Booz Allen Hamilton Report

Are CMO's Irrelevant?
Executive Summary

Marketers are in the binds of a paradox. Although new communications technologies, fragmenting audiences, and rising customer demands for increasingly individualized products and services would seem to render their knowledge and skills more relevant than ever, senior marketing executives say they are receding further from the centers of influence in their companies.

In collaboration with the Association of National Advertisers, the leading U.S. marketing trade organization, Booz Allen Hamilton surveyed 370 people at more than 100 companies in nine industries in an attempt to discover whether marketing is in fact disconnected from the leadership agenda, determine the causes of any dysfunction, and uncover the best practices of superior marketing organizations.

The study found three organizational dichotomies hindering the effectiveness of marketing organizations:

1. More than 75 percent of marketers and non-marketers say that marketing has -become more important to their companies during the past five years. But at more than half of all companies, marketing and the CEO agenda are not aligned.

2. Higher expectations for marketing have driven nearly 70 percent of all companies to reorganize their marketing departments during the same period. But a major component of many such reorganizations-- the position of chief marketing officer-- remains ill-defined.

3. Measurable outcomes are now expected for marketing programs- 66 percent of executives say true ROI analytics are marketing's greatest need. But most companies are still 'using surrogate metrics, such as awareness, instead of ROI measurements.

Among other recommendations, the ANA/Booz Allen study advises that companies clearly choose from among three emerging CMO models—Marketing Service Provider, Marketing Advisor, or Driver of Growth—to find a role appropriate to the individual company. The study also recommends companies develop an "expectations" contract between the CEO and the marketing organization that sets a clear organizational structure; establishes decision rights; promotes the development of capabilities, such as ROI analytics and consumer insights; and encourages appropriate risk taking in pursuit of business-building ideas.

This full 7 page PDF report can be found at www.boozallen.com.
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CMO REPORTS

Why bother with Word of Mouth, or its acceleration?
According to a Brand Autopsy Report of 6/22/2005 factors driving the trend toward shrinking CMO tenures include misaligned performance expectations, over-promising and under-delivering, and a poor cultural fit.

What are the top CEO priorities? According to Booz Allen Hamilton they are top-line growth; speed, flexibility, adaptability to change; customer loyalty and retention; and stimulating innovations.

If you haven’t seen the viral on Accelerated Contagion, or want to review it, click here.

From a recent study by the CMO Council—“tech marketers ranked lead generation as the most important way to measure marcom performance.” What’s your ROI for “qualified” lead generation activities?

The Brand Autopsy Report
The Shrinking Tenure of CMOs

If you work in the marketing department of a mid-to-large size organization, you have no doubt experienced the arrival of a Chief Marketing Officer parachuting in to rescue the brand by barking orders and acting as a supreme agent of change.

Six months later, the only changes are a severe drop in morale of the marketing department, drastic strategic changes in the marketing creative, and ultimately... the company CHANGES its mind and dumps the CMO. Sound familiar? (It does to me.)

Spencer Stuart, a global executive search firm, has recently issued a report on the shrinking tenure of CMOs. Their "CMO Tenure: Slowing Down the Revolving Door" report analyzes the performances of marketing execs of high-ranking brands to determine what is driving this trend and what can be done to reverse the CMO revolving door.

Interesting nuggets from this report include:

CMO Tenure Slats

• Average tenure for CMOs: 22.9 months (at the top 100 branded companies). Average tenure for CEOs: 53.8 months.
• Only 14% of CMOs for top global brands have been with their present company for more than three years.
• Nearly 50% of CMOs for top global brands are within 12 months of being on the job.

The Business Impact of Shrinking CMO Tenures

• Companies often face financial hardship with incoming CMOs due to changing strategic marketing direction and to being out-of-the-market for an extended period of time.
• Many times the new CMO challenges their predecessor's strategy resulting in the current ad agency being fired or put into a tailspin of unproductivity.
• The morale of the marketing department suffers greatly as the new CMO will many times bring in outside "hired guns" to lead the development of marketing strategy.
• By bringing in an outsider to lead the marketing department, it raises questions regarding the career path for the company's star marketers.

The Factors Driving the Shrinking CMO Tenure Trend

• Misaligned performance expectations between the CEO, the CMO, the board of directors, the shareholders, and the media can cause major rifts within the company.
• Over-promising and under-delivering by the CMO because s/he doesn't fully understand the complexities of the company's business strategies and the challenges in navigating through operational issues.
• A poor cultural fit between the ethos of the CMO and the company's cultural credo.

Actions CMOs can take to Lengthen their Tenure

• Incoming CMOs should speak with either the outgoing CMO or other former Sr. Execs to gain perspective on the company's strategic direction and the reputation of the marketing department.
• To build initial credibility, new CMOs can promote a few employees within the company who embody the "gold standard" of performance.
• Convey a positive attitude towards the company's prior marketing efforts and do not assume all previous work was off strategy.
• Spend the first 60 to 90 days in assessment mode and then choose two or three impact areas to focus on for the short-term and the long-term.

This story courtesy of Brand Autopsy, administered by Williams + Moore.
See more at http://brandautopsy.tvpepad.com.