“CMOs Rapped for Having Zero Impact on Sales.” That was the headline from Ad Age summarizing the results of one of the only CMO studies to date that has looked at the impact CMOs have on firm performance.
The research was conducted by Pravin Nath and Vijay Mahajan, professors at Drexel University and the University of Texas, Austin, respectively, and was subsequently published in a leading academic marketing journal. The study looked at whether the absence or presence of a CMO in one of the top paid positions in a firm had any impact on the firm’s financial performance. Their results were disheartening to many who might believe that, in fact, CMOs matter.
While some articles published during the past three decades by academics suggest that CMOs are having a decreasing influence at the level of corporate strategy, other articles suggest an increasing role for CMOs. Given the inconsistency in perspective, I’ve interviewed more than 100 individuals during the past two-and-a-half years regarding the CMO’s role. More than 50 percent of the interviews were with CMOs, while the balance was with subject matter experts.
Some insight I gained:
• CMOs–and their positions–vary: The reality is that there is tremendous variance across firms in terms of the CMOs themselves, the roles they play, the role of marketing in the firms, the roles that others on the top management team play, the culture of the firms, the firms’ leadership, and so on. While few would argue that CMOs universally have an impact on sales, at the other extreme few would argue that they universally don’t have an impact. My interviews clearly suggest that there is a range in the impact that the CMO can have.
• Many variables are outside of the CMO’s control: Additionally, several factors are outside of the CMO’s control: industry norms (in some industries, marketing simply isn’t as important/powerful of a function); the firm’s historical norms (in some firms, marketing has/hasn’t historically mattered); and macroeconomic factors (consider what it would be like to be a CMO at a private jet firm in 2005 versus 2009).
• The firm’s power structure can impact the CMO’s success: To a certain extent, the senior team of a firm is like a gang. There is an informal power structure that can significantly help or hinder a CMO’s effectiveness. Unfortunately, this can not often be discerned through the typical interviewing process. One CMO suggested: “I joined a firm only to find out that the head merchant ran the company. While I was technically a peer of the SVP, the merchant had the trust and confidence of the CEO and drove decisions. As a new member of the leadership team, I’m not sure how I could have changed this relationship to have a better opportunity to influence decision making. It’s tough to be an outsider to a 10-year trusted relationship between the CEO and the head merchant.”
• However, we don’t know how the CMO actually impacts firm performance: Given the mixed academic and practitioner articles, it is unclear whether CMOs have any real impact or, if so, how they do. In the interviews with subject matter experts (non-CMOs who hire/fire/work with CMOs), many suggested that many CMOs have a significant impact. It’s just unclear when and how CMOs have an impact.
As a result, I’m conducting research, in collaboration with CMO.com, leading academics, and CMOs to understand at a much more granular level how and in what ways CMOs can impact the firm. This is the first study of its kind--and the most comprehensive CMO study--as we seek to understand the relationship between the CMO role and the firm’s financial performance. We invite you to be a part of this study by taking a short, 10-minute survey (click here now). By participating, you will get a full report regarding how CMOs impact firm performance (only respondents will get the complete report), as well as our undying gratitude!
As we get preliminary data, I will be posting updates on our learning monthly, so check back. If you are a CMO and have specific insight that you’d like to share, please contact me @kimwhitler. I will also be conducting CMO interviews to include in my monthly posts to help shed light on how CMOs impact the firm.
Survey Link: https://iu.qualtrics.com/SE/?SID=SV_eXuJiYn2aMa71Sl