Businesses struggling to achieve growth have been replacing chief marketing officers with more commercially oriented chief growth officers. IRG led an industry-wide coalition to study how over-performing CMOs are bucking that trend with more humanized growth strategies.
The research covers 500 senior business leaders across 73 markets, a survey of marketers, an AI review of more than 3,000 growth publications, and analysis of the public connections of 3.5 million LinkedIn users.
Key findings
- The growth problem is concentrated at the top. Of all consumer goods growth generated in 2017, only 3 percent was driven by the top 25 players.
- The old formulas have stopped working. Companies that relied on specialization and scale, global expansion and barriers to entry are being overtaken by disruptors that redefine the market, ignore traditional rules and carry none of the old cost infrastructure.
- Marketing’s standing has deteriorated sharply. The research among 500 business leaders finds that both the reputation and business influence of marketing are severely depleted, and one cited study reports that over 70 percent of CEOs do not trust their CMOs to drive business growth.
- The replacement trend is documented company by company. Hershey creating a chief growth officer role in 2014 was seen as an anomaly, Coca-Cola eliminating its CMO role in 2016 alarmed the industry, and by 2019 Kellogg’s, Mars, Tyson, Mondelez, ConAgra, J&J and Kimberly Clark had appointed growth officers, often in place of the CMO.
- Over-performing organizations define humanized growth as their overarching ambition, serving a broader set of stakeholders on the conviction that prioritizing the value created for all people brings the financial results, if not next quarter then in the long run.
The digital distraction argument
The authors take the criticism seriously. Marketing has changed beyond recognition since 2000: the objectives may be the same, but the creative, channels, media, technology, metrics and agencies are largely new, and for two decades the focus has been on getting the right message to the right person at the right time for the lowest cost.
The lure was the oldest complaint in the trade, knowing which half of the media spend was working, plus the promise that everything was cheaper and faster. The resulting pressure produced some striking demands, including a board member at an industrial supplies company asking for as many likes as Coca-Cola had.
The real damage, the authors argue, was not the shift in media spend but the neglect of another responsibility: helping define the company’s business growth or where to play strategy, in which marketing partners with the business to choose markets, consumers, solutions and positioning.
That shift is their explanation for the credibility loss and for why companies looked elsewhere, including to the chief growth officer role, to fill the void.
The seven building blocks
The overarching block is the why. Over-performers formulate a mission that recognizes a broader set of stakeholders than shareholders and set out to make a positive impact on the lives of consumers, colleagues and communities. It is often the marketing leader who owns articulating and embedding that ambition.
Three blocks cover the what: the market being played in, the business model, and the proposition. Over-performers define the market in more abundant terms by unlocking their data with human insight to address both manifest and latent needs.
The IKEA example makes the point about data and insight. Analysis of social posts revealed that the icon product was not the Billy bookcase but the Swedish meatballs served in its restaurants, a food experience that connects American consumers to something they find exotic and back to basics.
On the offer, the authors dispute the common belief that positive satisfaction and net promoter scores mean revenue will grow. Over-performers instead take their cue from what Jeff Bezos calls the always beautifully dissatisfied consumer.
Expectations cross category lines. Airline passengers judge the company on its app compared with Uber’s, and if Amazon delivers free within four hours, consumers will not accept less from anyone else. Over-performers respond with what McDonald’s global CMO Silvia Lagnado calls ever-evolving experiences, at 81 percent against 22 percent.
Spotify is the example of permanent improvement, from personalized playlists to daily mixes that mix familiar songs with algorithmic new ones, creating small moments of surprise. Randstad’s tech and touch strategy is the counterpart: AI ranks applications in real time, and the highest ranking 10 percent get a phone call and one-on-one support from a person.
Broader service suites require new partners and new business models, with over-performers reporting far higher willingness to accept new models, at 68 percent against 38 percent. Diageo’s investment in Distill Ventures produced Seedlip, the world’s first distilled non-alcoholic spirit.
That in turn requires commercial acumen. One interviewee puts it as less about the numbers in the ROI model and more about understanding and challenging the assumptions behind it, which is why over-performers invest in finance-for-marketing and commercial training.
How the winners organize
The authors reject two received ideas at once: that culture cannot be changed because it is in the DNA, which they call plain wrong, and that the answer is an elaborate redesign of responsibility models. Over-performers instead build a more open organization whose internal and external connections are aligned to the growth challenge.
The LinkedIn analysis quantifies it. Senior leaders in over-performing organizations have 5.5 times more connections with junior colleagues, and marketing and sales staff are 3.5 times more connected to colleagues in HR, finance and IT.
Culture shows up in language. Over-performers over-index on entrepreneurship, innovation and change, while under-performers lean toward procedures, structure and quality, and over-performers prioritize breaking down internal barriers at 50 percent against 29 percent.
The practices cited are specific. Google’s Area 21 rewrote its own KPIs and incentives after finding corporate HR policy rewarded individuals rather than teams. Coke delegates creative approval within 24 hours to employees closest to the customer. Netflix has a rule against toxic hires because a rotten apple infects the basket. Verizon’s Creators program moves younger colleagues between client and agency on a career path more like a jungle gym.
GO-JEK is the extended case. Started in 2010 as a motorcycle ride-hailing phone service, it became an on-demand super-app across transport, logistics, food, grocery, hairdressing and payments, operating in 204 cities across five countries. It appoints mini-CEOs as product managers across more than eighteen verticals with end-to-end ownership.
The company’s CEO states the trade plainly: you cannot put a crazy target on someone’s head and then micromanage them to achieve it, so the answer is whatever it takes, you are the boss, you decide how to hit target.
The conclusion about titles
The authors argue that CMOs who put the human at the center of the why, the what and the how are treated as full business partners with real strategic influence, and that companies now need leaders who can think through every interaction with the outside world, not only with customers.
Two examples show the profile already working. Diego Scotti’s role at Verizon included all corporate communication and CSR from the start. Silvia Lagnado spent her first year at McDonald’s developing the corporate growth strategy with the new CEO and head of corporate strategy before turning to marketing activation.
The authors stress expectation management, noting that unlike the CFO role there are wildly varying expectations among CEOs and peers about the scope of the CMO role, and that this must be addressed directly rather than through new titles.
Their verdict is that the CMO or CGO debate is a red herring. Success is determined by delivery against the needs of the organization and the expectations of colleagues, not by changing titles.
Scope and limitations
The document is a draft, and carries an editorial note flagging a repeated statistic in the text. Comparisons are between growth over-performers and under-performers based on three-year revenue performance versus competition.
Source
This page summarises CMOs Driving Humanized Growth, by Marc de Swaan Arons, Frank van den Driest, 2019.