CEOs and marketing chiefs don't see eye to eye

There's a disconnect between CEOs and chief marketing officers, and it could be costly, according to research McKinsey and Co. published Oct. 26. 

The firm spoke with more than 100 people in C-level growth roles, like chief marketing officers and chief growth officers, and 21 CEOs from B2B and B2C companies of all sizes across multiple industries. 

A "redefined and reinvigorated" relationship between CEOs and CMOs could create a strong growth channel, according to McKinsey; researchers found that CEOs who center marketing in their growth strategy are twice as likely to have more than 5% annual growth. 

There are three disconnects in the CEO-CMO dynamic that can prohibit it from flourishing, per the firm: 

1. Undefined roles: C-suites have added marketing-adjacent roles — including chief digital officers, chief customer officers and chief growth officers — in recent years. When multiple people on the executive committee are overseeing tasks related to marketing, the CMO's task can become murky. Nine in 10 CEOs said they believe the CMO role is clearly defined, but only half of marketing chiefs gave the same answer as their CEO. 

"Many times, CEOs turn to strategy or operational leaders versus the CMO for growth strategies," the CMO of a large health services company told McKinsey. "As a result, strategies can be more financially and analytically driven versus consumer-led."

2. Underestimated capabilities: CEOs also underestimate the power of marketing roles to drive growth; 40% of Fortune 500 companies do not have a single growth or customer related role in the executive committee. 

According to McKinsey's research, the number of martech solutions has doubled every year over the past five years, resulting in 11,000 solutions so far in 2023. It would be difficult for a CEO without a marketing background to keep up on their own, and without a strong CMO relationship, they could be outpaced by change. 

And although 50% of CEO respondents said they felt comfortable with modern marketing, 66% of CMOs said their CEOs were not comfortable with modern marketing. There's a gap in CEOs' knowledge of rapidly changing capabilities that CMOs can help fill to drive results. 

3. Missing link between capabilities and impact: Surveyed CEOs feel that marketing metrics clearly tie to business impact less than 60% of the time; when asked what their top three marketing metrics were, CEOs and CMOs only agreed half the time. 

CEOs are more focused on business outcomes like year-over-year revenue growth and margin improvements, while CMOs prioritize operational metrics like brand awareness and recognition. As a result, they "aren't running to the same finish line," per McKinsey. 

"The world has changed with data and technology that has enabled measurement," the CMO of a large health services company told McKinsey. "Marketers are speaking a complex language and drown CEOs and CFOs in data. But they need to answer the question: Why is this a good business decision?"

To bridge these gaps, CEOs must 1.) clearly define the marketing role and its place in the long-term strategy, then set them up for success with the proper funding and resources; 2.) engage closely with the CMO in the same way they do with other executive leaders, outside cuts of a new TV commercial; and 3.) ensure alignment on key performance indicators that are most important to growth. 

"Our research is clear: companies that place marketing at the core of their growth strategy perform better," the report concludes.

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