The C-Suite Handbook: Lessons for the Modern CMO

Our previous whitepaper in this series, Long Journey to the Top: Trends for the Modern CMO, walked us through key trends for CMOs and their teams:

– Longer CMO tenures – Faster budget growth for Marketing – More people than ever within reach of your messaging

But each of those boons have a caveat. CMO tenures aren’t as long as those of some other executives—and they aren’t graduating to chief executive nearly as often as their colleagues in Finance. CMOs are under rising pressure to demonstrate the value of Marketing. And everyone is able to reach out to your customers, meaning you face an uphill battle for attention.

How can chief marketers lead their teams to overcome these challenges? One idea is to learn from your peers in the C-Suite.

Introduction

This whitepaper will delve into three lessons from other corporate departments that CMOs can employ.

Displaying Enterprise-wide Expertise Extending tenures and becoming promoted to the head of a company is a function of your demonstrated, cross-functional acumen. Learn how CFOs and their teams did so with the help of analytics.

Making Sound Tech Investments Making the most of your resources means, in part, making long-term tech purchases in a crowded marketplace. CIOs and IT teams do so by leaning on tech expertise and roadmaps based on business capabilities.

Systematizing Creativity Turning heads means enabling your team to be as novel as possible. Research and Development may be the only department with a larger mandate for creativity and ideation; what drives the creative output for R&D teams?

Lessons from Finance: Displaying Enterprise-wide Expertise

If you traveled back to the early 1970s and visited a corporate office, you wouldn’t find many people thrilled about the Finance department. “Bean counters” were seen as having purely governance-based roles, tracking the flow of money in and out of a company and monitoring compliance with policies and regulations.

Chances were there might not be a CFO at all; it took until 1978 for about a tenth of companies to have a chief finance officer, according to a Princeton University study that examined 429 large US companies. Finance employees were effective at their roles, but few saw them as potential business leaders. So why have CFOs become frontrunners when it comes to CEO succession?

It would be wrong to believe it was any one thing. Several factors, like tougher accounting regulations and rise of financial markets in the 80s, drove the importance of the CFO to the enterprise.

But one action that Finance took to maintain its prominence—which Marketing is in a position to emulate—is to tap into the information it has and grow its analytics capabilities. Doing so let finance teams expand the scope of their responsibilities from “bean counter” to strategic partner.

Today, analytical competencies are critical for the function. Sixty-one percent of CFOs said the ability to interpret key data trends is essential for some or all of their finance staff, according to a Robert Half Management Resources survey of 2,100 US respondents.

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Previous CFO experience Promoted directly from CFO

Source: Crist/Kolder Associates

Financial Background of CEOs Appointed at Fortune 500 and S&P 500 Firms

These new capabilities have allowed Finance to advise different business units on investment decisions and better allocate resources to other departments, demonstrating the cross-functional applications of its accumulated information.

It works particularly well because there’s a financial overlay for every part of the enterprise; company divisions must work with the money they have to make more money, so it’s natural for the “money” function to invest in its ability to make data-driven recommendations. Take a look at how Finance teams today are steering the enterprise using the financial data they have access to below.

Marketing’s Analytics Capabilities Marketing is in a position to deliver similar enterprise-wide recommendations by gleaning customer-centric insights. If Finance is the “money” function, Marketing is the “customer” function, and businesses can’t succeed without customers.

The modern CMO has more access than ever to data about how customers become aware of the brand, their path toward purchases, and which experiences bring them back to the brand for more.

Indeed, Marketing’s use of certain types of analytics has been growing in recent years and a survey from Deloitte found that 55% of respondents said their marketing and sales groups invest in analytics, second only to finance.

Of those, what percent do you estimate that the company’s executive team, in hindsight, would reverse or change?

9%

Source: CEB

In the past 12 months, what percent of major investment-related decisions did Finance support?

90%

Finance’s Value to the Business

80%

In what percent of these decisions was the advice of Finance followed?

Source: The CMO Survey by the Fuqua School of Business at Duke University

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Customer Acquisition Customer retention Social media Product line/assortment optimization Branding Multichannel marketing

February 2015 February 2014

By Type of Analytics

Percentage of Companies Using Marketing Analytics

The stage is being set for CMOs to beef up its analytics capabilities. Unfortunately, the current value of Marketing’s analytics to company performance is low:

At the same time, Marketing plans to increase its spending even more on analytics in the coming year:

Making the most of the budget allotted to analytics means building your expertise. For a quick introduction in this area, download our cheat sheet for understanding your marketing data.

Beefing up your analytics capabilities also means making a well thought-out investment in the right piece of technology. There are other experts you can look to in this area.

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August 2012 February 2015

3.93.7

3.53.7 3.7

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Mean response

“To what degree does the use of marketing analytics contribute to your company’s performance? 1 = Not at all and 7 = Very Highly”

Source: The CMO Survey by the Fuqua School of Business at Duke University

Value of Analytics

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Current Levels In Next Three Years

Source: The CMO Survey by the Fuqua School of Business at Duke University

Percent of Marketing Budget on Analytics

Lessons from IT: Making Sound Tech Investments

A mandate to spend money wisely is attached to Marketing’s growing budget. But as we’ve stated, the marketing tech arena is crowded. ChiefMarTech depicts almost 2,000 vendors in the graphic on the right.

It’s the kind of marketplace that, when combined with rapid budget growth, can lead to the infamous “Frankenstack”—a hodge-podge assemblage of tools and data islands that aren’t integrated and aren’t working in concert.

Possibly the only other function facing a more confusing technology landscape is IT—which, naturally, is concerned with evaluating IT purchases of all types.

So how can Marketing make better investments?

1. Build and Hire Tech Experts This is an obvious imperative for the IT department—by nature, the department’s success has always depended on its tech competencies.

It’s time to realize that now, Marketing’s success does too.

The information you gather from customers, how you segment them, the way you distribute messaging, and the way you produce content are all reliant on technology. That means your team relies on IT skills, just as IT relies on them.

And your company knows it. “Hardly any client is requesting someone without a strong component of data analytics or someone who doesn’t know how to lead a team of more tech-savvy people,” said Thomas Seclow, head of the Marketing practice at Spencer Stuart, on the CMO requests his recruitment firm receives. CMOs don’t “necessarily need a tech background...it can be someone who can lead teams, who understands strategically what the business needs to be successful,” he said.

But less than half of “Chief Marketing Technologists,” the individuals entrusted with procuring marketing systems, have a background in technology, according to creative agency SapientNitro.

Source: ChiefMarTech

In addition, SapientNitro found that marketing technologists assessed several tech-related areas as among their worst skills, including system performance and resiliency, advertising technology and multiple omni-channel enabling technologies (e.g. in-store experience technology and geo-targeting), and information security.

Marketing must follow IT’s example of investing in its knowledge of technology and infrastructure. Smart system investments and a proven ROI won’t come before.

2. Build a Roadmap for Your Department After building a roster of IT experts, Marketing should create a technology roadmap that focuses on building the department’s capabilities and advancing business objectives rather than bells and whistles. Would that next tool really advance your marketing team’s abilities to plan and create campaigns, distribute messaging, and assess performance—or are you just intrigued by the number of features per dollar? Refresh this document regularly to keep up with changes.

Forrester suggested the following steps for creating a marketing technology roadmap; work with your IT group for help as you progress through them.

Define marketing goals and strategies What are your objectives—and what’s your department strategy for achieving them?

Establish the current baseline Take stock of the technology you have in place today.

% of CMTOs Claiming as Strength Skill

0.6 In-venue/In-Store Experience Technology

0.6Physical Computing and

the Internet of Things

0.5 Tag Management and User Management (United User Profile)

0.4 Loyalty Programs

0.4 Media Planning and Buying

0.3 International Marketing/ Translations/Legal Issues

0.3 Digital Ad Networks and Real-time Bidding

0.2 System Performance and Resiliency

0.2 GIS, Geomapping and Geotargeting

0.1 Information Security/Firewalls/Encryption/Data Recovery

Source: SapientNitro

Understand future needs What capabilities do you need for the future, whether those revolve around improving customer interactions, creating better content, or distributing messages better?

Define capabilities gaps: After taking a look at where you stand, what you need, what needs fixing?

Establish priorities Which gaps are most important to close first?

Define options What technologies could get you across the finish line?

Understand linkages and dependencies What projects should you undertake to close the gaps, and in what sequence? Build the business case What level of investment is required, and what benefits can your department expect?

3. Ensure User Adoption. Finally, make sure that you own the rollout and user adoption of any new purchase; technology is a waste if it isn’t being used. In a survey of 1,700 CMOs, 47% said “tool implementation issues” and 36% cited “lack of technological ownership in marketing” as barriers to using new technology.

Consider a strategic approach to your rollout in order to drive user adoption. Try limiting initial rollout to the workers most excited about the new purchase. They can act as champions for the technology and discover best practices before a larger deployment. These advocates will be in the best position to explain why colleagues should use the system and the best ways to do so.

The information you gather from customers, how you segment them, the way you distribute messaging, and the way you produce content are all reliant on technology.

Lessons from R&D: Creating a System for Creativity

Marketing’s a creative function. It has to be, if it wants to grab the attention of customers who have never spent more time with digital media thanks to mobile.

But if there’s any other corporate function that’s more on the hook for reliably being creative, it’s the R&D team. Unlike Manufacturing, which depends on its ability to produce goods in the same way over and over, R&D’s mandate is to regularly generate new ideas that can fuel corporate growth.

The only way to do that on a consistent basis is to create a system that allows ideas to flow and that lets the great ones progress to the development stage.

Here are some ways you can improve the number and quality of ideas in your department.

1. Hire the right talent.

Creativity is a team effort, whether you’re in R&D or Marketing—but creativity starts with people, so make sure you have the right individuals on board.

Look for the people or agencies with a strong record of producing inspired work on a regular basis.

For R&D, this likely means STEM talent that has completed interesting research and product development projects at other companies; for Marketing, you’re looking for copywriters, authors, designers, and other content producers with portfolios you can examine.

Select those whom you can rely on to be motivated on your behalf to produce great work.

2. Give your talent the right mix of guidance and freedom.

R&D teams have boundaries that inform their workflows—they know what industry segment they work in, the company’s business objectives (and may have been instructed to solve a specific problem), the legal regulations the company must comply with, and what resources the organization has at its disposal.

But creative R&D scientists also stressed freedom of choice as highly conducive to their work, researcher Thomas Heinze found. Freedom in this area can also make your talent feel valued.

For Marketing, boundaries come in the form of a well-crafted brief that lays out a challenge to conquer. They also come in the form of the assets that make up your brand identity. There are some brand attributes that shouldn’t change, so creatives need to know to adhere to those rules—or have good reason to break them.

P&G teams and scientists conducted in-depth interviews with consumers. What they found was that even habitual cleaners and organizers can have smelly houses (because they own several pets, for instance)—but people think their homes smell just fine on a day-to-day basis.

Instead of designing a product that asks buyers to change the way they clean, then, P&G pivoted to position Febreze as part of existing cleaning rituals. Among other things, the R&D team added perfume to the product, giving it a distinctive smell that greets customers at the end of cleaning day. Sales doubled in two months. Eventually, it became a common household item.

Marketing similarly needs to understand which campaigns work, which ones failed, and why. In the business world, no one wants to expend effort on work—creative or not—that doesn’t contribute value. Gathering intelligence and analyzing helps companies create a closed-loop system that continuously improves.

It paves the path for creatives to create more content that will better resonate with customers. And it empowers CMOs to make their departments—and their companies—a more customer-centric environment.

Aside from these stipulations, give your creative talent space to explore novel concepts within these bounds. That’s when creative work can happen.

3. Enable communication between small groups.

Large groups of people have a larger base of knowledge. But research on the creative output of R&D departments has found that small groups are better at creative work. This is because people are more outspoken about their ideas, communication can happen more frequently, and you don’t lose track of what you’re doing as often.

To get the advantages of both, Heinze suggests that departments organize into small teams but facilitate informal interaction of these groups. The best do this by creating teams with complementary expertise and knowledge.

4. Gather performance data to review and improve.

Proctor & Gamble created Febreze in the 1990s—a product designed to eradicate odors, changing the way people clean.

The result was a cheaply manufactured, scentless liquid that removed odors exceedingly well—and low sales, despite heavy marketing campaigns, according to The New York Times.

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Victor Gamez Victor Gamez is an associate on Percolate’s marketing team.