Coca-Cola has decided to eliminate the position of CMO in its organization. Former CMO Marcos de Quinto is off to retirement after nearly four decades with the company; instead of replacing him, Coke has created a chief growth officer role to lead both its customer and its commercial teams.
The CGO role will be held by Francisco Crespo, and it was created, according to Coca-Cola, as part of a restructuring, to turn the company into a “growth-oriented and consumer-centered” organization.
Although Coke hasn’t explicitly blamed its former CMO for falling revenues (global sales fell from $ 48 billion in 2012 to $ 44.3 billion in 2016), we can surmise that the management shakeup was in part driven by declining revenues.
Here’s what all marketers can learn from this shakeup.
1. Now is not the time to get comfortable
Coke isn’t the only example of an organization looking to put Marketing on the chopping block. Some 30% of CEOs might fire their CMO in 2017, according to Forrester Research, for lacking the skills necessary to pull off digital business transformation.
The average tenure of CMOs in the US is now 4.1 years—half the average tenure of CEOs, and the shortest in the C-suite.
What’s more, CMOs are first in the firing line if business growth targets are not met (followed closely by chief sales officers and chief strategy officers), an Accenture Strategy Study found.
2. Your investments are under greater scrutiny
There is a glimmer of hope in the midst of this turmoil: Marketing budgets are on the rise, up for three consecutive years, and climbing to up to 12% of company revenue, Gartner found. That budget, however, within the context of today’s business pressures, signifies a large amount of trust in marketing leadership to drive tangible business results.
Full 80% of all B2B marketers are now tasked with driving revenue, yet barely one-third can demonstrate any credible financial results, according to Debbie Qaqish of the Pedowitz Group. Our own research at Allocadia found that only 21% of companies are able to fully measure Marketing’s contribution to revenue.
And that is the crux of the problem: If CMOs cannot translate the role of Marketing into the only language that truly matters to the business—money and growth—we marketers cannot expect job security, respect, control, or confidence.
3. You’re tasked with changing the perception of your role
As part of our ongoing work with marketing performance management, we are seeing across-the-board echoes the decision-making at Coke: Marketers are working to change the perception of their departments as cost-centers, to advance a perception of Marketing as growth-driver instead.
This is a new charter for CMOs, and it has the potential to help them earn a more strategic role within the company to make boarder, more disruptive decisions. But, to meet the demands of this charter, marketers must bridge the visibility gap between the activity they’re generating and the returns they’re driving.
In many ways, it’s a matter of understanding both the “R” and the “I” of ROI: CMOs must be stewards of their investment and speak with confidence on the impact each dollar has—or could have. In short, they must run Marketing like a business.
4. It’s time to run the business of marketing
The ability to operate a marketing department with a business owner’s mindset can save a CMO from fading into futility. In fact, I’m willing to bet it’s this shift that will save the profession as a whole.
A strict discipline is required behind the scenes within a marketing organization—behind the campaign, the creative, and the customer-facing tactics. This discipline focuses on a clear line of sight into all marketing investments, a unified approach to marketing planning, and tight, accurate, actionable measurements.
Without this discipline, and with too much focus on execution, Marketing becomes decentralized and disjointed, rendering it ineffective and leading it toward the chopping block.
Allison Snow, senior analyst at Forrester, describes the road ahead in her report titled ” Measuring Isn’t Managing: The New Rules of Marketing Performance Orchestration.” She writes: “B2B marketers who don’t opt in to revenue relevance will continue to build plans on ‘what we did last year’ rather than what has consistently demonstrated value to core, defined, and agreed-upon business targets.”
5. Marketing operations has never been as important as it is now
Today, in this new context, CMOs are more dependent than ever before on critical members of their teams: those tasked with marketing operations and revenue operations.
The practice of managing budgets, tracking investments, and tying activity back to revenue is one of process, data, and technology. This highly strategic role falls squarely onto a marketing operations practitioner who is in close alignment with Marketing leadership, and focuses on three distinct areas: a go-to-market plan, investment management, and targets.
Each of the three functions must be aligned across the revenue teams, as well as up and down the rest of the organization:
- Go-to-market plan: What are our goals, and what will we do to accomplish them?
- Investment management: How are we going to spend our money to reach the goals set out in our plan?
- Targets: What results must we drive (and measure) to assure we are on track to beat market expectations?
Revenue operations is used to evaluate the impact of Marketing and Sales, in turn enabling a CMO to understand ROI and translate the story of performance in terms of business results.
When a CMO is equipped to run the business of marketing, that CMO can make confident investment decisions that drive growth—the ultimate responsibility of every CMO. Coca Cola is no exception.