Editor’s Note: A version of this article on the changing role of the chief marketing officer originally appeared in MyCustomer.
In today’s connected world, it’s no longer enough simply to measure a company’s success by its operational efficiency. Relationships are the new currency; customers have all the power. More and more, a business’ success depends on understanding and engaging the customer. The majority of S&P 500 companies are service-based businesses – companies that rely heavily on their customer relationships, like Lyft and Airbnb. They reflect a growing need for relationship-driven chief executives – people like CMOs, who are truly the natural choice for tomorrow’s chief executives.
Evolving customer behavior has required chief marketing officers to understand the customer lifecycle inside and out to better leverage data in their care to enhance the bottom line and drive measurable results. They’re more influential in the enterprise than ever before: handling not just brand awareness and lead generation, but customer retention and loyalty as well. Not only do they “get” the brand, but also they tend to have useful communication skills required to lead the brand.
Changing Role for the CMO
As the Marketing Society reported, traditionally, chief executives of FTSE 100 firms have historically been chief financial officers rather than chief marketing officers, but that is starting to change. At private-equity backed firms, 24% of chief executives come from a marketing background, while 19% are from finance. A study at the University of Notre Dame looked at 155 US companies listed and found the firms with a CMO in the chief executive’s chair outperformed the rest by 15%.
Marketers are starting to fill the top jobs across all types of sectors, with big businesses from Royal Dutch Shell to Mercedes Benz appointing ex-marketers as their new chief executives. A few years ago, these leaders might have been boxed into marketing-specific tasks such as increasing brand awareness and demand generation, as well as marketing products and solutions. Now, CMOs are likely to be involved in other parts of a business as well, including sales, customer success, corporate strategy and IT.
According to Forrester Research, 40% of B2B marketers and 41% of B2C marketers saw themselves as working toward CEO roles. A similar survey just three years before showed quite the opposite: most marketing executives wanted to become consultants or move to bigger companies, and that was the extent of their ambitions.
Another piece of research showed CEOs may have operated in the past on top floors in silos, whom shareholders and employees may have only heard from occasionally. But the rapidly changing and increasingly transparent world of communications means that walls are being broken down and quite literally in some cases. Just look at T-Mobile CEO John Legere’s Twitter presence to see that tomorrow’s CEO needs to be as much marketer as number cruncher.
Chief Marketing Officer Today; CEO Tomorrow
All of this signals a transition from the model of the ‘isolated CEO’ to the ‘highly visible CEO’ who is expected to participate in live Q&A sessions with employees or the public and to have public profiles on social media channels, all of which suits a marketers experience and skill set.
This isn’t to say that CMOs will walk into top positions in companies – chief marketing officers still have to convince corporate boards of their cross-organizational skills, financial acumen, and management experience in order to be considered for the coveted role of CEO. However, while most CMOs may not have managed sales, they have overseen large teams and big budgets, and have balanced the art and science of data-driven marketing in a time when data is absolutely pivotal to a company.