The Five Roles of the CMO

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Marketing
Book Excerpt

According to David Aaker, today's CMO may wear up to five potential hats: facilitator, consultant, service provider, strategic partner, strategic captain. "The CMO and the central marketing group can assume a spectrum of roles," says Aaker, author of Spanning Silos: The New CMO Imperative. "The roles of the CMO can and often will vary with the activity and the silo, and additionally, will evolve over time." In this excerpt from Spanning Silos, Aaker discuss those five roles and what impact they potentially can make in an organization:

The CMO team can assume one or more of several prototypical management roles-facilitator, consultant, service provider, strategic partner, and strategic captain-that reflect differing levels of influence and authority.

Facilitator
The facilitator role, the least threatening to a decentralized organization, enables business units to develop marketing strategies without the CMO team's active participation and involves tasks such as:

  • Establishing a common planning framework that provides vocabulary and discipline to the planning process
  • Encouraging and enabling the business units to collaborate through teams and other organizational structure devices
  • Fostering communication through such devices as networks, meetings, events, and Intranet sites
  • Creating data and knowledge hubs, some based on original marketing research, that all silos can use
  • Upgrading the level of marketing, brand sophistication, and performance measurement

None of these tasks involve the CMO team in the strategy development and implementation of the silo businesses. The silo marketing groups remain largely unconstrained.

The facilitator, an alternative to prematurely attempting to control the silos that will resent an "outsider," can stimulate change that is likely to be tolerated. The influence that a carefully conceived and implemented facilitator role-with the CEO's support-can have on silo decisions and performance can be surprising. Setting up formal and informal cross-silo communication channels and establishing a common planning framework and knowledge base can encourage synergy to emerge. When silo representatives start exchanging experiences, joint programs and other coordinated efforts will ensue. In addition, a successful facilitator role can lead to building credibility and relationships that will be the key to the establishment of more influential roles. Sometimes this growth in influence can occur rapidly, but in some organizations it can take five, ten, or more years for enablers of change to move into place. Organizations with strong cultures, structures, and processes do not change easily.

A facilitator can reduce the risk of an early flameout. The CMO who assumes the management responsibility of important brand-building programs such as advertising, sponsorships, and digital strategies must perform with little margin of error-only home runs will do. The silos will exploit the first sign of a misstep to reinforce their authority and autonomy.

Consultant
In the CMO's second potential role, as consultant, the CMO team advises the silos in developing and executing marketing strategy by:

  • Participating in, if not leading, the analysis of each silo business's markets, competitors, and customers
  • Contributing to the generation of companywide insights
  • Suggesting strategic options and marketing programs to the silo marketing groups
  • Refining those options and responsive programs

The CMO's team would thus become an active-but invited-partner with the silo marketing teams.

The CMO team would add value from at least two perspectives. First, they would bring to the table expertise and experience in functional areas of marketing such as brand strategy, advertising, Internet marketing, and sponsorships. Second, they would bring a cross-silo perspective from being involved in multiple silos and from having a cross-silo perspective in their information gathering and research.

While the CMO team can recommend and even initiate brand strategy options, control remains in silo business units. The team's efforts to affect brand strategy depend on its insights and suggestions. It is an influence rather than a control model.

With a consultant model, the credibility, competence, and track record of the CMO team become critical. The CMO at 3M was one of many who indicated that the consultants need to be so respected that the silo units will ask, even demand, their participation in the relevant silo work sessions. First, impressions matter. If the initial contact of the consultants from the CMO team does not impress the silo executives, the experience is likely to revitalize a "go it alone" or even antagonistic attitude. Further, a bad experience will affect the inclinations of other silos to seek consulting help as will a positive one of course. The role of consultant can build on the facilitator role. 3M viewed its CMO team as primarily filling the facilitator and consulting roles.

Service Provider
The third potential role, service provider, involves the silo business units' "hiring" the CMO's team to provide such marketing services as consumer research, segmentation studies, employee training, managing sponsorships or promotions, and selecting and managing third-party suppliers. For some firms such as Clorox, with dozens of major brands, the CMO team considered the service provider role to be its dominant role in the firm.

As a service provider, the CMO team gets involved indirectly in developing marketing strategy and creating marketing programs. By conducting segmentation studies for a silo, for example, the CMO's group can guide that silo in interpreting the results and developing the segmentation strategy crucial to marketing execution and can share findings across business units, thereby fueling joint participation in program development.

A service provider role can influence and even implement strategy. The central marketing group at Carlson Hotels Worldwide (running five brands, including Radisson and Regent), trains employees on how to interact with customers, a key element to its business and brand strategy. They also provide examples of visual presentation of the brand and advertisements for the several silos to use. The silos, in this case, the hotels' autonomous franchisees have an economic incentive to use what has been developed rather than pay for an outside alternative.

Owning the relationship with the communication suppliers, especially advertising agencies, yields influence. A practical and symbolic locus of control changes when a single agency replaces multiple agencies, each owned by a silo or a group of silos. Many firms including IBM, Samsung, and Dell have consolidated agencies. As a result, a key organizational support for silo autonomy, control of its own agency, disappears.

One potential problem with the service provider role is that too often, silos tend to use the CMO teams for tactical programs and neglect to get support for strategic issues. As a result, strategic decisions are treated superficially or even ignored. Silos at Logitech, for example, looked to central marketing for testing products and programs rather than for performing research on customers and market behavior that could have led to strategic options.

The CMO team needs to exhibit a high level of competence within their service arenas and making that competence credible and visible. That means talented people, success stories, the creation of centers of excellence around functional areas like Internet marketing and sponsorships, all of which will be described in the next few chapters. Like the consultant role, the service provider role should aim to be considered a valued contributor to the silo team. BP, for example, created a segmentation strategy for one silo on the basis of quantitative research that was so successful that it was a key part of its go-to-market strategies. The other silos, observing the results, were waiting in line to have the same service. Success breeds credibility.

The risk of the facilitator, consultant, and service provide roles is that they do not necessarily create change as forcefully and as fast as is needed. The silo groups can successfully resist their initiatives and see their efforts as nothing more than another variant of "business as usual." The result can be the perception and reality of little impact. Thus, in some cases it is necessary to turn to more active roles such as that of a strategic partner.

Strategic Partner
In the fourth potential role, strategic partner, the CMO will always have a seat-invited or not-at the silo strategy table. The responsibility of creating and applying a marketing and branding strategy is jointly assigned. That means a team approach with collaboration. Usually, both the CMO and the silo must agree on the strategy, approve the measure of its success, engage in its implementation, and review it over time.

The locus of power and responsibility for generating strategies and implementing them might tip to one side or the other. At one extreme, the CMO may simply have approval rights and become more an adviser than a participant. With approval rights, the CMO team could make sure that the silos aligned their marketing programs with the strategy, compromised no brands, exploited potential synergies, and allocated resources according to the firmwide strategy. For many firms, the CMO team has approval authority over at least some aspects of advertising created by silos-it can make sure, for example, that the look and feel as well as the message fits the global brand strategy. Conversely, the silo team could have veto power over a CMO-driven marketing program. For example, the CMO team could put forward a set of programs including some advertisements and programs surrounding a global sponsorship, and the silo marketing groups would be free to use, adapt, or not use them.

The competence level and the underlying silo market knowledge of the CMO teams needs to be even at a higher level in the strategic partnership role than in the consultant or service provider role. And the collaboration chemistry also needs to be high. It will not work when confrontation replaces collaboration.

Strategic Captain
In the fifth potential role, strategic captain, the CMO team conceives, selects, and manages the marketing strategy and programs. It interprets trends and provides insights into customer and competitor dynamics. With information about new product flow and corporate strategy, the CMO team develops marketing and branding strategies and even marketing programs for silo markets. With credible brand and marketing knowledge, authority, and resources, they would actively manage the silo marketing managers whose primary job would be to adapt and implement.

The strategic captain model succeeds only when the CMO team has the highest level of competence and credibility and when the company's CEO places a priority on marketing synergy and branding consistency, provides the CMO with resources, and visibly backs the CMO's authority.

One determinant of authority over silos is the control over the marketing budget. How much of the marketing budget falls under the CMO's charge? What elements, if any, of the budget will be under the auspices of the silo teams? In the strategic partner role, the CMO may have a significant central marketing budget and recommend budget allocation across silos. However, as a strategic captain, the CMO is likely to have greater influence if not control of the bulk of the marketing budget, its allocation, and its use. At health insurer CIGNA, only 15 percent of the marketing budget is controlled by the silos. Authority becomes somewhat irrelevant without resources.

Another key determinant of authority is the reporting arrangement. The CMO, as a strategic captain, nearly always reports to the CEO or perhaps the chief operating officer (COO). However, as a facilitator or a service provider, the CMO often reports to the chief financial officer (CFO) or the head of human resources. When seasoned CMOs were hired as change agents at both Visa and Allstate, a condition was that the post reported to the CEO and was a part of the executive team.

The CMO must play the strategic captain with sensitivity even when sufficient authority, talent, and resources are in place. Toward that end, the CMO team should listen to and work with the silo teams and explain the rationale behind the marketing and branding strategy. The CMO can even position the "logo cop" function, often viewed as bureaucratic and negative, as valuable in providing early-stage advice and communicating clear guidelines. When the logo cop function became too negative at Honda, it was transferred to the intellectual property group so that the CMO team could have a more positive relationship with the silo units.

Clearly, these five roles are not necessarily mutually exclusive. In most cases, they are cumulative. So service providers also facilitate and consult. And those classified as strategic captains will very likely take on many of the other roles as well.

EXPERT OPINION
EXPERT OPINION