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strategy and business
 / Winter 2004 / Issue 37(originally published by Booz & Company)


Making the Perfect Marketer

Although these forms of measurement may be valid to the tasks at hand, we surmise they have not been adequately explained and "sold in" to other senior executives, who typically come from backgrounds with different rigors. Among marketers themselves, there is a lingering, if fading, fear that too much "science" might dampen the "art" of marketing. Some marketing chiefs value unbridled creativity and innovation over multivariate regression models that isolate the incremental consumption delivered by a new program or ad execution. Although this communication gap involving metrics is understandable, given the novelty of the CMO position relative to other officer positions, it appears to be contributing to the diminished status of CMOs in many companies.

The Successful CMO
In general, corporate responses to the question of marketing's relevance have fallen short of what is required. By focusing largely on reorganization and upheaval rather than upgrading metrics and building new capabilities to meet the CEO's expectations, companies are consigning themselves to renewing disappointment. In our in-depth interviews with marketers, however, we explored some of the emerging best practices that successful marketing organizations are employing to align themselves with the CEO agenda. We've distilled these lessons into five success factors for actual -- and prospective -- CMOs.

1. In conjunction with senior leadership, consciously choose from among the three emerging CMO models the one best suited to the company and its current needs. Our interviews indicate that three distinct models are developing out of the chaos of the CMO position's early years: Marketing Service Provider, Marketing Advisor, and Driver of Growth. These coincide roughly with the three models found by Harvard professors Gail McGovern and John A. Quelch. (See "The Fall and Rise of the CMO," s+b, Winter 2004.) Although our three models overlap, each reflects different CEO expectations, and thus different capabilities of the CMO and his or her team, on a scale that slides up from the purely tactical to the heavily strategic.

Marketing Service Providers, for example, lead a small corporate staff function; manage marketing services that offer centralization benefits, such as media buying; and coordinate marketing-service supplier relationships. Marketing Advisors tend to lead a corporate marketing function, help align division marketing plans with corporate strategies, ensure compliance with corporate trademark and brand guidelines, and coordinate the sharing of best practices across the businesses.

Drivers of Growth, by contrast, partner with the CEO in propelling the corporate growth agenda; direct brand strategy, business development, and innovation; drive the marketing capability agenda and ROI; and are empowered by the CEO to align marketing in the business units, and their personnel, with the central agenda.

2. Agree from the beginning on a "marketing contract" with the CEO, and continually check progress against it. If marketing metrics differ from organization to organization, if the CMO role varies from one company to another, it stands to reason that a new chief marketing officer may have an indistinct understanding of his or her goals and authority. A leadership contract is an effective tool for establishing the decision rights needed to lead an effective organization. The key elements of the contract are:

Agenda. Whether the objectives are prosecuting the CEO's growth strategy or raising brand awareness, marketers and the chief executive must be unified. As one senior marketer told us, "Don't even think of having a CMO without the support of the CEO."

Controls. "Marketing may not have full control over all of the 'Ps,' but it should have a strong say," a top automotive marketer said. If marketing is charged with developing and executing a strategy aimed at realizing benefits from premium pricing, for example, it ought to have some authority in making pricing decisions.

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  1. “The Customer-Centric Organization: From Pushing Products to Winning Customers,” Booz Allen Hamilton, August 2004; Click here. 
  2. Leslie H. Moeller, Sharat K. Mathur, and Randall Rothenberg, “The Better Half: The Artful Science of ROI Marketing,” s+b, Spring 2003; Click here.
  3. Gary Neilson, Bruce A. Pasternack, and Decio Mendes, “The Four Bases of Organizational DNA,” s+b, Winter 2003; Click here.
  4. Kenneth C. Bator, “Why Marketing Should Report to the CEO,” ABA Bank Marketing, Jan.–Feb. 2004, Click here. 
  5. Philip Kotler, “Marketing and the CEO: Why CEOs Are Fed Up with Marketing,” Strategy, May 3, 2004
  6. Don E. Schultz, “Marketing Gets No Respect in the Boardroom,” Marketing News, November 24, 2003
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