Last month, McKinsey & Company published an article that discussed the evolving role of marketing - particularly the role of the CMO - in driving business growth. Marketing's moment is now: The C-suite partnership to deliver on growth was based in part on a 2019 study that included interviews with 60 C-level executives and quantitative surveys with another 200.
In the McKinsey study, 83% of global CEOs said that marketing can be a major driver of business growth. However, 23% of the CEOs do not believe that their marketing organization is delivering on the growth agenda. Other C-level executives are even more skeptical. For example, only half of the CFOs surveyed by McKinsey said that marketing delivers on the promise of driving growth.
The central theme of the article is that "a marketing organization's ability to drive growth depends heavily on the strength of the partnerships the CMO can forge across the organization."
Three CMO Archetypes
The authors of the article contend that CMOs fall into one of three categories.
Unifiers - Unifier CMOs are very good at developing cross-functional partnerships with other C-level executives. They speak the language of their C-suite peers and possess a results-oriented mindset. Unifier CMOs often play an important role in developing the company's strategy. McKinsey estimates that about 24% of CMOs are Unifiers.
Loners - Loner CMOs are often capable marketers, but they don't typically have close relationships with their C-suite peers. These CMOs usually focus on tactical marketing activities, and they aren't likely to be involved in designing the company's business strategy. McKinsey estimates that about 27% of CMOs are Loners.
Friends - According to McKinsey, about half (49%) of CMOs are Friends, and these CMOs fall somewhere between Unifiers and Loners. A Friend CMO may have a solid relationship with the CEO and may be responsible for driving growth through normal marketing channels and tactics, but they usually haven't extended their sphere of influence across the organization.
According to McKinsey's analysis, high-growth companies are seven times more likely to have a Unifier CMO than a Loner.
Where Unifier CMOs Excel
The McKinsey consultants wrote that Unifier CMOs excel in four areas that enable them to effectively drive growth:
- They ensure that the CEO fully understands how marketing is driving growth and contributing to the company's overall goals and objectives, and they leverage the CEO's support to extend marketing's influence over growth-related activities across the entire organization.
- They win support from the CFO by using metrics and analytics to quantitatively demonstrate how marketing impacts growth and business value.
- They work collaboratively with the CIO or CTO to leverage data to better understand customers, personalize interactions, and predict customer behavior.
- They work with the head of human resources to ensure that marketing can acquire, develop, and retain the human talent that is necessary to support marketing's growth responsibilities.
The McKinsey article embodies a theme that I've seen discussed with increasing frequency over the past couple of years. A growing number of marketers and other business leaders are recognizing that no one department or business function can single-handedly deliver great end-to-end customer experiences or drive maximum business growth.
Both great end-to-end customer experiences and maximum growth require the efforts of multiple business functions across the organization that are aligned around a common business strategy and are working in a collaborative and coordinated way. McKinsey says that the CMO should be primarily responsible for driving business growth, and this view has also been advanced by Deloitte and Forrester.
But there are alternative approaches to managing growth. Over the past few years, many companies (mostly B2C firms) have appointed chief growth officers to lead and coordinate growth efforts. In 2017, Culture App, an employee engagement and analytics software firm, reported that 455 U.S. companies have chief growth officers. That number is almost certainly higher now.
Meanwhile, many B2B companies - particularly technology start-ups and those operating in the SaaS software space - have been appointing chief revenue officers who are tasked with managing the company's revenue-related business functions including marketing, sales/business development, direct outside sales, channel management, and customer success/ customer support.
I suspect that we will continue to see all of these approaches used as CEOs try to identify the best way to drive and manage growth.
Image courtesy of ccpixs.com (Creative Commons License).