Hiring an Effective CMO
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Originally Posted On: https://cowenpartners.com/hiring-an-effective-cmo/
The chief marketing officer, or CMO, is tasked with a wide array of responsibilities. They may oversee the strategic sales direction of the company, its marketing activities, and customer satisfaction.
However, studies have found that many CMOs don’t last long in their positions. Harvard Business Review found that over 57% of CMOs had been in their roles for fewer than three years, while CEOs tended to hold their positions for an average of eight years.
There also appears to be a lack of trust in CMO performance. A stunning 80% of CEOs don’t trust their current CMO, while only 10% lack trust in their CFOs.
The Harvard Business Review study suggested that this lack of confidence may be due to undefined job descriptions or expectations. CMOs are typically given less authority for decision-making than their other executive counterparts.
What Are CEOs, CFOs, and CTOs Responsible for?
While other executives typically have well-defined responsibilities that don’t change from business to business, a CMO’s role may be entirely different from one company to the next. An examination of typical executive responsibilities includes the following:
Chief Executive Officer CEO
A chief executive officer, or CEO, is tasked with the oversight of the entire organization. They also act as a liaison between the company and its board of directors and stockholders. Other tasks may include:
- Leading short- and long-term strategy
- Creating and implementing the company’s mission and values
- Overseeing other executive leaders and their departments
- Staying aware of the competitive market landscape
- Assessing risks to the company
In addition, the CEO must be able to lead the company. The most successful CEOs are highly respected by their employees as well as external parties.
Chief Financial Officer CFO
The chief financial officer, or CFO, spearheads the financial activities of a company. They are the first to know when the company’s performance is lagging or when adjustments need to be made to accommodate future expenses. Additional responsibilities include:
- Presenting financial results to the CEO and board of directors
- Identifying financial risks for the company
- Developing short-term and long-term financial goals
- Acting as a key point of contact between the financial department and auditors
The CFO also oversees process improvements to the finance and accounting departments, such as shortening the length of the monthly close process or deciding when a new ERP system may be appropriate.
Chief Technology Officer CTO
The chief technology officer, or CTO, oversees the IT and any software development departments. Depending on the industry that the company operates in, products may be developed by the IT department and sold to consumers or other businesses. In these cases, the CTO’s role may reach further. Typical areas of CTO oversight include:
- Protecting company IT infrastructure (cybersecurity)
- Ensuring technology is used efficiently
- Suggesting new software to enhance company productivity
- Building quality assurance and data protection processes
A CTO typically has a lot of experience in technology and is able to provide strategic leadership to their staff members. Since technology is constantly changing, they’ll need to remain abreast of new developments.
How Does a CMO Fit Into the Executive Leadership Model?
While the roles of a CEO, CFO, and CTO are typically clear, a CMO’s responsibilities can vary quite a bit. This is particularly true depending on a company’s business model and the industry in which it operates.
For example, an eCommerce company may have its CMO focus on online and digital marketing opportunities. The CMO for this type of company may be charged with advertising development, overseeing the performance of ads, and making strategic changes to the advertising strategy when required.
More traditional, offline companies may focus on business-to-business sales or generating more storefront traffic. These types of companies are looking to drive customer retention and increase their footprints in their local markets or industry sectors.
It’s also important to note that the CMO’s responsibilities can overlap with certain other functions. For example, a CEO is tasked with developing the overall business strategy, while the CMO handles marketing strategy.
If the CMO isn’t given the appropriate authority to act on the marketing strategy they develop, their performance and the overall revenue of the business may suffer.
What Should a Business Look for When Hiring a CMO?
Prior to hiring a CMO, the company should take a close look at the responsibilities they want the CMO to handle. As discussed, these responsibilities will vary depending upon the industry that the company operates in, the types of customers that it has, and the typical modes that it uses for advertising or generating sales.
The company should also determine whether the CMO is to fulfill a strategy-driven role or one that’s intended to increase sales and commercialization. A strategy-driven position may be necessary for designing a growth strategy, such as overseeing the development of new product features and taking the pulse on customer insights.
On the other hand, a commercialization role focuses on enhancing the company’s commercial footprint through the use of advertising, promotions, and events. Both roles are different from one another and will have separate requirements.
Once the job description has been finalized, the company can look for a CMO. Key features that all CMOs should possess include the ones listed below.
A CMO should be creative in their efforts to reach new customers or design new products and features. The presence of creativity (or a lack of one) can help businesses achieve significant growth among their competitors through the use of innovative advertising strategies or attractive new products.
Deep Knowledge of the Company’s Products
You can’t sell something if you don’t know what it is or what it does. Thus, the CMO must be just as familiar with the company’s products as the CEO and product developers are. They need to know the features of every product and how it can benefit the company’s customers.
Finally, the CMO should have the ability to understand the company’s customers. If they notice that customers are leaving, immediate action should be taken to find out why. A business can only succeed if it continues to retain and attract new customers.
Tips for CMOs
Hiring and keeping a CMO is important to ensuring continued growth and retention of customers. Companies that think critically about the tasks they want their CMOs to oversee, and then clearly define those tasks, are more likely to reap the benefits from a good hire.
They must also give the CMO proper authority to implement key programs designed to improve company revenues.
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