CMOs under pressure to develop new skills

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Facing intense pressure and high expectations from top management, CMOs are developing new cross-functional skills to survive the hot seat.

This new breed of CMO must possess not only traditional marketing skills such as brand strategy and product marketing but a breadth of capabilities including operations management, process development, financial analysis and strategic decision-making.

While their role has been evolving over the past 10 years, now is a critical time for CMOs, as they wield tremendous influence in corporate strategy, new product development, marketing investment and the overall health of the company.

The pressure is high on CMOs: The average tenure for the position shrank to 23.2 months in 2006 from 23.5 months in 2005, according to a study last fall by executive search firm Spencer Stuart.

"I worry about what will happen to the future of marketing leadership because of the turmoil—the short life span [in the CMO position], the pressure and the high expectations," said Greg Welch, global practice leader of the CMO practice at Spencer Stuart.

He pointed to the departures of several high-profile senior marketers this year, including Marc LeFar, former CMO of AT&T's wireless unit; Jerri DeVard, former senior VP-brand management and marketing communications at Verizon Communications; and Jim Garrity, exec VP-CMO of Wachovia Corp (who will retire July 1).

Expectation gap

While expectations are high for CMOs, there is often a gap between what CEOs expect from their top marketing leaders and actual performance, according to a study released last month by the CMO Council.

The study found that nearly three-quarters of CEOs and board members consider the marketing organization "highly influential and strategic" in the enterprise, but nearly two-thirds say that their top marketers don't provide adequate ROI with which to gauge marketing's true performance. The study also found that only about 40% of CMOs received an "A" grade from CEOs on their performance.

The report was based on interviews with more than 1,200 senior marketers, 300 CEOs and board members, and 35 corporate recruiters.

One of the main problems, said Brian Regan, senior VP at the CMO Council, is that the role of the CMO is not clearly defined and articulated by the CEO and the board from the outset.

"Typically, you have senior marketers who are hired who are not ultimately synching up with the objectives and expectations that the CEO and board members expect the CMO to have," Regan said.

"We have been advocating more clearly defining the role and putting the right person in there—not just marketers who have brand-building skills, but cross-functional expertise. They have to be partners in strategic decision-making," Regan said.

Michael Gerard, director of the CMO Advisory Practice at research firm IDC, agreed: "Companies are not doing the best job identifying the skills that the CMO needs. There is a general lack of credibility given to marketing, and we see this with respect to the investment that is made in marketing."

In a study released last month, IDC identified successful marketing leaders based on internal marketing operational efficiency and execution in the marketplace.

"You have to be adept at handling different kinds of functional areas," Gerard said. "You have to be able to drive process development in the organization and have a financial mind-set as you're looking at driving innovation."

One of the marketing leaders identified in the IDC study was Brian Gentile, exec VP-CMO of data integration company Informatica, who has been in his job for about a year.

Gentile said that when he was hired, the expectations of his position were clearly defined by senior management.

"There is a certain breadth and depth to what is typically referred to as the office of chief marketer," he said. "There is the artful, creative side, which includes marcom, advertising and branding, and then there are sales development activities, which span into product marketing and product strategy."

Gentile added: "In terms of depth, you have to have the ability to influence not only what the company is doing from its outbound strategy but, ideally, you have to have influence directly into sales strategy and field-based, go-to-market strategy."

When Gentile came on board, one of his first priorities was to more closely integrate the marketing and sales organizations, which required deep operational expertise that he had gained while serving as CMO of Ariba and then Aspect Communications. He also served as chief quality officer at SunSoft, the software division of Sun Microsystems.

"Everyone has to work toward a common set of metrics," Gentile said, pointing out one of the common reasons for disconnects between sales and marketing organizations. Now, the sales and marketing teams at Informatica have a common set of definitions, metrics and goals they are working toward.

"One of the most important is an agreement between sales and marketing about what percentage of leads should come from marketing activities and what percent should come from sales activities," he said.

Spencer Stuart's Welch said that to be successful, CMOs need to focus on aligning themselves with the CEO's objectives as well as forming relationships with their counterparts in other departments.

"If I'm a good CMO, during the courtship I am going to ask the CEO what the five-year plan looks like, and within that, where can marketing touch that," he said. "You have to be almost exclusively focused on helping the CEO work on their agenda."

Martin Etherington, VP-marketing at Tektronix and one of the marketers featured in the CMO Coucil's "Define and Align" study, concurred.

"It is incumbent upon the incoming CMO to solicit success criteria," Etherington said. "Quite often, the executive staff and board are not even sure what they need."

Etherington said that during his recruitment at Tektronix, he spent three to six months meeting with executive staff, heads of business units and sales executives to ask one simple question.

"I asked them, `What would it take for me and my group to get an `A' on my report card in a year's time?' I heard hundred of wants, but very, very few needs."

Now in the job for five years, Etherington said the marketing department is 100% accountable and measurable, and it aligns its metrics with the strategic objectives of the company. He also agreed that developing cross-functional skills is imperative for successful CMOs.

"If you are going to have any credibility internally with the board and key constituents—CEOs, CFOs and the heads of business units—you'd better well get familiar with the basics of a P&L and what you are doing in terms of contributing to the business."

The development of cross-functional skills also makes CMOs stronger candidates for top leadership, as demonstrated by former General Electric Co. CMO Beth Comstock's promotion to president of NBC Universal Digital Media, a GE division.

Janice Chaffin, former CMO of Symantec, who was also named as one of IDC's marketing leaders, was recently promoted to president of Symantec's consumer business unit.

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