Fixing The Marketing-CEO Disconnect

HBS Working Knowledge interviewed Harvard Business School professor Gail McGovern about fixing the disconnect between marketing and the CEO. Here are a few of the key points that stuck out for me and my responses.

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McGovern: “Over the past 10 years the mix of marketing skills needed by a company has radically changed, and many senior executives…have not kept pace.”

My take: This skill deficiency is a two-way street. For sure, non-marketing execs have lost touch with many areas of marketing expertise (but are experts in branding, of course). But on the other hand, few CMOs have developed the fourth skill crucial for CMO success.

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McGovern: “While CEOs have commonly delegated advertising and advertising strategy to outside agencies, now they are delegating sales, distribution strategy, pricing, and product development to CMOs, who often lack overarching strategic responsibility.”

My take: In which firms has the CEO delegated responsibility for sales, distribution strategy, and/or product development to the CMO? The problem is very much the opposite: The CMO should be involved with (not necessarily controlling) these functions, but isn’t. Part of the issue here relates back to the point regarding skills. Many CMOs — overly focused on branding — haven’t developed the skills required to participate in, let alone be responsible for, functions like distribution strategy and product development.
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McGovern: “[B]oards, and even CEOs, have been lulled into complacency by the CMO.”

My take: This comment came in response to a question about why marketing has evolved so far from the executive suite over the years. But it’s hard to believe that this could be happening in that many companies to make this a valid statement. The issue lies with a firm’s culture. Sales- and finance-driven cultures tend to marginalize marketing, or at the least, diminish its strategic importance in the firm. But it’s not the CMO lulling the exec suite into complacency.
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McGovern: “…[T]he yawning gap between actual revenue growth and investors’ expectations is a ticking time bomb. Marketing is the way in which firms can close this gap because it encompasses all the activities of n organization that listen to the customers’ voice and ultimately generates profitable relationships.”

My take: Marketing does not “encompass all the activities…that listen to the customer.” The voice of the customer is captured in areas like sales and customer service. The problem is that it isn’t always shared beyond those departments. [And if that weren’t bad enough, within marketing, the function that captures the voice of the customer (or tries to) — market research — isn’t well integrated with other areas of marketing.] McGovern’s statement is overly simplistic, it’s symptomatic of the biggest problem CMOs already have — accountability without responsibility.
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McGovern: “The key challenge [in aligning marketing activities with corporate strategy] is to develop a set of metrics that measure the impact of marketing activities against the goals of the corporation.”

My take: Metrics are great — as a tool to manage marketing’s operations, and to communicate its contributions and impact. But they’re a risky way to achieve alignment. McGovern hints at this herself, with her example of Starbucks picking the wrong metric to link back to corporate strategy. How much time elapsed and pain did they experience before they figured that out? At the recent DMA Financial Services conference, Martha Rogers commented that it takes eight quarters to get Return On Customer (TM Peppers & Rogers) calculations right. That’s a long time to not know if you’re in alignment or not. The right metrics are critical for staying on track — but they’re not the way to figure out which track to be on.

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Overall, I’m somewhat surprised by Ms. McGovern’s comments. Her executive credentials are impeccable. I’m left believing that this interview didn’t quite capture her real-world experience and perspective.

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