In a consumer-led economy, the CMO should be the new CEO

It's time businesses looked to marketing for their future leadership, writes the chief executive of the Chartered Institute of Marketing.

The natural choice to fill the chief executive role has traditionally been the chief financial officer or chief operating officer. Their combination of financial and operational corporate acumen was thought to provide the best possible skill set when it came to taking over the reins.

Ultimately, it was thought that being able to measure the finances and the cash flow accurately was the key to maximising organisational growth.  

This equation worked in an economy where business dictated the terms, but in today’s increasingly consumer-led economy, the CFO and COO are no longer the natural choice. Increasingly the astute choice is the chief marketing officer.

The rise of the consumer-led economy, driven by the shift to digital business, is changing the way that organisations need to operate and, as a consequence, the requirements for their leadership.

In the past, marketing’s Achilles heel was its inability to measure and prove the impact of marketing activity on business outcomes.

A survey carried out by PwC in 2015 highlighted the key skills needed for a CEO to be successful in today’s ever changing business environment. These were highlighted as: strategic vision; the ability to cope with ambiguity and change; agility and making decisions; and being at ease with technology.

In responding to these criteria, the role of the CMO is more fitting than that of the CFO.

Management boards are now looking not just at how to drive top line growth, but also digital transformation, innovation, rapid change and the creation of differentiating customer experience that will drive consumer loyalty and organisational value.

Many sectors are being transformed and reshaped by digitally-led businesses purposely disrupting traditional business models. This is being driven by consumers demanding a more responsive and personalised experience. Key examples of this include Uber, Airbnb and Purple Bricks.

In the past, marketing’s Achilles heel was its inability to measure and prove the impact of marketing activity on business outcomes.

It was always a frustration of the CFO in not being able to tangibly or readily calculate the return on marketing investment, marking it up instead as another cost.

But technology and data have made it possible to directly link marketing to performance and profits, let alone affording a much better understanding of the customer.

It’s no wonder then that CMOs are being increasingly charged with driving organisational transformation and creating results.

In a survey looking at the growth of CMOs moving up to CEO, Korn Ferry highlighted that marketers are reinventing business models and creating new go-to-market strategies.

It is CMOs who are often tasked with the strategic agenda to drive value for the business and its shareholders, aligning teams, marshalling resources and driving change to achieve the objectives of an organisation.  

Some 53% of executives polled by Korn Ferry said their current CMO could one day become CEO.

David Shrank, the digital strategy leader for Deloitte Consulting, was right to observe that the role of the CMO has changed dramatically in recent years, with the new breed often shortlisted for the top spot.

In choosing the best candidate for CEO, it cannot be a binary choice between the traditional CFO and the increasingly heralded CMO. Personality is a key factor. Any successful organisation needs their top team to form a solid partnership, and the roles of both CMO and CFO are critical to business success.

But in today’s consumer-led world, where globalisation and digital technology are driving constant change and innovation, it is the CMO who is often best placed to understand these trends and lead their organisations, transform the business and grow the bottom line.

Chris Daly is chief executive of the Chartered Institute of Marketing.

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