Why CMOs Fail, and Why They Don’t Have To
The average tenure of a new CMO, according to one study, is less than 24 months. And in a recent study, 60% of respondents thought that this failure was not due to the CMO’s failures but to the fact that the company was not as open to change as they thought. CMOs are hired to drive a change agenda, but just can’t get enough support.
My take is a bit more nuanced. Most organizations do inhibit change and thwart CMO objectives. But how, and why? I believe the power of the product and sometimes the country or functional silo units are the primary impediments. Nearly every organization is decentralized with silo units that have budget and strategy power. One rationale is that such power provides accountability and close-to-the-market decision making. To give up that power would, in the view of silo executives, make their job more complex, more difficult and less personally rewarding. Since much of the CMO agenda aims to impose some synergy and efficiency on the silo structure, there is a conflict. And again and again, the silos win.
So what is to be done? I talked to 50 CMOs as part of a study reported in my book, Spanning Silos to determine what works. My central conclusion is that the CMO, in the absence of organizational crises and a CEO committed to break down the silo power, needs to change his or her goals. The CMO teams should strive to enable and encourage cross-silo cooperation and communication instead of attempting to impose centralization and standardization on the silo units. The resulting sets of programs can be non-threatening and still create amazing positive change.
Among the possible collaboration routes are the following:
Define the role of the CMO to be a facilitator, consultant or service provider instead of being a central decision-maker and controller of resources. As a facilitator, the CMO group at Nestle operates centers of excellence around topics such as the Hispanic market, mom & kids, and Walmart, which are shared across silos. As a consultant, the CMO group at Visa gives advice to the country teams on how to interpret and take action on tracking studies. As a supplier, the CMO group at BP became the go-to source of segmentation studies as early efforts were clearly useful and influential.
Use teams. Chevron used a global brand team that was formed with top-level operating people that represent country and product silos. Those representatives were charged with sponsoring a process that would lead to a coherent brand portfolio and brand management system. P&G uses a category management team for each of its major categories to manage the business over brands, over countries and regions and over functional areas including R&D and manufacturing.
Develop and exploit silo spanning programs. The idea is to develop concepts and programs that have traction in the marketplace across silos and that use the implementation to create collaboration and communication. MasterCard creates a series of task force teams to manage one of its major sponsorships, the World Cup, that changed the way that silos viewed and interacted with each other. Programs that span silos such as Pampers baby care, Tide Fabric Advisor, Avon Walk for Break Cancer involve a breakdown of silo barriers.
Identify and leverage great ideas. The ultimate silo tragedy is that an all-too-rare home run product or marketing program is developed in one silo unit and remains hidden from the others, because there is no mechanism to leverage it or make it known to the rest of the organization. To facilitate idea exchange, the silo groups need to be empowered to create offerings and marketing programs, the winners need to be communicated through cross-silo meetings or staff facilitators, and there should be a process to test and roll out those winners. Firms with this capability have seen a big payoff. Remember that the iconic McDonald’s “I’m lovin it” came from Germany, Pantene’s “Hair So Healthy It Shines” came from Taiwan, and Nestlé’s ice cream snack Dibs came from the US.
Work in a common planning and information system. Both are the basis for communication while still allowing the silo units freedom to develop their true strategy.
Collaboration and communication, as opposed to competition and isolation is a good path to dealing with destructive silo problems and barriers that are non-threatening and thus avoids the risk of a burnout.
These five suggestions have all been shown to advance these objectives. Any others come to mind?
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