Monday, July 9, 2007

"CMO's Don't Have Any Effect On A Company's Financial Performance"

Then It's Got To Be The CEO, CFO, COO, CIO, CTO

By David Miranda

An article on today titled "CMOs Rapped For Having Zero Impact On Sales", reported the following:

"A study to be published in the Journal of Marketing that covered 167 companies including Procter & Gamble, Microsoft and Apple over a five-year period concludes that CMOs on top management teams don't have any effect on a company's financial performance."

The study, "Chief Marketing Officers: A Study of their Presence in Firms' Top Management Teams," is slated for the January 2008 issue of the publication.

According the the AdAge article, "Among the companies studied, less than half, 40%, had CMOs in their top-management teams. As a comparison, 97.2% of the firms in the study had a CFO in that team."

On its release this study is destined to create considerable debate in the C-Suites of both large and small companies. It will reinforce the positions of those who believe that the marketing discipline is a necessary evil and make it more difficult for those who believe that marketing is the key driver of revenue, market share, and brand equity.

This author is frankly biased to the latter proposition. This position may be supported by in a soon-to-be-released study by Booz Allen Hamilton titled "CMO Thought Leaders: The Rise of the Strategic Marketer" based on 15 in-depth interviews with some of the marketing world's best-known CMOs. The main takeaway of the study is that measuring CMO performance based on financial performance alone is a mistake.

As I have evangelized many times - before someone buys anything, they have to want it first. That's what marketing does - getting consumers (and clients) to want your stuff more than your competitors. It is simply foolish not to have a competent CMO in the C-Suite if the CEO is not someone like a Steve Jobs, Bill Gates, Michael Dell, Richard Branson or someone else who understands the critical role of marketing in the short and long success of a company.

For the 60% of the companies in the CMO study who do not have a CMO in the C-Suite, wake up. In a world where preference is perishable and insurgent competitors are "at the gate", not having a CMO in the boardroom is like not having a doctor in the operating room.

Your critical patient (the company) won't be saved by analyzing charts and monitors.