Traditionally, chief executives of FTSE 100 firms have been chief financial officers rather than chief marketing officers (CMOs), but that is starting to change. At private-equity backed firms, 24% of chief executives come from a marketing background, while 19% are from finance. A study at the University of Notre Dame looked at 155 companies listed in the United States and found that the firms with a CMO in the chief executive’s chair outperformed the rest by 15%.
What makes a CMO the natural choice for chief executive?
In 2015, 80% of S&P 500 companies were businesses based on intangible assets, including firms like Uber and Airbnb that rely heavily on customer relationships. “If that’s the case, then why shouldn’t the CMO be the CEO of tomorrow?” asked Vivek Kumar, chairman of the Asia-Pacific advisory board of the Global CMO Council.
CMOs who become chief executives have broad and deep skills and experience beyond being great marketers. “If we want to be the highest-paid person in the organisation, we have to have an informed opinion,” said Ruth Rowan, group executive of marketing at Dimension Data. “We need to go sideways and do other things - run a business, then come back to marketing. That’s the career path we need to take if we want to be credible CEOs.”
CMOs who want to make chief executive need cross-functional, cross-country and general management experience. More importantly, candidates have to be able to speak the language of the board and give them the answers to hard business questions.
“The CMO needs to work with sales and financial data and make it into something that is real and answers the questions that the board is asking,” said Mr Kumar. “Who are the most valuable customers for us? What are the non- customers thinking about? What can we do to swing them? Those are the larger questions.”
Download the full Executive Summary from The Economist Group website.
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The Economist Group is Knowledge partner of The Marketing Society Asia. |
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