The CMO's dilemma

International Institute for Management Development’s latest study establishes how the scope of work for a chief marketing officer has diminished at an alarming rate. Their contribution to two of the 4Ps of marketing — namely, product and pricing — has been going down steadily, says the study. This is because product and pricing are now the purview of the chief innovation officer and the chief financial officer. In this scenario, how can the CMO continue to be relevant to his company?

Make risky investments

A LOT of questions have been raised in recent years on the relevance of various C-suite roles leading to their fragmentation, and the corresponding emergence of newer (and often fancier) titles. All of this stems from the frenetic pace of change in the business environment we are witnessing and the resulting pressure it imposes on businesses to adapt, evolve or even reinvent. Whether it is technologies or products, brands or even relationships - all are vulnerable to the forces of these disruptive changes. The role of a CMO is no different.

Look at what a typical CMO is up against: an increasingly demanding customer, shorter product life cycles, heightened consumer activism on social networks, fragmentation of media and so on. On the upside, there is a whole new world of possibilities of micro targeting customers, a surge in the quantum of data available, and the possibility of pricing dynamically. Business leaders, by whatever title they are referred to, who can navigate their organisations through this complex environment and demonstrate growth are the ones who will thrive.

So, what does the new CMO need to do?

First, of course, is to adopt the inevitability of new technology and big data for better customer understanding. Such an approach demonstrates accountability within the organisation and buys the freedom to make more risky investments.

The second is, in some ways, complementary to the first. The CMO is ultimately responsible for generating growth for the organisation. That often makes them sales-oriented. And this can be the death knell for the organisation. Incremental short-term measures used to generate sales in the short run soon dry up.

Marketing has indeed been taken over by extremely analytical processes. However, it is as much a creative process as it is an analytical one. Creative interpretation of data often gives voice to what customers want but are not telling us. Such insights pave the way to breakthrough innovation. It is important, therefore, that marketers continue to make bold guesses about their customers and evaluate them meticulously.

Finally, new age CMOs must lead the way towards becoming truly social organisations. The rise of social media is making organisations a lot more accountable. Forging deep relationships with customers necessitates co-opting them into the value creation process. This will require breaking away from a control mindset. More importantly, the new CMO must work with the internal organisation in being consistent across the value chain and delivering a consistent brand experience right down to the last mile.

Sriram Gopalakrishnan
Director, marketing & communications, ISB, & editor, ISBInsight

Break out of the silo mentality

The lines between the roles and responsibilities of different functions in a company are getting blurred today. It is not just about the chief financial officer (CFO) getting involved with the product and pricing decision. It is as much about the chief marketing officer (CMO) not being restricted to a focus on communication and the consumer.

With regard to the CMO-CFO dynamic, I feel the greatest change one sees is that these two roles do not operate in silos anymore. Both the CMO and the CFO are entrusted with the duty of looking at the overall functioning and performance of a company.

That said, there is a fundamental shift today in the brand manager's role, which gets extended to the category heads and finally the overall marketing team. The marketing team no longer has the luxury of thinking about or focusing solely on the consumer. It has to be just as aware about the backend logistics, costs involved, the different elements of freight and so on. In a scenario where resources are constrained and everyone wants more bang for their buck, it is important to know all these aspects of the business.

The CMO's role has expanded to identifying new trends, new categories and even getting involved and working with research and development. To do this, one needs tools and technologies to analyse data and interpret it for results. Such investments cannot always be looked at through the prism of quantifiable deliverables. One must remember that the CMO is technically the only person who is dealing with multiple variables, the most important of which is the ever-changing, ever-evolving consumer. In doing so, he will fail a lot as well as succeed. One can't tell how he would find that one insight among millions that will alter the way business is conducted forever.

In all this, the cost aspect does creep into the conversation. The counter argument to such investments is when the culled out data is not utilised. The CFO would question such investments. But it is precisely in such instances that a better cross-understanding of roles happen.

Marketing as a function encourages one to think independently. Sales would choose a more straight-jacketed approach instead to get the job done. There is a lot of scope for collaboration between the two functions, even an overlap at times, like in the case of shop-floor branding or below the line activations. But independently they continue to have a sharp focus.

Nikhil Sharma
director, marketing, Perfetti Van Melle India

Focus on the bottomline

The chief marketing officer (CMO) has an identity crisis. Going by the traditional definition, a CMO is supposed to impact revenue by creating desired consumer engagement. Instead, now the CMO should take a fresh look at the relevance of the marketing function to his organisation's business model. In an organisation, while the sales team is always talking about revenue, the chief financial officer is concerned with controlling costs.

The list of challenges faced by the CMO today is comprehensive; let us analyse some of them. In the IT services industry where value creation is a result of a bunch of capabilities, the scope of work for a CMO may not change radically year-on-year. On the other hand, at a large product manufacturing company, he may not have a lot to do. The company may not churn out new products regularly, leaving the CMO without any task at hand.

Then there are issues with the way MNCs across categories of products and services operate in emerging markets where the local teams, especially the CMOs, are often short changed while making decisions. We are living in the age of unbundled operations with more companies outsourcing various functions to supply chain management companies and other agencies. Eventually this will impact how a company faces its consumers. The modern CEO comes with a marketing brain and aligning goals with him could be one of the survival strategies for the CMO.

First, the CMO must understand that marketing is a large discipline and it is time to get rid of the annoying habit of reporting drab marketing speak, for instance, feeding the CEO with ROI details on the success of media plans.

The CEO-CMO discussions should be on topics like incremental revenue streams, profitable segments, higher margins, return on capital, and quality of market share. With myriad channels interacting with customers, marketing organisations need a technology partner who can create a real-time interaction engine that offers a unique view of data that tracks the customer lifecycle at zero moments.

Krishnan Chatterjee
Senior VP & head of strategic marketing, HCL Technologies