Inside the Head of a CMO
Given the data from recent research about Chief Marketing Officers, David has four things creative agencies should keep in mind during sales and work interactions with them.
Links
“Inside the Head of a CMO” by David C. Baker for punctuation.com
The Boathouse Fifth Annual CEO Study
Confessions of a CMO: A Field Guide to How CMOs Are Evolving to Thrive Under Corporate Pressure
Transcript
Blair Enns: David, our topic today is Inside the Head of a Current CMO. I've read the piece and I've read the surveys that you referenced, but tell the audience, what was the impetus for this topic?
David C. Baker: I wanted to get inside the heads of deeply depressed people. [chuckles] I thought, who better than CMOs these days? No. You don't see too many studies that come out that really, I guess, challenge your thinking. In this case, it was not just one, but two that came out pretty close to each other. One was the Boathouse Annual Survey of CEOs, and included in that were some questions about what they thought of CMOs.
The other side of it was called Confessions of a CMO, where 30 CMOs were asked to provide anonymous feedback on their relationship with the company that they work for, under Chatham House rules where you can't say anything that would reveal specific names or anything like that. It was just fascinating to put those two together and, I guess, to see the mismatch between them.
Not just the mismatch in terms of how one group thought, the other group thought of them, and vice versa, but also the movement and perception in such a short period of time, over one year. That's what got me to thinking. It really challenged me to think differently about how we, as running agencies, might think differently about how we do it, because of that unique environment in the CMO world these days.
Blair: Now, to clarify for our non-agency and non-marketing audience, a CMO is a chief marketing officer. There are probably other CMOs. There are all kinds of CXOs now. One of the things you were referencing there is this change in attitude from year to year. That specifically is the Boathouse survey on how CEOs perceive their CMOs. Do you want to speak a little bit on how, in the span of just a year, CMOs have changed in the eyes of their bosses, this chief executive officer?
David: Yes. CEOs, just a year ago, would think of CMOs like the whole marketing department that they were running, they would think of the marketing department as a profit center. Two-thirds of CEOs would think that. In other words, any money that you allocate to the marketing operations would be more than earned back. It would be an investment in the company. Now, that has dropped, in just one year, from 65%, so two-thirds, down to 40%.
The bulk of CEOs now think of the marketing department as a cost center. In other words, it's just something you have to do. It's not a direct ROI. It's sort of like employee benefits. You need to do it, otherwise you'll lose employees. It's not a core function of the company that gives you a return on investment. It's not. That's really sad when you think about marketing. [chuckles]
I'm not even in marketing. I advise marketing firms, but if I were a CMO and my CEO thought that of me, I would be acting very differently, which turns out to be the case.
Blair: I think it was Peter Drucker who said there are only two functions in business, innovation and marketing. Does that ring a bell?
David: I know Drucker, but I don't know what he said.
Blair: Yes. Essentially, coming up with new products and services for your client and then marketing them to the client. The idea that in the space of a year, CEOs would go from seeing the marketing function as a profit center generally, and I think you said 65% of them saw it as a profit center a year ago, to a cost center. Today, is it 40% or 45%?
David: Yes.
Blair: The numbers have basically flipped. Only 40% or 45% see it as a profit center. The rest see it as a cost center. In a year. is that a statement about the CEOs? Is that a statement about marketing in general? Is it a comment on the economy or something else going on? What do you think?
David: I think this has to be muddled. There has to be something in here about the economy too. If you just picture what people would have said if the economy was strong and sentiment was strong, which it's not in the world right now, you would think that they would have given more credit to CMOs. When sales are down, they're looking for places to blame. This is part of it, right?
I don't think it's quite as bad as this indicates. It's got to be influenced by the larger economy, but it's not good news. There isn't any way to spin this as good news.
Blair: Let's talk about the letter grades that CEOs are giving to their CMOs. That's changed too. What are those numbers? Same shift?
David: Yes. Still, in the same year, 24%, so a fourth of CMOs would have gotten an A grade from their CEO, so the highest grade. In one year, that 24% went down to 15% got an A. Sounds a little bit like university before grade inflation. [chuckles] Whether they deliver ROI, 13%, where the CEO has said, "Hey, does your CMO deliver ROI?" In 13% of the cases, "Yes," that's what the CEO said. The rest of the time, "No." That's really staggering. It just sets up this big question.
If that's the perception of the CMO, that is frequently your contact-- Sometimes you have a contact higher, sometimes you have contacts lower, but let's just use that as a proxy. If that CMO's relationship with their job is that way, how does that change the way you would work with them? How would you think about how you would present your ideas, the relationship you would have, how invisible or visible would you be? Would you go over their head sometimes? It just gets you to really thinking about what might change.
Blair: Yes, that's the crux of your post, really, is that one year later, your client is a different person. It may be the same person, but you're effectively selling to and working with a person in a different set of circumstances, who is more worried about their job, who has less influence with their boss and the other members of the C-suite.
David: Yes. They're not going to waste personal capital on some mistake you brought to the table, some campaign that didn't work, or something like that. I don't think this has influence. Now, this is just anecdotal on my part. I don't think it's influenced how CMOs frequently will take you with them to their next job. I think if you've established a good rapport and you've made this CMO look successful because of the work you've done.
I think that transference, where you follow them to their next job, is happening just as much as it did before, maybe even more. I don't know. That's just my sense. With the current relationship, it seems like you could wreck your relationship with the CMO a lot easier than you could before. They're not going to step in and save you because they're looking for scapegoats more than they were in the past.
If you do something bad, they're going to say, "Well, yes, I need to fire them. I need to bring another firm in. That was bad. That's my bad for hiring them, but I can fix that." Yes, staggering.
Blair: The CMO has gone from last year, and again, we're generalizing here, but last year, it's like, "Yes, I'm willing to take risks, I'm the man, or the woman. I've got influence. I'm willing to stand up in front of everybody and make bold recommendations." Today, they're just trying to keep their head down.
David: Yes.
Blair: That's it in a nutshell. Isn't it? I think some of the best quotes in your piece here come from the Confessions of a CMO study. Can I just read a couple of them and we'll talk about them?
David: Yes.
Blair: Every quote here resonated with me as somebody who teaches selling, where I was yelling, "Yes, yes." Even each of your four recommendations, when we get to them, I thought all of them aligned perfectly with how I think about selling. I'm just giggling here because this is just a great mechanism to talk about some of my favorite subjects. These quotes are from CMOs talking to other CMOs about what they're experiencing, knowing that they're not going to be named, so we're going to name these people.
David: [laughs] Yes.
Blair: No, just kidding. We don't have their names. Here's a quote. "I've always had to come in sideways because the minute you say brand, people's eyes glaze over, so I start with culture." What was your reaction when you read that?
David: Well, that's what I was saying 15 years ago when you all started talking about brand, and I'm saying, "Stop it."
Blair: Brand, brand, brand. Oh my God. [laughs]
David: Then storytelling. Yes. It's just one thing after another.
Blair: I've coined some insults over the years that I'm too mature now to be able to throw this.
David: Oh, really? Did you go to some summit last week or something? [laughs]
Blair: Okay, here's one. "I know you're lying because you've got a PowerPoint deck and you just said the word brand." [laughs]
David: [laughs] Is that the first time you've said that publicly?
Blair: No, no, but it's been a few years.
David: Okay, so it feels good to get that off your chest.
Blair: The worst one, I would say. "I've always had to come in sideways because the minute you say brand, people's eyes glaze over." Haven't they always glazed over, or is that just you and me? We're just so immersed in this. This is a different rabbit hole we could go down. I've always been down. dismissive of agency owners talking about their brand because, to me, that was code for, "I'm ignoring the difficult decisions about what business I should be in and how can I be meaningfully different, and I'm focusing on the soft stuff, brand, the color palette, the use of space."
Obviously, you can hear from the tone of my voice--
David: We just lost 2,000 listeners. [laughs]
Blair: I know. It's just you and me, the two old guys from The Muppets talking to each other. Nobody left. Anyway. I understand when CMOs are experiencing this, you start talking about brand and people's eyes glaze over. There are better words. Culture is a better word. Reputation is a better word. Status in the eyes of our customers and prospective customers, that's a better phrase than brand. I loved reading this comment.
David: I'm just letting you hang yourself here. My feeling is, and I think this is all subconscious on the part of the brand pushers, is that brand is under the umbrella of unaccountable spend. It's like whatever you do for a company from a branding standpoint, it is the most difficult-to-measure thing you do. I think we take solace in that rather than getting down deep in the trenches and saying, "Hey, are we moving the business needle?"
I'm not saying brand isn't important. I'm saying that a lot of other things need to be built on top of good branding. We stay away from those other things because they're too measurable.
Blair: I think that's a great way to articulate it. I should point out that the very best brands out there, they do talk about brand. They do so in a meaningful way. They are all in on their brand. I think most of the blowback you're getting is from organizations that-- they've built a good business, but not a good brand. It just doesn't make sense in the eyes of the people at the table to keep spending all this time on brand when we're trying to push a needle.
I understand the counter-argument to that. I know how I would argue against this, brand is always important, et cetera. I am, as I've already confessed, a little bit biased from people talking about brand when they should have been talking about more meaningful things. I suspect that this CMO probably was not working at a company that we would recognize as a big brand and was running into that kind of thinking, rightly or wrongly.
David: It could also be somebody who worked on the external side, went to the client side, is now the CMO, and is talking about brand all the time, like they did when they ran an agency. [chuckles]
Blair: Yes. The next quote, "I call everything a pilot. When it's all a test, debate ends and data decides. One didn't even ask the CEO's opinion on a rebrand element, just put the logos on the wall and waited." I love that idea of the marketing person talking about every marketing campaign as a pilot. I wrote a post on this recently, I don't remember if we did an episode on it or not.
I think we did, it was the Rory Sutherland one, where one of my takeaways from his body of work is that marketing success is fat-tailed. Basically, the odd marketing experiment will account for an outrageous percentage of your overall success. Therefore, you should see marketing as an experiment. Therefore, you should go into all of these things as a pilot. I thought that was a really astute approach by this person.
David: The other thing I like about the pilot is you're just saying, "Listen, it's an experiment, we don't have enough information to know if this is going to work" so that you're not staking your reputation to something working. I really like that thought too. As long as you kill the pilot quickly, if it's obvious it's not working.
Blair: Yes. Managing people's expectations around this as a pilot, I think that's a great way to think about it. Last quote here and then we'll move on to your recommendations of what the listener should do in light of the new environment for CMOs. Here's the quote. "I was successful if everyone believed the idea was theirs. The outcome felt inevitable and nobody recalls exactly what role I played." I think that is a really astute observation of a CMO.
You don't want your CMO-- I'm putting myself in the CEO's shoes. I think that's what I would want my CMO to do, is to bring ideas to the table, different ideas, to talk about the pros and cons. It's almost like a three-option proposal in my world, where you're not going in with a strong recommendation, you're going in with an idea of the place we want to get to, and the different paths that we could take to get there.
You put those different paths on the table for discussion and one of the things that discussion does, it lets people get invested in the decision, so when the decision is made, they are part of that decision rather than a yes/no. If you ask me to make a yes/no decision on your idea, then it's your idea and you get the credit. If you ask me to participate in a broader discussion about different ways that we can do this, and I, in concert with you and others, we come to a consensus on one direction, we are now all invested in that decision.
I think it's a brilliant quote.
David: Yes. It also brings up the point to me about how important it is for you to understand the different personality types of the people you work with. I don't mean with necessarily personality theory, but just understand people and what motivates them, what embarrasses them. Then you introduce your ideas differently, based on the kind of person that you're talking to at that point.
I almost interrupted you earlier, but this is a good time to do it and say that when we hear the word selling, I think we just default to the idea of what happens in those early conversations when somebody is turning from a prospect to a client. I think it's a mistake because selling starts then, but it never stops. You're still selling your ideas. There's so many good principles that you don't just use to bring new clients in, you use them in the relationship too.
You ought to write a book about when the selling doesn't stop, or something. You know what I mean?
Blair: When the selling doesn't stop.
David: This is just another example of how our entire relationship, like you were saying, the outcome felt inevitable. Nobody recalls exactly what role I played. All of your big ideas, I have introduced those to you. I just want everybody to know that. [laughs]
Blair: [laughs] This is a great segue to your Why This Matters to You section in this post, where you list four or five-- I think it's four different things. What's the first thing that you should think about when you're onboarding this information about the changing role of the CMO? What do you have here in writing, David?
David: First, the big reveal is dead.
Blair: Okay, stop right there. I'm going to read for you, from The Win Without Pitching Manifesto.
David: Oh, no.
Blair: The second proclamation, we will replace presentations with conversations. We will break free of our addiction to the big reveal.
David: You're saying this comes from you? [laughs]
Blair: Did you hear that? We will break free of our addiction to the big reveal and the adrenaline rush that comes from putting ourselves in the win or lose situation of the presentation. When we pitch, we are in part satisfying our craving for this adrenaline rush. We understand that until we break ourselves of this addiction, we will never be free of the pitch. Presentation, like pitch, is a word that we will leave behind as we seek conversation and collaboration in their place.
I'm sorry, what were you saying [chuckles] about the source of all--?
David: Nobody's listening to a 15-year-old book.
[laughter]
David: Okay, point taken. Your Honor, I take that comment back.
Blair: I retract the question.
David: Yes. What I meant by that was that you want to co-build with somebody, but when you do the big reveal, then you go off and you do your thing, and then you come back with it, there isn't all that middle ground of building something together, where the CMO may even forget that it was your idea in the beginning.
Blair: What a novel idea. [laughs]
David: Yes, I agree. I came up with it 16 years ago, as I recall. [laughs]
Blair: Yes, okay, all fun aside, you're right. This idea, the big reveal is all about you, and you go in and you're going to be the star. Meanwhile, there's this trepidation and uncertainty on the side of the client. If you get it wrong, they're thinking, "Oh, I never should have fucking hired you. Oh my God, do you know what kind of shit I'm in? Do you know what I'm dealing with over here?"
You're standing up there going, "Ta-da." Could we not have worked through this together? Did you have to hold everything behind a dam and come out and go, "Surprise." Now, look at the position you've put me in. That's what I'm imagining is going through the CMO's mind.
David: You know what would make that better, is if we outlawed presentation decks and said, "You must update the client twice a week on the progress you're showing," and it must be handwritten, like a sketch or a picture of something on a whiteboard, or whatever. Maybe it doesn't need to be that extreme, but that presentation deck has influenced us in the wrong direction.
Blair: I agree. There should be no big reveals, just a series of ongoing little reveals, where the most important people on the client side have bought in. If you are in this moment where you're doing a presentation to the CMO and their team, the CMO should already know what you're presenting. You should not be putting this person, your most valuable client, in this position where if you get this wrong, they look stupid.
David: If you have to back up, that beep, beep, beep-- I've got one vehicle that does that, and I hate to leave a campground early because it wakes everybody up. If you've got to go beep, beep, beep in your presentation, that beep, beep, beep shouldn't last very long. You should never have to back up very far.
Blair: Got you.
David: Man, the way I can come up with images is just remarkable.
Blair: [chuckles] I was thinking of that meme you sent the other day of the old guy saying, "I hate all this new technology in cars. I put it in reverse, and now they're showing me a video of a guy getting run over."
David: [laughs] I know. That's a great one. Oh, goodness.
Blair: Second thing that you should adapt to under your banner of why this matters to you is, your ideas should be designed to make them easily stealable. Explain that. What do you mean stealable? I think you meant the CEO should be able to take credit for this.
David: Yes, that's it. All right, let's go to the third one. That was pretty obvious. Speak the CFO's language calmly. The CFOs, instead of brand, talk about financial performance, growth, innovation. Just speak in a way that not just the CMO that you imagine wants to hear things, but speak in language so that when the CMO repeats what you're saying, they're using language that makes sense to other C-level people.
Blair: I really like this point. I'm imagining many creative people in front of the CEO doing some pitch or presentation and speaking CMO or marketing language to the marketer, and the marketer is thinking, "How do I sell this to my CFO?" In an ideal world, you on the agency side, you're a financial literacy advocate for the CMO. You're helping to frame the decision and the benefits in terms of return on investment and other financial metrics.
Rather than forcing the CMO to be the translator of marketing speak into financial speak, you should be speaking financial speak to your chief marketing officer or client.
David: Yes, because there are certain times when you cannot control what I call the representation problem. You can't be in every meeting where they talk about your input. You just got to give the language to the person who's going to represent you so that they can do it well.
Blair: It's almost like creating a deck for this CMO, knowing that deck has to travel into the organization on its own. The deck is a bit of a sales pitch, not to the CMO, but to the people that the CMO is going to have to sell to. I'm not in favor of doing that, but it's a similar idea, is-- You're coming to the CMO with language that you want them and they want to use with their CFO.
David: Yes, and that's the fourth point too, is really talk about enterprise growth. Try not to even use the marketing word because that's turned a little bit dirty. It's not all doom and gloom here because there was something else in this survey that really caught my eye. I referenced it at the beginning of this article. It says, "CEOs like their CMOs more than they ever have." 79% say they're strongly aligned with their marketing leader, which is a five-year high.
Now, they don't think they do a lot and they think they're a cost center, but they really like these people and they have a good relationship with them. That would be my advice to CMOs. It's like, okay, use that relationship. Try to get super candid feedback from your boss, and then use that. Maybe you as an agency would help the CMO improve their relationship with the CMO. They already have a good relationship. They just don't have a good value story there. Maybe that could be something you could help them with.
Blair: Yes, the CMO has to sell to the CFO and the CEO primarily. They need to be able to speak the language to both of those other executives. We did an episode on bounded rationality where we talked about the idea that, for anybody to make a decision on anything, you have to draw a circle around the amount of information that you're going to consider. Otherwise, we'd all be impaired with too much information and we could never make a decision.
Bounded rationality in an organization tends to break down along silos. I've long observed that people in a large organization tend to be aligned to the goals of the department and not the organization. The only people in an organization who are aligned to the goals of the organization itself are the CEO and people who are potential future CEOs. There are two audiences that you want to imagine yourself speaking to through the CMO.
One is the CFO, who's concerned about return on investment. The other is the CEO, who doesn't really care about marketing per se but is deeply concerned with the overall direction and performance across multiple dimensions of the organization. The CEO is the person who is unbounded, un-siloed in their thinking. If you can think and speak like a CEO and a CFO to your CMO client, I think you're just two steps ahead.
David: If it's true that marketing departments are viewed more as a cost center, they're going to have to start understanding how to talk to CFOs. That's who you talk to if you're a cost center, right? If you're more about growth, you're going to relate more to the CEO. The other thing we're not seeing out there is too many CEOs being replaced by people who come from the CMO track. It's more CFO, COO, CTO, which, if we can turn that around, we'll start to see more activity on that side of things, probably, too.
Blair: Yes. I think a good future topic for you to tackle, certainly not me, is speaking the CFO's language to your CMO client.
David: Oh, yes. Okay. I'll think about that and it'll be my idea when I do it.
Blair: [laughs] Fell flat. Okay. All right. This was fun. Thanks, David.
David: Thanks, Blair.