Last year, I collaborated with CMO.com to conduct the first-ever “CMO Impact Study,” designed to help C-level leaders understand how the CMO impacts firm performance–and how to think about crafting a role to deliver better results.
The detailed results were available only to those CMOs who participated in the study, but some of the highlights are available to everyone here (PDF).
We took those learnings and, this year, expanded the survey to understand how the CEO might affect the CMO’s ability to make an impact. While detailed results will again be available only to CMOs who took the survey, I wanted to share a highlight from the research about tenure. The analysis is based on a total of 564 respondents, 223 of whom are CMOs or heads of marketing for their firms (regardless of title).
Indeed, tenure is a hot topic among C-level leaders and, in particular, marketers. Starting with Spencer Stuart’s 2004 report indicating that CMOs have exceptionally short lifespans, this metric has had long-standing interest.
As part of this year’s study, we investigated the relationship between CEO/CMO tenure and firm-level marketing capability. Marketing capability is the degree to which the firm is better (or worse) at managing marketing activities than their peers. Of note, in our study, the firms that have higher levels of marketing capability (top tertile) have significantly higher average market share (average of 29%) versus firms with low marketing capability (bottom tertile, with an average of 18% market share)–indicative of the powerful relationship between marketing capability and market share.
With that as a backdrop, we found some surprising results regarding tenure and marketing capability. In our sample, the CEOs have significantly longer tenure (median of six years) than do their CMOs (median of three years). This is consistent with other studies that show the CEO typically has greater tenure than the CMO.
However, across both CEOs and CMOs, higher tenure is related to stronger marketing capability. CEOs in high marketing capability firms have 35% more months in their jobs than do CEOs in low marketing capability firms, and CMOs have 15% more months, suggesting that continuity in both the CEO and CMO roles can, perhaps, improve the firm’s ability to develop better marketing capability.
This also suggests that a revolving-door approach to marketing and firm-level leadership could be quite costly for companies. New CMOs and CEOs often want to put their “stamp” on their companies, and this could lead to a new direction for marketing. Changing directions makes sense only when business conditions warrant it–not just because new leadership has come onboard. This high cost associated with turnover might not be one CEOs or boards consider when making decisions to replace leaders.
Stay tuned for more results from the “2015 CMO Impact Study” in the next few weeks.