts in the grocery industry (Amazon and Whole Foods), women’s apparel (Amazon again), the US Healthcare Market (House and Senate Bills), International Air Travel (Qatar and American Airlines), Retail in Canada (Sears bankruptcy), and TV Advertising (YouTube reached 1.5b daily viewers). These are just a few examples of changes that put pressure back on the CMO role.
Evolving Consumer Behavior
It’s a risk to use oneself as a data point for proof and explanation, but my changing attitude toward my car illustrates the evolving consumer dynamic. Having moved to New England a few years ago, I carried my gentle southern expectations in to the contact sport called Boston rush hour. After a few years of trying to drive 2 miles to work in under 40 minutes (ha ha), I finally sold the car. I moved closer to the office and now walk to work. Initially I used public transportation for groceries and errands. Then Uber – until Amazon Fresh expanded their service last week.
Good luck accurately targeting my consumer profile over the last few months. I went from car owning commuter to a virtual shopper that has everything delivered. I am still getting catalogues for car accessories, calls from my car dealership for service, and offers from the gym along my old commute. I am sure these misguided efforts will not last forever but the time lag for learning creates inherent inefficiency in marketing that is reinforced by blame. CMOs who are being judged on this lag are not being treated fairly. Rewriting their job descriptions will not improve CMO ability to adapt to consumer changes. Before reviewing the recruiting plan, companies need to reassess the strategy for learning in an age of unprecedented change.
Learning not blame
So today we hope to kill the myth of the marketing superstar. The unicorn hire that will magically solve a company’s marketing problems. The issue of business success through marketing is more complex and requires reconsideration in four areas.
- Culture – At some point we must come to terms with the idea that people are limited. Despite any HR program or any breadth of recruiting, no organization will have the capacity to solve all problems just through their people. Hard to understand dynamics and unimaginable solutions will require new methodologies. Business will require a narrower view of human capacity and in doing so open the door to technologies like machine learning that will augment the intelligence of their teams. Without this notion becoming something that people trust, it will be hard to create change that closes the gap on missing knowledge. Who wants to admit they are challenged if the culture says acknowledging a challenge is a weakness not a strength?
- Process – Today most planning approaches to understand market dynamics are backward-looking. Planning is done once or twice a year with techniques that are historical in nature and driven by statistical procedures. Learning will require a brand-new paradigm. Solving problems will fall into a scientific process where the company establishes a hypothesis, produces a forecast, and judges that hypothesis by in-market results. Accountability will not be focused solely on the forecast accuracy, but rather what was the cause of the error in the forecast. Was it data? Was it assumptions? Or was it some unanticipated action or actor in the market. The goal will be to understand forecast error.
- Structure – With a clear picture of the nature of error, companies will design processes that systemically reduce error over time. CMOs who can lead this process will put together cross functional teams that have both creative and analytic capabilities to address error. Their work will become more focused on improving the issues that throw their company off course. Structures that are hierarchical will have to collapse. Cross-functional networks of people who collaborate will rule the day and team composition will agilely evolve over time.
- Expertise – A focus on culture, process, and structure will change the orientation of a business from blame to learning. A learning culture will dramatically change the role of the CMO. The expertise required will likely change from a creative plus analytics to a systemic view of how marketing works. Interactions in the market and amongst the team will be key skills that ensure an orderly installation of a system that enables learning.
CMO turnover is a symptom of an organizational design problem. Most organizations today look at marketing as a department. A CMO as a hero savior that will make marketing work better. That may have been true when marketing was just a matter of media spend. But now the CMO is the point person for industry, consumer, technology and business change. Unless this understanding becomes the core idea in an organization, most CMOs are likely to fail and companies will struggle to meet their growth targets. But don’t blame the CMO – it probably is not their fault.