Changing the conversation

Rising in the ranks of the boardroom hierarchy is becoming a reality for CMOs who show business leadership and understand how empowered consumers can influence their business in a digital age.

The chief marketing officer (CMO) has historically been one step down from the top tier of corporate governance, with less strategic influence than other executive functions such as finance and operations.

“The CMO has always seemed to be at the big table, but not when the doors get closed for the inner circle of chief executive, chief financial officer and chief operating officer to have a private conversation,” says head of CMO research at Forrester Research David Cooperstein.

“However, I think that is starting to change because those three leaders represent the shareholders, the employees and the customers in terms of operations, but they don’t typically represent what is happening in the marketplace.”

As the conversation with the customer becomes more complicated thanks to the digital and mobile nature of communications, it has brought to a more senior level the issues marketers have been debating in their own departments for years. Cooperstein says CMOs that force their way into the boardroom do so “because we are living in ‘the age of the customer’, a time when empowered consumers using social media can have tremendous influence”.

Today, CMOs face responsibilities and expectations that are different from those of the past. As a result they need to rise to new challenges. The brand is always going to be an important part of the role, but driving the business and being an expert in digital channels are now mandatory for CMOs seeking to elbow their way in between the triumvirate of chief executive (CEO), chief financial officer (CFO) and chief operating officer (COO).

As with companies across all categories, the biggest issue bathroom fixtures brand Ideal Standard is grappling with is how to expand in the face of unprecedented market downturns. Marketing has been leading the development of new sales channels to unlock growth in market share and create a more consumer-led company. This has included radically overhauling its product portfolio to bring creative flair back to its designs.

Ideal Standard CMO Kerris Bright says: “In my experience, marketing is at its most effective when it’s also endeavouring to find ways to bring the brand’s future and purpose alive within the organisation, so colleagues feel inspired to be part of that future and drive for growth. “Marketing is the function that should look to the future, create vision and purpose for an organisation, define new sources of growth and identify creative, meaningful and profitable ways to connect with customers.”

Marketing is perhaps unique in that it is more future-focused and externally oriented than other executive functions, and has the opportunity to be the synthesiser of external opportunity with internal capability. The CMO is not behind other C-level functions in the pecking order of an enlightened company, argues Bright. “A board is a team. All the functions have a critical role to play in steering the company and they need to be in balance,” she says. “Ultimately, your influence as a marketing leader is as strong as you are effective – you have to deliver.”

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Disney’s CMO has a key role in sharing consumer insights within the group. Motorola Solutions (bottom right) has combined its IT and marketing roles

This is a view echoed by many marketers trying to raise the standard of performance across the marketing function and be recognised, with appropriate clout, in the boardroom. “What is arguably crucial to the entire executive team being successful, whether you are the CMO, the CTO, the CFO or any one of the Cs, is getting aligned across the organisation,” says Yvonne Chien, former senior vice-president of marketing at Getty Images. “For a CMO to be successful, you have to be able to think strategically about customers, brand, product, design and experience, and appreciate what that means for financing or technology; as well as what you are going to need from the other functions and how you can influence across those tiers to make it work.”

One obstacle senior marketers often face is that company leaders have set views of what marketing comprises, whether it is direct mail, advertising or branded events.

Those attitudes might not be changing, but there is a shift in the types of conversations that and are now reaching the boardroom, which marketers have long had among themselves. For example, balancing customer data with privacy, or the impact of how people engage with companies in a real-time way. Executives from different backgrounds are trying to understand what is driving the consumer.

“We have an opportunity to show how marketing can make a difference,” says Philippa Snare, who as CMO of Microsoft UK leads the consumer and commercial marketing teams. “I think now is the time for marketers to step up and share the kind of conversations and challenges they have been struggling with for years.”

She senses an openness to this argument at board level and shifts in the pecking order. She is increasingly called into the boardroom to present what marketing is and is not doing; what is and is not possible.

She is also asked to help educate others on issues such as what social media measurements mean, and how marketing should and should not be held accountable. Crucially, there is a link between this perceived rise in importance and the fact that as CMO she now has more data than before on activities that marketing has previously struggled to quantify.

“People who complained that they don’t have a strong voice in the boardroom now have many people asking for their contribution,” explains Snare. “Before it was just ‘go and do the colouring in’ and now it is ‘we believe in marketing too: you have to tell us what you can do’.”

For entertainment brand Disney, the marketing function has a key role in terms of sharing consumer insights and representing the voice of consumers within the group, which gives UK and Ireland CMO Anna Hill confidence.

IdealStandard-2013-460
Ideal Standard the CMO is critical to its future growth

“Rather than challenging to get more power in the boardroom, the main opportunity is to focus on collaboration with other members of the team,” says Hill.

“Our UK management team has a genuine partnership approach, which makes for a productive and successful working environment.”

The growing importance of the voice of the customer within the business is crucial in CMOs using their power at the very top of the organisation. No one else within the board can feed back customers’ views alongside collecting multiple research insights, interpreting them and highlighting what is important to serving their needs.

Disney’s marketing team talks to thousands of families in the UK every year and values having a constant dialogue with consumers, which it sees as being critical to the success of the business as a whole. Working with the board to interpret the findings and maximise the effects across different business areas is essential, says Hill.

“From a skill set perspective, having a mix of commerciality and creativity to solve business issues is key, as is an appreciation of the evolving media landscape and the challenges of reaching our audience via traditional methods,” says Hill.

“The thread that ties the role together is a laser focus on the customer, a real understanding of their behaviour and an ability to anticipate and meet their demands or spot the next big thing.”

Crucially, to be successful at the top of the company, the CMO role has to be one of business leadership and not just marketing management. The CMOs who understand that their job is beyond the domain of just running the marketing department really well are the ones that will do better with these new expectations.

Dee Dutta, former CMO of Visa and Sony Ericsson, says a new status for CMOs is ripe for the picking. The personal effectiveness that is key to this new positioning is closely tied to a range of skills, he argues. Competencies such as understanding and being the champion of the customer in the organisation, being able to handle the cost base and living with mistakes as much as successes are all markers of ability at this level.

“At the end of the day, the CFO, CTO, CMO and CEO are the core engine drivers of the business and it is very much teamwork,” says Dutta. “If the CMO is effective, there is nothing that stops her or him moving right up the organisation and being a de facto assistant to the CEO.”Or, indeed, even becoming the CEO.

Q&A

London-City-Airport-2013-460

Declan Collier
Chief executive
London City Airport

Marketing Week (MW): What importance do you place on the marketing function within your organisation?

Declan Collier (DC): Marketing is a fundamental part of what we do. Understanding and knowing your customer is critical and that is the role that our marketing team takes on. They are the ones that are custodians and guardians of our customer data and information. They tell us what our customers like to do, don’t like to do and so forth. That feeds through to our business plans and is fundamental for decisions such as our investment in new technology.

MW: Who on the board is the voice of the customer?

DC: Our chief commercial officer (CCO) Matthew Hall fulfils that role – he is the top-level marketer on our board. His background is marketing and it is a fundamental part, not just of the board, but also the C-suite. Our structure within London City Airport is CEO, CFO, COO and CCO, and that’s it.

MW: How do you organise the board hierarchy?

DC: We don’t have a pecking order on the board or in the executive team. We are absolutely flat and equal and we all have a specific skill. The marketing side is as important as operations and finance.

A very important part of what we do is being flexible and getting information to and from the people it needs to go to. Our marketing team has a big say in how we develop our business and how that proposition works. Fundamental to our business is our 2015 proposition – an initiative that will see passenger numbers boosted to 3.5 million by 2015 – and knowing how that is relevant to our customers. We have a marketing group that handles that, does research, feedback, loyalty programmes and so forth and reports directly to the CCO.

MW: What is the expertise of the top-level CCO marketer that has got him to board level?

DC: Nobody gets to C-level with a narrow skill set. He has broad skills within the commercial area but he has also worked in the airline business, in related airline services businesses and now the airports business. His work has involved developing and delivering marketing programmes and linking those to the development of strategies and so forth. He is in that role because of the strength of his marketing expertise and he built that marketing team and that system from scratch.

Marketing Week spoke to Declan Collier at Forrester’s Forum for Customer Experience Professionals EMEA, hosted in London in November 2013

Case study

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Motorola Solutions

As lead marketer of business technology company Motorola Solutions, Eduardo Conrado delves deep into the world of barcode scanners and two-way radios. Initially appointed as CMO, Conrado is now senior vice-president of marketing and IT.

The company is one of the first Fortune 500 companies to combine the functions of marketing and IT. Marketing and all of its traditional responsibilities, including product marketing, brand, website and internal and external communications fall under his remit, as does the internal technology systems.

Motorola has one department that oversees digital platforms and strategies for the company. According to Conrado, this represents a new era for marketing and where IT should be going in the future. He also predicts the concept of the ‘marketing technologist’ will be seen more in future CMOs. “A lot of things that we do are technology dependent and when you are thinking about customer engagement and customer interactions a lot of them will take place on the digital front,” he says.

“That means not just the sites that they touch but how you personalise them, how you use data within or outside the company to provide the customer with the best experience as well as making decisions inside the organisation.”

Conrado has an engineering background and has also worked in many of the business units and customer segments in the company, which has enabled him to obtain a rounded view of the customer, he says. He is able to weave his knowledge into looking at the strategy of the company and the trends in the market and tying them into execution plans.

David Cooperstein, head of CMO research at Forrester Research, says Conrado is an example of a new kind of CMO. “The definition of who wants the CMO role is changing,” he argues. “It may be the most senior position in marketing but the people who lead it will not necessarily be those who solely did marketing – if they did, they are probably not strategic enough to take on the role.”

Motorola’s executive committee, which reports to the CEO, demonstrates the company’s focus on small, efficient teams.

It incorporates heads of sales and product operations, legal, HR, finance, marketing and IT, and strategy. Conrado says each position holds equal weight in that structure. He believes his power in the boardroom is tied to being a collaborator and strategic thinker and being able to take a broad view of the business versus the functional view. “Marketing can be strategic beyond traditional communication- or campaign-driven marketing,” he says, “and influence the direction that the company is taking.”

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