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THEY GOT IT: Reebok's Uli Becker, Saatchi's Ian Rowden and
GE's Beth Comstock are examples of CMOs who have made the move to
CEO.
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The bean counters are finally getting it too. The Financial
Accounting Standards Board is beginning to understand that "fair
value" accounting for the brand is the only way to accurately
report the one asset in the company that has the ability to grow in
value, while all other assets only depreciate.
Consequently, boards of directors are now demanding management
report the statuses and values of their corporate brands. With the
momentous changes taking place in the corporate world, it's no
wonder boards are asking for continuous reporting on this
significant asset.
If the CEO doesn't have a strong finger on the corporate brand,
chances are the board will demand to know why this asset is lying
fallow. How can a CEO effectively manage a corporation without
using all available assets? CEOs who dismiss the corporate brand as
fluff will pay the price in terms of their own credibility with the
board, and if they refuse to modify their views, don't be surprised
to see CMOs taking their places.
CEO-in-training
I believe the CMO spot offers logical training for the CEO
position. A CMO has a panoramic point of view and, thus, has a more
important and valuable leadership-training position than someone
who has gained status and power through finance or through other
vertical silos within a company. While you can hire CFOs and
general managers, a true leader must have a wider outlook, and most
CMOs instinctively have that perspective.
Objectively analyze the CMO's job, and obvious correlations to the
CEO-job requirements become quite clear. CMOs are required to
benchmark all business units market by market around the world,
align the CEO's vision with company culture and business processes,
and consistently communicate this information to all stakeholders.
They need to project and justify budgets based on sound principles
and to forecast return on investment. And they need to be sure all
these activities contribute to the positive financial performance
of the company, which includes increasing revenue and contributing
in a measurable way to stock-market performance. If this isn't
ideal training for the CEO position, I don't know is.
Below are some examples of CMOs who have already made the move to
CEO:
- CMO Uli Becker was named
president-CEO of Reebok, replacing Paul Harrington, who resigned
after a 12-year stint with the company.
- Ian Rowden, former CMO of Wendy's,
became the chairman-CEO of Saatchi &
Saatchi's Asia-Pacific region.
- Patrick Gibbons, CEO at Country
Style Food Services, was former CMO at Burger King Canada.
- Robert Bruce, former head of
marketing of Rogers Wireless, became its president.
- Alex Krstajic, former CMO at Bell
Mobility, became its president.
Interestingly, Beth Comstock, the former CMO of GE, became
president of integrated media for NBC Universal. While Comstock has
returned as GE senior VP-CMO, I believe GE is grooming Beth for a
top spot in the company.
So why didn't it happen sooner? The first generation of CMOs, whose
tenure was brief, didn't understand their purpose in value creation
and reporting. They were forced into a vaguely defined role that
was created more out of a sense of fashion than practicality.
Without the established rules of engagement, the incumbency of
early CMOs, according to a 2006 Spencer Stuart study, was only 23.2
months.
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ABOUT THE AUTHOR
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James R.
Gregory is founder-CEO of CoreBrand. He has written four books
on creating value with brand, including 'The Best of
Branding.'
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While the present second generation of CMOs still doesn't fully
understand how to account for brands' value, they are slowly
learning. They are much savvier about
C-suite culture and have a better perspective on what is required
of their position.
Financial experience
The third-generation CMO, however, will fully embrace the impact of
the brand on both the revenue and the reputation sides of finance
and will have responsibilities for all communications, not just
marketing communications. This means the investor-relations role
will become a dual responsibility, with CMOs responsible for the
tone and much of the content of the message. This third generation
will represent the CEO's vision throughout the company and hold key
managers accountable for leveraging the brand at every touchpoint
and identifying where and why it is creating value. Obviously, this
third generation will be fully prepared to take over the helm as
CEOs.
The present Achilles' heel of CMOs is the lack of experience in
finance, and, without a doubt, the lack of this vital skill is the
biggest obstacle to their ascension to higher levels of leadership.
Most CMOs have risen through marketing or communications, where
there is little need for strong experience in finance or accounting
except during interactions with CFOs at budget time.
When a CEO attends a financial analysts' meeting, the CEO, CFO and
the investor-relations head are usually presenting to an array of
know-it-all analytical zealots. These jackals find great joy in
stumping the corporate panel with obscure questions about the
company's financial performance.
That's why it's extremely important for all would-be CEOs to begin
regular training in reading financials. If you are the CEO in the
boardroom and someone asks about the current ratio or anticipated
cash flow next quarter, you'd better darn well have a good handle
on any requested information. Even if your CFO is sitting at your
right, your credibility will be damaged if you don't have a
complete knowledge of the terms and the answers.
Getting this education is an easy fix, given the prestigious
schools offering finance and accounting programs for nonfinancial
execs. Gain this experience and guarantee your successful
transition to CEO.
Five reasons why CMOs will move into the corner
office
1. TRADITIONAL ACCOUNTING STANDARDS ARE PASS?.
New "fair-value" accounting methods will emphasize corporate growth
on intangible assets. Assets that used to be called goodwill are
now understood to compose the corporate brand.
2. CMOS ARE RESPONSIBLE FOR MANAGING BOTH PRODUCT BRANDS AND
THE CORPORATE BRAND.
Understanding both sides of this dual, value-creating equation
provides a unique opportunity to harness the power of the money
machine called the corporation.
3. IN THEIR ROLE, CMOS GAIN A WIDER POINT OF VIEW OF THE
CORPORATION
than executives who are in the traditional management tracks to the
CEO position. Very few leaders who come from other disciplines have
such a panoramic perspective.
4. CMOS HAVE INQUIRING MINDS AND ARE WILLING TO TRY NEW THINGS
THAT WILL ENHANCE THE BUSINESS.
They also understand how to limit risk by testing marketing before
larger bets are made. There will be fewer bet the company gambles
with a CMO at the helm.
5. BOARDS ARE NOW MORE INTERESTED AND RESPONSIBLE FOR EXAMINING
THE WHOLE CORPORATE PANORAMA,
so they need a CEO who can paint the vision of the future and
describe how all the parts are functioning for the good of the
whole. CMOs are well trained to articulate a vision.
