“Beat the Clock: CMOs in Race Against Time” by Aaron Baar, Adweek

Execs say unreal expectations, ROI pressures lead to marketer churn

Published Jan 22, 2007

It’s a tough time to be in marketing, especially if you’re in the top post. This month alone, Volkswagen dismissed CMO Kerri Martin after only 20 months and Sears CMO Joan Chow left last week after just 19 months. In addition, The Gap’s vice president of marketing, Kyle Andrew, is leaving the company later this month to “pursue other opportunities,” and talk continues to swirl that Wal-Mart CMO John Fleming is not long for his position.

Also announcing their impending departures last week: Coca-Cola CMO Mary Minnick, who was passed over for a top job, and ConAgra’s chief growth officer Jacqueline Heslop, who made a “personal decision” to leave, according to a company representative.

It’s no secret that the post of CMO is an increasingly precarious and difficult one. The most recent study on the length of CMO tenures from executive search firm Spencer Stuart, released late last year, confirms that the time spent on the job is gradually dwindling; the average is now 23.2 months, down from 23.5 in 2005 and 23.6 in 2004. “It’s always been a high turnover [position], but it’s speeding up,” says Dave Beals of Jones Lundin Beals in Chicago.

CMOs at large companies are more vulnerable than ever. Many are coming into their jobs facing unrealistic expectations (i.e., a limited understanding on the part of senior executives of what marketers can accomplish) and an increasingly small window to accomplish their goals. Marketing and agency executives, are increasingly wondering whether CMOs simply have become easy targets in a high-pressure environment.

“CMOs are not given enough time to do their jobs,” said Howard Draft, CEO of Interpublic Group’s DraftFCB. “[The job] is a marathon, and while you need to deliver results quarter upon quarter, you need to know how long it’s going to take.”

The factors for this recent spate of CMO departures are varied. And some of these CMOs, like Coke’s Minnick, who left after she was passed over for a promotion, are leaving their jobs voluntarily.

Martin, Chow, Andrew and Fleming either could not be reached or declined comment for this story. Representatives for VW, Sears, The Gap and Wal-Mart also either could not be reached or declined comment.

But there are commonalities about the volume of turnover. First and foremost is the increased financial pressure to improve the bottom line. “It has a lot to do with the economic cycle,” said Rich Stoddart, co-president of Leo Burnett North America. “There was a period where you could squeeze costs out and we’re reaching the end of that. Now you need to drive top-line growth.”

Sears and The Gap both reported lackluster holiday seasons. And Volkswagen, which increased sales in 2006, still missed sales goals and longer sales trends are not promising. “Each of these companies is under tremendous competitive pressure,” said Arthur Anderson of Morgan Anderson Consulting in New York.

Also, the global nature of today’s economy and the speed at which it moves has left many CEOs with unrealistic expectations, said Ian Beavis, vice president of marketing for Kia Motors America. Many chief executives, he said, are looking for a “magic bullet” to solve their bottom-line problems. “Marketing is a complex combination of art and science that requires ruthless pursuit of strategy and tremendous flexibility of execution depending on market conditions,” he said. “There are a lot more CEOs from a financial background who don’t know that.”

That lack of understanding can hamper a CMO’s ability to do the job for which he or she was hired, according to Bob Liodice, president of the Association of National Advertisers, in a blog item last Thursday. “Weak information flow, functional ambiguity and leadership second-guessing have crippled the influence of the CMO.”

Even some who have been effective at creating a buzz for the company through marketing and advertising—like Martin at VW or Andrew at The Gap—can be victims of their own success. “Change disrupts by definition,” Stoddart said. “And if the results don’t come in immediately, the white blood cells attack.”

“There’s no grace period at all,” agreed Lawrence Flanagan, who has been global CMO at MasterCard International for six years. “[CMOs] need to have a vision from day one.”

Flanagan, who has several regional CMOs reporting to him, said he gives underlings “a few weeks” to get acclimated and expects to see “some kind of impact” within a few months. Even so, he said, while “the CMO has to get up to speed quickly, you do have to give one or two business cycles to evaluate whether that person is delivering.”

Additionally, many CMOs are not given authority over areas other than advertising and promotions. “The CMO in a real definition should have accountability for the sales organization and other parts of the company beyond advertising,” said Val DiFebo, president of IPG’s Deutsch in New York. “A real CMO has a broad reach and influence over the product choices, the way they go to market, the sales force and the company’s reputation management.”

These tighter turnaround times and increased focus on bottom-line ROI is having an effect on the agencies as well.

“Just as they are more accountable, so too are we,” said Stoddart.

And when incoming CMOs know they only have a short period of time to show results, they often want to do it with an agency they’re more familiar with than the client’s incumbent. “If I’m a CMO and my butt is on the line, I’m not going to wait six to nine months to see if I can work with the agency—I’m going to bring in the one I like,” said Beals.

Which means it’s likely that some of the accounts will be moving once the vacant CMO positions are filled. “This is unfortunate,” said Anderson. “We don’t need more reviews. We need more work to try to make more agency-client relationships better.”

One way to do that, Beals said, is to make sure everyone from the CEO down has a clear understanding of what marketing and agencies can and can’t do. “I don’t think there’s enough mapping that out,” he said. “The forward-thinking agencies know what they’re getting into.”

In the meantime, agencies need to show how they can improve all pieces of a company’s business, not just its advertising, said Draft. “Agencies have to look at the business more holistically and [identify] the business problems a company faces. Not just the marketing,” Draft said. “The real job for an ad agency is to work for the entire corporation, not just one department.”

—with Gregory Solman, Andrew McMains and Kathleen Sampey


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