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What Does It Take for CMOs to Become CEOs?
Overall, things are looking good for chief marketing officers. Among the trends they’re enjoying: longer tenures than ever. Years in office have grown steadily over the last decade, executive recruiting firm Spencer Stuart has found:
Combine that with fast growing budgets and an unprecedented ability to place messaging in front of customers, and it’s hard to miss the opportunity that lies ahead for heads of marketing departments.
Naturally, this opportunity includes the head of the company. But that’s not as easy as it sounds—and CMOs aren’t becoming CEOs as often as, say, CFOs.
While this may sound intuitive now—CFOs are in charge of the “money” function, after all, and you can’t run a business without money—Finance employees weren’t always thought of as strategic partners.
Instead, they were “bean counters”—employees with rigid workflows who had to track how money moved in and out of the company, in addition to monitoring adherence to any applicable accounting regulations. There was no “partnership” or strategic advice inherent in the work. In fact, three decades ago chances were there might not even be a CFO at all. In 1978, only about a tenth of companies had a chief finance officer, according to a Princeton University study that examined 429 large US companies.
So how did this role become a frontrunner for the CEO spot—and how can CMOs emulate that ascendance?
One key factor (of many—like the booming importance of financial markets in the 1980s) was being able to aggregate the information it has access to and build its analytics capabilities. When you have access to data that lets you assess performance and predict outcomes, you can make recommendations that impact the whole enterprise, and become a major C-Suite player.
Sixty-one percent of CFOs said being able to interpret key data trends is essential for some or all of their finance staff, according to a Robert Half Management Resources survey of 2,100 US respondents.
And here’s how the interest in the analytics-specific arm of Finance—Financial Planning & Analysis (FP&A)—has evolved over the past decade, according to Google.
These new capabilities have allowed Finance to advise different business units on investment decisions and better allocate resources to other departments, demonstrating the cross-functional applications of its accumulated information. Take a look at how Finance teams today are steering the enterprise using the financial data they have access to:
But if Finance is the “money” function, Marketing is the “customer” function — and businesses can’t succeed without customers. The modern CMO has more access than ever to data about how customers become aware of the brand, their path toward purchases, and which experiences bring them back to the brand for more. Marketing, therefore, is in a position to deliver similar enterprise-wide recommendations by gleaning customer-centric insights.
You can learn more about the professional landscape senior marketers face—like the growing pressure to demonstrate ROI and the difficulty in grabbing customers’ attention— in our whitepaper, Long Journey to the Top: Trends for the Modern CMO.
And you can learn more about the lessons Marketing can adopt from other parts of the company by downloading The C-Suite Handbook: Lessons for the Modern CMO—a follow-up that shows how to overcome the challenges ahead and seize the opportunity that awaits.