Why CMO tenure is falling and what you can do about it

Marketing leaders are under increasing pressure to lead digital change and customer-led ways of working, and it's contributing to rapid leadership turnover. We investigate how CMOs can improve their sustainability

After years of witnessing CMO tenure rise, turnover is experiencing a backflip and averages are plummeting.

According to the annual CMO tenure report produced in the US by consultancy, Spencer Stuart, average tenure dropped from 48 months in 2014 to 44 months in 2015. But it was the median that was more interesting. From a high of 35.5 months in 2014, this has fallen to 26.5 months in 2015. The data is based on an analysis of CMO tenures from 100 of the top US advertised brands.

CMO’s own research of Australian marketing leaders indicates a similar trend. Thirty per cent of the CMO50 list for 2015, or 14 of the 50 marketers profiled, either left their position, were promoted locally or globally, or gained new or expanded responsibility in the past year. CMO’s wider canvassing of 200 local marketing leaders in recent months has also shown more than 50 to have left or taken up their role in the last 12 months.

A recent survey conducted by Russell Reynolds Associates of 175 top and notable US companies is also telling. Half of the 30 retailers studied turned over their CMO in the last 12 months. In addition, 2016 has seen the highest level of marketing leader appointments and turnover since tracking began four years ago, with 185 appointments made in the first six months of the year, up from 147 in the prior six months and 134 in the same period the previous year.

In yet another survey, this time conducted by Marketing Week, 81 per cent of UK marketers plan to leave their post in the next three years, with 39 per cent aiming for the door in the next 12 months.

Australian Marketing Institute (AMI) CEO, Lee Tonitto, finds the numbers concerning, and suggests a plethora of reasons for them. The accelerating pace of business change is the obvious one.

“Without doubt, CEOs and board members have been pushing CMOs hard for growth and innovation and also to lead large-scale transformation programs,” she tells CMO. “All of this is underpinned by dealing with unmet customer needs and pain points.

“Coupled with that, boards and CEOs are frustrated by the difficulty of finding CMOs with the range of requisite skills to execute against growth, innovation and leading change. Turnover rates for CMOs are therefore high because they’re in the maelstrom of change, relative to their c-level peers. The other issue is they’re in short supply.”

Technological and digital innovation, momentum towards short terminism, the ongoing quest to prove marketing’s effectiveness to the board, new c-level roles and the rise of first-time marketing leaders in the c-suite are some other reasons marketing and industry experts offer up to explain why tenure is hitting the skids.

But does that mean rapid turnover is inevitable and here to stay? And if that’s the case, what can Australian CMOs and aspirants do about it?

Balancing supply with demand

Former Scentre Group (Westfield) marketing leader, John Batistich, cites supply and demand factors behind the ever-shortening tenure of CMOs.

“Marketers inherently have a certain sense of ambition and entrepreneurialism, and we know marketing tenure is generally lower than the CEO and CFO,” he claims. “There’s lots of opportunity and high demand for great marketing leaders in Australia.”

With that is the question of who is willing and able to take on a broadening CMO role. According to Batistich, there is a very strong, effective group – locally at least – that stands head and shoulders above the CMO pack.

“I keep hearing there is a very long tail after that,” he continues. “Those standing above have a broader remit and can engage at boardroom level beyond their function. They’re business leaders first, marketers second. Too many marketers are what I call marketing ‘purists’ and are not willing to contribute across the entire business. Those with bigger executive presence are in high demand. That creates movement.”

Yet there are undoubtedly unrealistic expectations being placed on what some CMOs can achieve. Batistich argues the CMO role has witnessed more expansion and change than many other functions, a trend he puts firmly at the foot of rapid technology and digital innovation.

“Along with their CIO/CTO peers, there is no other role whose careers and role has changed so dramatically as the CMO's,” he says. “Importantly, there is increased complexity, less resources and a need for higher speed with less time. There’s pressure and expectations around these roles as a result.”

Measuring marketing’s effectiveness is adding to this complexity, Tonitto says. She points to marketing technologies, such as automation, attribution, digital and voice of customer research as among the many tools marketers now have at their disposal to measure ROI.

Along with their CIO/CTO peers, there is no other role whose careers and role has changed so dramatically as the CMO's

John Batistich


“Stakeholder management, and having a ‘balanced scorecard’ of the measures the c-suite and CEO agree with to define what success looks like is vital,” she says. “Every business is different, and will have nuances. With the investment being put into martech, it’s imperative that prior to any activity, milestones and what success looks like for marketers must be defined amongst stakeholders. Then CMOs must measure against these, share and debate the learnings.”

While the AMI continues to work of benchmarks that demonstrate the value of marketing, Tonitto says metrics are ultimately going to come down to the individual organisation. “There is no shortage of tools and investment, but the buy-in is critical and you have to get that upfront,” she says.

IDC CMO Advisory Service vice-president, Kathleen Schaub, says wider opportunities for good CMOs thanks to digital disruption is a positive aspect of such rapid churn. In the analyst group’s study of technology sector CMOs in 2014, it found 51 per cent had held their positions for under two years.

As an examples of why it’s a positive, she points to the shift of tech-based marketing leaders into other ‘fast follower’ sectors, such as manufacturing, that are now looking for digital and technology expertise.

There is of course a negative however, and Schaub suggests it’s the required ‘fit’ for a new CMO to lead digital transformation and customer centricity, and a lack of confidence in whether current marketing leaders can fulfil that need.

“The other problem is a company one,” she says. “We see a fair number of CMOs frustrated with their traditional companies because they just don’t get it. Sometimes they expect CMOs to accomplish something that’s not doable given their circumstances.

“We’ve seen churn because of this frustration, and also because a company brings someone in but either doesn’t give them the money or resources they need, or expects them to still also serve the sales force and stick to traditional modus operandi.”

This trend is particularly apparent in ‘second platform companies’ experiencing low or negative growth, according to IDC. “They want a CMO to change that but they haven’t changed their business model or product line significantly,” Schaub says.

Reshaping the role

Locally, there have been number of CMO roles scrapped or reshaped over the past year as organisations restructure executive positions to suit fresh go-to-market objectives. This list includes Helloworld, Kellogg’s, Sheridan Group and Super Retail Group.

For Tonitto, these changes illustrate the need for marketers to carefully consider the type of CMO role required in their organisation, and what support exists for them to grow their sphere of influence.

“When the assignment is clear and crisp, and human and financial resources plus support from stakeholders is there, marketers can do a fantastic job of guiding a new vision,” she continues. “If elements are missing in the mix at the start or early on, it can be very challenging for CMOs to recover from that position.

“It’s less about redundancy and restructure, it’s just imperative to make sure you understand the assignment you are stepping into.”

A trend towards more strategic sprints today is another factor triggering a reduction in tenure, Tonitto says, and she argues turnover of CEOs and CIOs could also be affected. The numbers are out there: A study of CEO tenure by PricewaterhouseCoopers in 2015 for example, found CEO turnover across the world’s largest 2500 companies rose by 14.3 per cent in 2014 to a record 16.6 per cent in 2015.

“The average lifespan of a c-suite role will be shortening because of that need to deliver on changes to the ‘why’ we are in business as well as the ‘how’,” Tonitto claims.

“There’s a relentless chase for growth, transformation and innovation from organisations to keep up and have the rightful share of the market businesses need to meet unrelenting needs of shareholders. CEOs and boards have a duty to deliver returns to shareholders. It’s up to the business to have the right people and performance to deliver against that.”

Coping with new executive structures

There’s also the question of who assumes a CMO’s post in the first place. Batistich spots a rise in underprepared candidates and first-time CMOs being appointed in Australia, and to promote beyond capability.

“There’s a big step change between in terms of experience, knowledge, capability and impact at that executive level,” he claims.

Meanwhile, old marketing methods don’t work like they used to. “There are new channels, fragmentation, innovation and finding the right skills and a breadth of skills that translate from data and social, to shifting demographics and integrating the customer experience, all the experiential that’s growing, then collaborating with a new executive set,” Batistich says.

This is contributing to a host of new c-suite roles being developed, such as chief digital officer, chief data officer, chief customer officer and even chief brand officer.

“These roles in some organisations are starting to impact the empowerment, accountability and ownership of brand and communication, customer journey and most importantly, digital,” Batistich says, adding that he’s amazed at how many marketing peers don’t own their digital capability and stack.

Schaub took a broader view, seeing roles such as chief digital officer and chief customer officer as point-in-time positions created as organisations repositioning around digital capability and customer centricity.

“One of the important jobs in business during digital transformation is to dissolve or soften the edges of functional silos and reorient processes to be more customer serving,” she comments. “So who is in charge of these customer processes? Just look at the size of the switching economy, which is almost US$2 trillion. For some sectors, that’s a bigger issue than getting a new customer. So is that marketing’s remit today?”

Schaub predicts experimentation with different c-suite roles is set to continue for the next few years as companies try and figure out how to make customer centricity the natural way of working.

For Tonitto, it’s marketers who should be fostering customer-led collaboration. “The CMO has a huge opportunity to inform the culture, break down silos and lead and demonstrate through that leadership, horizontal thinking, so the right solutions go to the right customers at the right time,” she says.

“You need to foster marketing teams that are able to think horizontally and in an integrated way their across product and solution sets, in a multi-channel and omni-channel way.”

As if that wasn’t enough, short terminism – both on the part of marketing as well as the business – could also be impacting the tenure of CMOs. Batistich for one sees short-term thinking to be on the rise, especially from executive peers and business leaders.

“We’re looking for quicker results than what the market is responding to,” he says.

This sentiment was echoed in a report by the IPA in June, which claimed short-term campaign metrics were triggering a sharp drop in creativity and seeing budgets diverted away from longer-term brand building. Based on an analysis of the IPA Effectiveness Awards, the report found 30 per cent of award-winning campaigns have their success measured over just six months.

In an interview with Marketing Week, the report’s author, Peter Field, said such short-term thinking contributes to shorter tenure by “undermining some of the motivation of seeing things through”. And it’s putting marketers under increasingly short-term pressure, making it harder for them prove long-term effectiveness.

What CMOs can do about it

So given change is the new normal, will the CMO tenure situation improve? Tonitto suggests not. “If anything, it’s going to push greater [tenure] velocity,” she says.

Schaub puts a positive spin on rapid turnover, suggesting the movement of people helps new ideas spread. “Innovation is exploding, people are moving aside for new ideas to happen, or being forced to address the fact they need to make this change,” she says. “It’s painful, but positive and needed.”

Batistich, however, is calling on the marketing community to stem CMO churn by lifting their game professionally. As a key first step, he advises marketers to invest in developing their skills to keep current at a time of rapid change.

“The future marketer is a combination of someone who really understands data analytics and extracts insight, experience design, engineering and building of technology that solves problems and creates utility,” he says. “They’re someone who gets context, conversations and content.”

Secondly, Batistich highlights the importance of being more than just a functional head.

“This is about changing the lens from marketing first, to organisation first, and having an ability to comment and have conversations with the c-suite on any issue or matter in the organisation,” he says. “Unfortunately, too many marketers are trying to just talk brand or communications at the c-suite level.

“Mostly, it’s about customer experience, changes in customers and around channels, business value, and effectiveness. Rather than adopting a parochial and defensive position around marketing, it’s how to continue to evolve and transform into a much more effective marketing organisation in the best interests of the company. And that means engagement, curiosity and taking others with you.”

Tonitto agrees that as marketers climb the ladder, it’s less about being a technician, and more about sustainable leadership.

“Five years ago, content marketing didn’t exist, nor did chief data officers. You need to be nimble, agile and keep evolving yourself and have as part of your mix that dedication to lifelong learning,” she says. “It’s that sort of thing that will keep you employable.”

Tonitto also recommends marketers looking at a potential career change to do their homework on the organisation they’re heading into.

“If you have picked a broken business or one that’s in transformation, then the cycles will be shorter,” she says. “If you’re in a business in a particular phase of growth where you can ride that wave and you’ve been appointed a team, your tenure may be longer. Some businesses are tied to legislative growth, for example, and that’s steadier.

“You need to clarify the broadening role of marketing.”

In addition, there’s the question of whether a CMO is being placed in a narrowcast or more strategic role. “If there has been a strategy change, what people are recruited for and what skillsets are needed can change rapidly,” Tonitto points out.

“You need to make sure that you do your due diligence of these roles as much as you can. Know what the next 12-24 months in that business look like.”

Of course, tenure has to support career progression, Batistich says. While at Westfield, he notes he was given a number of opportunities to expand his remit, leading him to stay nine years with the organisation.

“The organisation needs to be willing and have those opportunities to expand, but the marketer also has to prove that willingness and ability to expand and improve,” he says.

And with marketing becoming so fragmented, it’s critical to surround yourself with great people and always be on the lookout for emerging talent, Tonitto says.

“Our count is that there are 63 disciplines in marketing and more than 3500 martech platforms, so you need to figure out a way to stay in touch with broader marketing environment and what opportunities exist, and the tools, techniques and so on available to you to execute and deliver for your business,” she says.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu

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