Breaking through the growth bottleneck: the wisdom of cooperation between CEO and CMO

How can CEOs and CMOs break through growth bottlenecks and achieve excess growth? This article reveals the key strategies for cooperation between the two and solves the problem of disconnection between marketing and business growth. It is recommended for corporate managers and marketing professionals to read.

In an insight report released by McKinsey in October 2023, it was mentioned that CMOs need to work well with CEOs to drive business growth in a rapidly changing and highly competitive business environment. The difference between this report and previous articles is that it advises CEOs to have a deeper understanding of CMOs, refresh their concepts, strengthen trust, and actively use the power of brand marketing to achieve excess growth.

"CEOs who put marketing at the heart of their growth strategy are twice as likely as their peers to achieve annual growth of more than 5%. However, realizing the full potential of marketing is not as simple as the CEO saying "go for it". There are still many gaps to cross.

1. There are many gaps to bridge

1. Unclear CMO responsibilities

In recent years, many organizations have added new positions with marketing functions in the C-level (not necessarily CMO) such as Chief Digital Officer, Chief Customer Officer, Chief Growth Officer... Some companies have also assigned part of the ownership of the 4Ps to other functions, such as giving pricing responsibility to the finance department. Although this seems reasonable, it has led to a blurring of marketing's role and overlap with other customer-related responsibilities. CEOs are not always clear about who is responsible for what, and as a result, there is a high probability that strategy formulation is more dominated by finance and sales rather than from the perspective of customers/consumers.

To make matters more challenging, in some cases, marketing doesn’t even have a seat at the table (ELT), meaning the CMO can’t effectively align time and resources with the CEO’s long-term strategy .

2. Underestimating the potential of marketing to drive growth

Marketing is rapidly evolving into a multi-dimensional technical discipline, with increasingly diverse touchpoints (media) between consumers and businesses. Data is at the heart of every marketing campaign, and Martech is essential to marketing organizations. But even the most experienced marketers are overwhelmed by advances in tools and technology. And CEOs, lacking a marketing background, are unlikely to know much.

According to public data, only about 10% of Fortune 250 CEOs have marketing experience, and only 4% have held a CMO-like role. In contrast, more than 70% of Fortune 100 CEOs have an operations or finance background. Therefore, despite the rapid changes in marketing, CEOs still need CMOs as marketing experts to provide some guidance and explanations.

3. Marketing metrics are not sufficiently linked to business development goals

The world has changed with the development of data and technology, making measurement possible. But marketers are speaking a complex language and using a lot of data. But the CEO and CFO only focus on one question: "Why is this a good business decision?" That is, as we often say, the CEO focuses on business results, such as annual revenue growth and improved profit margins; while the CMO usually only reports on operational indicators, such as brand awareness and recognition.

Therefore, the CMO must prioritize the same metrics as the CEO to ensure they are working toward the same goals. Even worse than not understanding marketing metrics is that many other executives don’t trust the accuracy of the metrics marketing provides.

In this way, the CEO can neither track the impact of marketing on growth nor dare to let the CMO take charge of growth...

2. How do CEOs and CMOs collaborate?

There are two suggestions:

1. CEOs position marketing as a growth driver

Companies that prioritize marketing and branding as their top two growth levers are more likely to achieve growth. The data shows that B2C companies that prioritize marketing are three times more likely to achieve revenue growth of more than 5% than those that don’t. The story is similar for B2B companies, with companies that prioritize marketing more than twice as likely to achieve revenue growth of more than 5% than those that don’t.

To achieve the goal of growth , the CEO must clearly explain the role of the marketing function, build trust in marketing, and require quantification of marketing results to measure their importance to overall growth. In addition, the CEO must provide the resources and budget required to execute the growth strategy and give them authority and autonomy within a clearly defined scope. At the same time, invite the CMO to become a true C-level, that is, an ELT (core leadership) member. This allows them to provide opinions and suggestions on strategic planning, rather than just observation.

When a CEO appoints a CMO responsible for growth, it sends a strong signal to investors, customers, and strategic partners about the company’s strong commitment to growth.

2. CMOs should actively transform themselves into business growth partners

For B2B companies, the CMO may be someone like the Chief Revenue Officer, thinking about cooperation with functions such as product, sales, and operations, and driving business growth. For B2C companies, the CMO is usually best suited to become the CGO (Chief Growth Officer), as a sales driver, brand guardian, demand capturer, and ambassador of customer experience. In terms of execution, start with small things.

For example, CMOs can regularly send simple but rich articles about marketing strategies, data and analysis, and the latest innovations to their CEOs; they can arrange regular meetings with the CEO to discuss the implementation of business goals, marketing strategies, and performance indicator dashboards; they can take the CEO to important media, analyst, and customer events... Of course, what CMOs hope most is that their CEOs can adhere to long-termism, have confidence in, and have patience for the impact of branding and marketing. But this requires the CMO's own strategic thinking ability to keep up, and they must first actively learn and use advanced marketing methods, start quantitative marketing, and truly serve growth. Let's encourage each other.

Author: Hanni Source public account: Time Notebook (ID: 1089517)