The Chief Marketing Officer - A New Boardroom Role Needed
The Chief Marketing Officer (CMO) has become one of the more commonly talked about corporate designations in recent years. Given the tremendous marketing potential offered by the new media and proliferation of distribution channels, companies have begun to realize the huge potential of marketing in guiding corporate level strategies and substantially contributing to the financial bottom line.
In spite of such an understanding, it is startling to note that the average tenure of a CMO is merely 23 months compared to a CFO that typical lasts 4-5 years on average. Further, not many companies have a senior marketing representative in their C-suite. This begs the question - do companies need a CMO or is the role of a CMO a mere hype?
As the business landscape evolves, marketing also evolves into an organization wide strategic discipline. Given marketer's knowledge of the customers, it is imperative that the CEO and the corporate board have a representative of the customer to continually educate them. Additionally, companies need a strategic CMO to benefit from:
Align marketing with the corporate business strategy
Newer technology, powerful channel partners, and empowered customers have made the competition highly intense and marketing a very involved and strategic discipline. Marketing can no longer be confined to the 4P framework. Marketers, with their in-depth knowledge about markets and customers, should act as a major resource for strategy formulation.
In all issues of corporate strategy - what markets to compete in, what segments to target, what entry mode and strategy to adopt, which partners to strategically ally with - marketing offers substantial information. In order to convey these holistic perspectives, it is imperative the marketing is represented by the CMO in the corporate boardroom who can speak to the directors and the CEO in their language.
A classic example is of the iPhone from Apple. Given the tremendously successful iPod and iMac, Apple could have become complacent. But the marketing acumen of the executives recognized the need to constantly excite the customers. Further, they built their growth strategies on satisfying the unmet needs of the customers. Marketing played a crucial role in guiding Apple's corporate strategy.
Connect the corporate boardroom with the customer
As Peter Drucker said, the only two functions of any organization are innovation and marketing. Irrespective how innovative a company is, how committed the employees are, and competent the top management is, unless the company connects with the customer, success will be elusive. The top management should constantly evaluate their strategic decision in the context of customer feedback - what do the customers' value and how can the customers help the company in co-creating value.
CMO plays a crucial role in constantly updating the boardroom and the CEO about latest customer preference, how well the corporate resources are aligned to meet hose evolving customer needs. Companies such as Levis Strauss, Sony, Toyota, Nike and Singapore Airlines are some of the pioneering companies that manage to constantly feel the pulse of their customers. As such, the marketing takes a central role in guiding the corporate strategy by having the top management team and the CEO regularly updated about customers and markets.
Create a customer centric organization
Given the innumerable choices that customers have, ensuring long term customer loyalty and sustainable competitive advantage becomes highly challenging. The difference between the successful companies that achieve those objectives and those who fail is the corporate orientation. Customer oriented companies design and operate every aspect of the company with the customer in mind.
To build a customer centric organization requires a highly concerted effort of all functions within a company along with every employee becoming a customer champion. These issues deal with organizational culture, organizational structure and corporate policies. The CMO can influence the boardroom and the CEO to implement measures that would allow to build a customer centric organization.
Banyan Tree Hotels and Resorts is a classic example that showcases such a customer centric philosophy. The founder has managed to instill a culture that allows constant interaction between marketing and other functions with the company. Such an emphasis has resulted in world class resorts that always manage to delight the customers.
It is evident that CMOs are strategic requirements of any corporate boardroom. But in spite of such a significant role played by the CMO, companies have not completely embraced the concept of a CMO.
Asia has an unprecedented opportunity to elevate marketing to the boardroom level, so that the CMO can take center-stage in shaping and executing the corporate strategy leading to better shareholder returns.
In spite of such an understanding, it is startling to note that the average tenure of a CMO is merely 23 months compared to a CFO that typical lasts 4-5 years on average. Further, not many companies have a senior marketing representative in their C-suite. This begs the question - do companies need a CMO or is the role of a CMO a mere hype?
As the business landscape evolves, marketing also evolves into an organization wide strategic discipline. Given marketer's knowledge of the customers, it is imperative that the CEO and the corporate board have a representative of the customer to continually educate them. Additionally, companies need a strategic CMO to benefit from:
Align marketing with the corporate business strategy
Newer technology, powerful channel partners, and empowered customers have made the competition highly intense and marketing a very involved and strategic discipline. Marketing can no longer be confined to the 4P framework. Marketers, with their in-depth knowledge about markets and customers, should act as a major resource for strategy formulation.
In all issues of corporate strategy - what markets to compete in, what segments to target, what entry mode and strategy to adopt, which partners to strategically ally with - marketing offers substantial information. In order to convey these holistic perspectives, it is imperative the marketing is represented by the CMO in the corporate boardroom who can speak to the directors and the CEO in their language.
A classic example is of the iPhone from Apple. Given the tremendously successful iPod and iMac, Apple could have become complacent. But the marketing acumen of the executives recognized the need to constantly excite the customers. Further, they built their growth strategies on satisfying the unmet needs of the customers. Marketing played a crucial role in guiding Apple's corporate strategy.
Connect the corporate boardroom with the customer
As Peter Drucker said, the only two functions of any organization are innovation and marketing. Irrespective how innovative a company is, how committed the employees are, and competent the top management is, unless the company connects with the customer, success will be elusive. The top management should constantly evaluate their strategic decision in the context of customer feedback - what do the customers' value and how can the customers help the company in co-creating value.
CMO plays a crucial role in constantly updating the boardroom and the CEO about latest customer preference, how well the corporate resources are aligned to meet hose evolving customer needs. Companies such as Levis Strauss, Sony, Toyota, Nike and Singapore Airlines are some of the pioneering companies that manage to constantly feel the pulse of their customers. As such, the marketing takes a central role in guiding the corporate strategy by having the top management team and the CEO regularly updated about customers and markets.
Create a customer centric organization
Given the innumerable choices that customers have, ensuring long term customer loyalty and sustainable competitive advantage becomes highly challenging. The difference between the successful companies that achieve those objectives and those who fail is the corporate orientation. Customer oriented companies design and operate every aspect of the company with the customer in mind.
To build a customer centric organization requires a highly concerted effort of all functions within a company along with every employee becoming a customer champion. These issues deal with organizational culture, organizational structure and corporate policies. The CMO can influence the boardroom and the CEO to implement measures that would allow to build a customer centric organization.
Banyan Tree Hotels and Resorts is a classic example that showcases such a customer centric philosophy. The founder has managed to instill a culture that allows constant interaction between marketing and other functions with the company. Such an emphasis has resulted in world class resorts that always manage to delight the customers.
It is evident that CMOs are strategic requirements of any corporate boardroom. But in spite of such a significant role played by the CMO, companies have not completely embraced the concept of a CMO.
Asia has an unprecedented opportunity to elevate marketing to the boardroom level, so that the CMO can take center-stage in shaping and executing the corporate strategy leading to better shareholder returns.
<< Home