CXOs will be needed to captain the 21st Century Commercial Model
Brad McLane and Giovanni Lamarca of ZRG Partners recently published a “2021 Market Landscape: – entitled CMO, CGO & BU President – Roles, Responsibilities, And Interactions.” This interesting piece asserts that the continued need for growth – exacerbated by the pandemic – is forcing companies to embrace deeper structural and organizational changes, especially in customer-centric functions like Marketing. I recently spoke with Brad and Gio who were kind enough to elaborate on their observations and the implications of these insights.
COMPANIES CHANGING TO DELIVER ON THE NEW GROWTH IMPERATIVE
Historically, growth has been an art form for some while it’s been a science for others. In light of the rising digital age, greater customer control and even the global pandemic, companies are now asking many fundamental questions about what their real “growth drivers” are and who in their business is actually managing them. Specifically, the ZRG report points out that one “hot seat” in the executive ranks is the Chief Marketing Officer (CMO). Increases in accountability, digitization, and data-centric precision are forcing a “pivot” and a rethink of the role, responsibilities, and structure of the CMO.
This sounds kind of ominous, especially for the marketing professionals out there! Maybe. Brad sees a “seismic change” resulting from “tectonic shifts” but also says that “it’s probably more appropriate to call it an evolution of the [CMO] role.” The important thing is to identify the metamorphosis of the marketing leader from a “faith-based role” that focused on brand and communications with “no way to really quantify” impact to someone who has “an expectation for not only delivering demand generation but linking it very closely to revenue generation.” According to Brad, “Marketeers would come in and say, ‘believe me, I’m going to take care of it.’ And there were no metrics, no way to really quantify what this person did. Move it up to the past few years we’ve seen this role evolve and more demands, more metrics applied. And so now there’s an expectation for not only delivering demand generation but linking it very closely to revenue generation.”
In our conversation, Gio noted that “the world is changing because [the] customer is changing.” Yes, technology has become an enabler and a disruptor, but the root cause of change is simple: “consumers are driving that because they want better.” Better what? Better everything! “I think the opportunity now is still really to delight the consumer . . . It is to understand through data what the consumer expects, demands that they expected, in which shape and format that they expect. So, if you look at marketing . . . I think today the consumer will define what the position of your brand as he or she sees it is, and then you have to work around it. So, the understanding of the consumer would generate these opportunities because otherwise you will be selling or trying to generate growth in a vacuum. And this is not going to happen.”
IMPLICATIONS FOR MARKETING AS A FUNCTION, THE CHIEF MARKETING OFFICER AND BEYOND
What does this all mean? For marketing leaders and organizations, agility and collaboration will be key. Brad says that the CMO role “now needs to evidence more adaptability, more agility and responsiveness to peers and colleagues in the organization. We see a more dynamic engagement rather than the old silos.” In his view it’s outdated for a CMO to think that “everyone can be a marketer, but I am the head of marketing. Keep away! This is my silo. I’m going to protect it.” That approach just doesn’t work anymore, Brad says, because “there’s this dynamic, multidimensional aspect to the [CMO] role, where it fits in and what it does across executives.”
As dynamic as this all may be, Brad also warns that the realities are “extremely situational.” In fact, Brad suggests that what’s really going on is the “deconstruction of the chief marketing officer role” into different profiles based on the needs of the company and the expected value of marketing as a function or activity. Warning: for some of these profiles or archetypes, a traditional CMO might not even be required. For example, if the primary focus is on enhancing brand equity, maybe that’s better left to a marketing services resource outside. And then you just need someone to manage that relationship.” Or conversely, the more the impact from marketing tilts toward revenue generation, the more that skillset might better reside with the business unit leadership or in the sales organization – because that’s where revenue resides.
Third, the human capital strategy relied on by CEOs, HR leaders and even boards must adapt. While functional experience and skills are still required to drive growth, much more attention should be spent on finding the right fit in terms of behavior, culture and mindset. Giovanni points out that “there’s a huge opportunity right now for companies to rethink some of their talent strategy. To re-engage individuals that fit into a culture of growth; that have the ability, almost a passion to work cross functionally and to go beyond the scope. I always say: don’t ask for your job description – write your own job description. And make sure that in that job description one of the priorities in your focus area, regardless of the function that you exercise, is growth.”
MY TAKE: THE EMERGENCE OF POSITIONLESS “CXOs” WHO EMBRACE THE AMBIGUITY
I applaud the authors for calling out and articulating a challenge most have not addressed for a long time. Igniting growth should always be the core of any sales, marketing or product role, yet such clarity is not universal. Frankly, the tremors about ambiguity and changing mandates for the CMO role have been around for some time as an introspective exercise within the marketing community. As a former 3x CMO and former BU President and Chief Commercial Officer, I can confirm that these signals have been around for a while, and the challenges are real. I even wrote about the “CMO Identity Crisis” back in 2015. The ZRG Market Landscape adds two important elements. First, the very source of the report suggests that fundamental, even existential change is happening. Here are two world-class executive recruiters in the sales and marketing space talking how these changes are affecting behavior of people outside the marketing function, namely among the CEOs and boards who make decisions about the leadership, governance and structure across the whole company. That’s definitely worth paying attention to.
Second, this ambiguity and these changes are not confined to Marketing; they extend into traditional Sales and Service functions, too. Many functions are blurring. While “Chief Revenue Officer (CRO)” has become a popular title in IT companies in recent years, how are the lines drawn between CROs and Chief Commercial Officers, Chief Growth Officers and even Chief Digital Officers? Titles will vary company to company, and an identity or label change for an executive role might signal something more meaningful, but the challenges don’t disappear based on nomenclature. The rise of agile executives in business mirrors some of the same things we see with “positionless players” in professional sports. The underlying challenge here is a lack of standardization in how to drive growth and in the delineation of the roles need to manage it. Today companies and boards are still trying to match traditional roles against new ways of serving customers, new channels to market and new sources of creating value for shareholders and customer . . . Just like some coaches force talented, multi-faceted players to operate with the confines of an outdated position description. No one wins by jamming these square pegs into round holes.
Ambiguity could turn out to be a necessary and even good thing. Growth is a team sport, and curation fosters collaboration better than legislation or strict orders. At the Revenue Enablement Institute (REI), we call people who work well and drive growth in this new environment “CXOs:” a new generation of growth leaders who are transforming their commercial models to accelerate revenue growth and adapt to the new customer buying realities. These are the leaders that blend sales, marketing, service and product into a new 21st Century commercial model that uses common purpose, a shared “operating system,” teamwork and new digital selling motions to maximize productivity and impact for all stakeholders. In fact, these new CXOs need to serve as champions for the overall customer experience (CX) by tracing CX elements across all touchpoints: marketing, sales, operations, finance, etc. Perhaps that’s the path forward.
Advocating such change touches on a lot of people’s jobs and will often push up hard against corporate cultural inertia. Change is hard, and many don’t like it. Brad and Giovanni are pointing out some real consequences of the renewed growth imperative, starting with a re-examination of marketing governance. Nevertheless, success in aligning all the pieces will unlock growth in ways most never see and likely lead to radical business performance improvement. That should be everyone’s goal.