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driving the marketing agenda:

CEOs and CMOs share the same vision

but how do they make it a reality?

Never has there been more pressure on companies to grow revenues and profits.
But instead of the golden age of marketing one might expect, a recent survey of
chief marketing officers uncovered a series of pressing issues that marketers feel
are critical to overcome. First the good news: CEOs and CMOs agree that the
formula for success involves leading innovation, improving marketings alignment
with the rest of the organization, improving alignment with the business strategy
and marketing execution. Now the bad news: Both CEOs and CMOs agree that
marketing is not as effective as it can be. The turnover rate for CMOs remains at
an all-time high and organic growth seems elusive.

A 2006 Spencer Stuart survey of senior-level marketers asked why, regardless of

this shared vision between the CEO and the CMO, there is a continued disconnect
between marketing and the rest of the enterprise. What we found was a discrepancy between how well-connected CMOs view the marketing function versus the reality. And while the majority of CMOs cite external factors as the main obstacles to
connecting marketing, they readily admit to lacking the skills and competencies
strategic adviser, change agent, a better business understanding necessary to
earn credibility with the CEO and other senior-level executives.

To further explore this important topic, the fourth annual Spencer Stuart CMO
Summit examined how high-performance companies have successfully shifted the
CMOs role from purely driving marketing initiatives to driving marketing
throughout the enterprise. Hosted by Spencer Stuart, Advertising Age magazine
and the American Marketing Association, this years summit invited the following
executives to discuss how they made their shared vision of marketing a reality for
their organizations:

michele buck, senior vice president and CMO of the U.S. Commercial Group for
The Hershey Company

john fleming, executive vice president and CMO of Wal-Mart Stores

debra kelly-ennis, CMO of Diageo North America
rick lenny, chairman, president and CEO of The Hershey Company

david reibstein, the William Stuart Woodside Professor of Marketing at the Wharton
School and co-founder and managing director of CMO Partners, moderated the
afternoons discussion.

Who is responsible?
How much of the responsibility for marketing falls on the shoulders of the CMO and how much on
those of the CEO? The panelists unanimously agreed that CMOs ultimately are responsible for successfully driving marketing throughout the organization. However, this does not excuse the CEO
from being a visible supporter.
Rick Lenny, chairman, president and chief executive officer of The Hershey Company and a former
marketing executive, said: Until the CEO is a strong advocate for marketing and sees it as a source of
competitive advantage, marketing will never have a seat at the table. Moreover, the CEO cant invite
the CMO to the table then pull the chair out from under him or her.
One of the biggest challenges to getting CEO support is the top executives perceived positioning of
marketing. CEOs often tend to view marketing as a series of activities; rather, he or she needs to look
at marketing as an end-to-end way of helping the company win. With this mindset, CEOs are equipped
to make the necessary strategic decisions.
First, CEOs need to think carefully about who they choose for the role of CMO, said Lenny. Does
this person give marketing instant credibility or does he or she create a doubt in the minds of the
organization? Second, to whom does the position report? What are the resources and accountabilities
that are provided to this individual? Then, what are the critical success factors that will truly determine
how successful marketing will be?
And while the CEOs support is critical, it is only the beginning.
I can tell our entire organization that marketing is the strategic
thought leader of the company, but marketing has to back it up by
delivering, said Lenny. It is the CMOs credibility with the CEO,
the organization and the marketing team that will enable him or
her to effectively drive marketing throughout the enterprise.

Until the CEO is a strong advocate for

marketing and sees it as a source of competitive
advantage, marketing will never have a seat
at the table. Rick Lenny

Earning credibility
While the CEOs support is a critical component, marketings success rests with the CMO. Our panelists spent a great deal of time discussing how marketing must go about earning credibility throughout the organization and with the CEO.

Put the customer first

John Fleming, executive vice president and CMO of Wal-Mart Stores, said: At my first CMO conference, I was struck by how all the marketers in the room felt
that they either didnt have a seat at the table or that their
function was not respected within the organization. I thought
it was odd, as I was coming from a merchandising background and have always been a business driver. I think that
organizations that are truly focused on the customers
understand the importance of marketing as being the role
of the customer advocate.
Having spent his first 19 years in merchandising before
transitioning into marketing, Fleming brought a unique perspective to the discussion. As a mer-

At my first CMO conference, I was struck by

how all the marketers in the room felt that they
either didnt have a seat at the table or that
their function was not respected within the
organization. John Fleming

chant, you think about the products but

not specific customers, he said. I
focused on products when I was a merchant at Marshall Fields. Then, when I
went to walmart.com, I quickly couldnt
think about products any more because
online you get immediate feedback all
the time and you cant ignore your cus-

tomers. It is this background that gives me the credibility to go into Wal-Mart and put the customer
first in all decisions.

Demonstrate results
Marketers need to play a role in establishing the business strategy and the growth imperatives for the
company. Our moderator and the William Stuart Woodside Professor of Marketing at the Wharton
School, David Reibstein, asked if marketings lack of respect in the organization is related to its difficulty in being seen as a growth driver and proving its value. For many outside of this room, marketing is viewed as an expense and our inability to demonstrate in financial terms the long-term value of
marketing is only making this worse, Reibstein said.

Debra Kelly-Ennis, CMO of Diageo North America, said: We

spend a lot of our time looking at the key growth drivers of our
businesses. What we find again and again is that first-rate
marketing and brand building is not viewed as an expense, but
rather as an imperative to future growth. We must invest in our
brands to drive growth.
I wish that some of our competitors viewed marketing as an
expense, but they dont. At Hershey, we look at marketing through
the lens of brand growth, market share gains, profitability margins, etc. If you take this thinking down a couple of
levels, it really drives home the critical role that
marketing plays in delivering profitability and building shareholder value. We need to be thinking
about what it is that were spending this year to
build for years to come, and thats a hard thing to

If the companys marketing vision is

communicated consistently from the top
down, then theres a good chance that
the organization will align behind it.

measure, said Lenny.

Michele Buck

When spoken of as a spend, it is with the implication that marketing would drive results from that
spend, according to Fleming. But its not enough just to produce sales, its how customers think about
the experience, he added. Its about shifting and shining a light on the more important metrics, the
ones that ultimately gauge customer satisfaction and customer loyalty.
Michele Buck, senior vice president and CMO of the U.S. Commercial Group for The Hershey Company,
agreed: If you view marketing in strictly the functional sense, there tends to be this kind of squishy
halo that marketing is all about creativity. When you view it from a general management perspective,
marketing is what drives the marketplace and leads to revenue gains. You have to tie it to the metrics
that people can track so they can see and feel that youre driving the numbers and making an impact.
Bucks CEO, however, did not want to lose sight of an important point. Marketing is also about testing
ideas and thats where the mindset of expense is bad and cant be measured. It can, unfortunately,
become a point of friction in the company that CMOs and CEOs must manage, said Lenny.

Communicate the vision

Communication the ability to articulate the organizations vision for marketing is critical to overcoming this type of friction.
When Buck first joined Hershey, she was charged with helping to transition the company from a confections portfolio to a broader player in the snack world. I had to lay out the case for why this strategic

direction was important to the company this was how I built credibility for myself and for the
group. People needed to see where we were going and why, she said.
Buck further explained that communicating marketings agenda throughout the organization is not
dissimilar from change management. When looking at where to take the companys marketing
youre frequently looking at changing some existing procedures, strategies and capabilities which
is why marketers tend to be change agents. You have to find an equal balance between gaining internal alignment and then bringing your strategies and programs together to life externally with customers and consumers, she said.

Think like a marketer, act like a merchant

According to Fleming, merchants and marketers can learn from
one another. Merchants traditionally hate being questioned and,
as a result, are quick decision makers. Marketers, on the other
hand, need to get comfortable making decisions based on 80 percent of the data. The phrase Ive coined for my organization: We
need to think like marketers but act like merchants, he said.
Thats a huge change for marketers, who always want 99 percent
of the information. Putting the two together strategy and quick
reaction is the future for great retailers.
Marketers also need to know the ins and

We must invest in our brands to drive growth.

the outs of the business, just as mer-

Debra Kelly-Ennis

chants do. To build alignment and credibility within the company, you have to
spend the time to really understand the

issues facing your functional colleagues particularly your sales and supply organizations. If you
dont do that, not only will you not understand what marketing needs to accomplish, but you also will
not be able to build strong relationships with and support from other functions, said KellyEnnis.

Build an exceptional team

Successfully developing the next generation of marketing leaders is another key to marketings ability
to be seen as a credible business partner throughout the company, according to Kelly-Ennis.
Fleming said: For marketing to truly lead the organization and have it focus on the customer, I needed people around me that had deep marketing skills outstanding marketers from the consumer
packaged goods space, manufacturing and so on. They bring a lot of discipline, which allows me to

lead the charge from a merchandising perspective.

The CEO connection

While it was agreed that CMOs are responsible for successfully integrating marketing throughout the
enterprise, all of the panelists concurred that the relationship between the CMO and the CEO was critical to making this a reality. Going beyond having the CEO be merely a figurehead supporter of marketing, CMOs needed to make their strategic relationship with their CEO a priority.
When Kelly-Ennis joined Diageo, she built her relationship with the CEO by collaboratively working
with him on a vision for the North American brands and spending a lot of time talking through the
growth drivers of their brands. Our CEO brings a unique perspective on the challenges that were facing as we build our brands. Not only does he understand what my team does, but he is very supportive of the initiatives weve wanted to undertake and encourages us to build that broad cross-functional
support that is so critical to our success, she said.
Buck was in a similar situation when she joined Hershey. There are those CEOs who have deep marketing backgrounds and some who dont. It would be foolish of me not to leverage some of Ricks vast
marketing insights and expertise. If the companys marketing vision is communicated consistently
from the top down, then theres a good chance that the organization will align behind it.
When asked what advice he would give a new CMO, Lenny said: If you want a seat at the table, you
have to ask for it. And, then once youre there, you have to know what to do with it. CEOs and CMOs
can help each other by clearly articulating the expectations of the role and the critical success factors.

Going forward
In addition to discussing how CMOs and CEOs need to work together to integrate the marketing
agenda, the panelists discussed how marketing is changing and how these changes are impacting
the skills required of todays marketers.

Changing marketing models

When I look back at when I started in marketing, it was much simpler because there was one form of
media through which you could really reach most of the population, said Buck. Today, theres the fragmentation of audiences and changing demographics, coupled with emerging media, that are difficult to
track. Managing this whole new mix and optimizing our spending is now at the heart of what we do.
Kelly-Ennis added: The effects of globalization can be felt everywhere the world is a smaller space.
We also are facing consumers who are looking for more opportunities to experience premium, everyday
luxuries. The combination of these two factors has changed how we go about speaking to consumers
and making them life-long advocates of our brands.

The changing needs of the customer also are impacting Wal-Marts marketing strategy. The consumer is gaining more and more control and the Internet just took it to a whole other level. There
was a school of thought 20 years ago that you built the store in a way to get them through the whole
box to buy more stuff. That just doesnt happen any more. We can no longer push product; rather, we
have 130 million people in our stores every week and we have to figure out a way to give them what
they want. That fundamentally changes a lot of things, said Fleming.

Evolving marketing skills

We hear a lot of people talking about how marketing has changed. So, the next question begs, what
are the skills needed to manage this new reality? asked Reibstein.
According to the panelists, todays marketers need both a depth and breadth of skills. In the past,
CMOs came up purely through marketing. While marketing and sales experience is still crucial, companies are encouraging marketers to get a breadth of expertise, especially as it relates to innovation and
globalization. At Hershey, its no longer solely about depth, but about breadth as well, said Buck.
Diageo developed a program for its marketing professionals that covers all aspects of marketing. It
supports our need for both functional mastery and cross-functional expertise, said Kelly-Ennis. We
refer to it as the Diageo way of brand building.
Fleming recalled when a friend asked him why 80 percent of new products still fail, especially when
you think of all the tools we have today versus 20 years ago. I told him that CMOs have to feel comfortable and committed to spending time with the customers and ask the question What does it take
to win in your store? rather than say Heres our new product, said Fleming. This involves possessing a better understanding of customer marketing and spending time with the customer. Wal-Mart,
once known for being generalists in marketing, is now building specialized skills in the areas of customer knowledge.
Lenny agreed that having both breadth and depth in the marketing function was critical. The challenge, he said, is that there still is a legacy mindset that causes people to avoid horizontal moves.
However, those are great opportunities to learn and grow while helping the organization. The way to
get there is putting your best people in different positions. For example, we have a small part of our
business outside of the U.S., yet were starting to populate the international group with people who
are strong leaders and perceived as being critical to Hersheys long-term success, said Lenny.
Capitalizing on global talent also is imperative at Diageo, where its marketing professionals get constant direct exposure to the global marketplace. In North America, marketers are encouraged to
work in other countries and work with our global brand teams, said Kelly-Ennis.

Getting the right marketing talent

Reibstein concluded the afternoons discussion by stating that one of the most important enablers to the
success of marketing is its level of talent. He asked each panelist to describe how they develop and recruit
their marketing talent.
My No. 1 priority is building strong leadership capabilities and developing talent, said Kelly-Ennis. One
way we do this is by moving many of our high-performing people across the globe to other countries. As a
result, I have other parts of the world feeding into my talent pipeline and vice versa.
This development approach has reaped other benefits as well. At Diageo, weve seen a lot more diverse
thinking because there is significant interaction with global teams. Thats a great education tool to help
people in the U.S. understand the different behaviors, trends and taste preferences of other populations,
she said.
Hershey is focused on having the right balance of technical, general management and personal leadership skills. Its not enough
to be smart, added Buck. You have to be able to mobilize the
organization to make things happen to drive results.
Wal-Mart, which has had a reputation for being internally focused,
needed to encourage more diversity of thought, according to
Fleming. About a third of my time is spent on talent acquisition
because its that important, he said.
And then another big portion of my time
is spent on talent development, taking the
people who I know are in the organization
and getting them in the right jobs. It was
a huge weight off my shoulders when I
figured that out four to five years ago.

We hear a lot of people talking about how

marketing has changed. So, the next question
begs, what are the skills needed to manage this
new reality? David Reibstein

While the support of the CEO is imperative to marketings success, the responsibility for integrating marketing throughout the enterprise ultimately resides with the CMO. However, as both our panelists and
survey revealed, there are some best practices that CMOs should adopt and skills and competencies they
should develop in order to make their vision for marketing a reality.
CMOs have to look for those opportunities where they can make a difference and improve marketings
impact on the organization, said Lenny. They cant wait for the perfect opportunity. Marketers will have
to step up if they believe they deserve a seat at the table.

Spencer Stuart survey results

Survey results from nearly 300 senior-level marketing executives show that while CMOs and their
CEOs may share the same vision for marketing, respondents do not believe that CEOs are filtering
that support throughout the rest of the organization. As a result, the function is not seen as a strategic adviser to the CEO and, worse, is not properly aligned with the rest of the organization, according
to the recent Spencer Stuart survey.

How CEOs rated

Approximately 85 percent of respondents said it was either extremely critical or very critical for
CEOs to communicate with marketing. However, only half found that happening.
When asked how critical it is for a CEO to hold his or her direct reports accountable for ensuring they
partner with marketing, 78 percent ranked it as extremely critical or very critical. But, again, less than
half of CEOs appear to be doing so, according to the marketing respondents.
And when asked how important it was for their CEO to project an image of cohesive CEO and CMO
relations, nearly 80 percent felt it was either extremely or very critical. However, just 19 percent said
that CEOs were excellent at this and only 33 percent rated CEOs as good.

Obstacles to connecting marketing

Despite the poor showing for CEOs, lack of support from upper management only ranked sixth out
of seven obstacles to connecting marketing throughout the organization which was surprising.
The top three responses were too few resources (56 percent); shortage of good talent in the marketing group (29 percent); and lack of trust and credibility with the rest of the organization (28 percent).

Main obstacles to connecting marketing


Too few resources

Shortage of good talent in the marketing group

Lack of trust and credibility with the rest of the organization

Inability to communicate a clear, consistent message to the entire organization

Lack of innovation in finding new ways to better connect marketing

Lack of support from upper management

Marketing does not have a clear strategy platform to convey to the rest of the organization

Marketings responsibility
The CMOs themselves, however, also bear some of the blame. Respondents listed strategic vision
(62 percent); the influence to build relationships throughout the organization (44 percent); the ability
to act as a strategic adviser to the CEO (34 percent); and exceptional communication skills (31 percent) as the most important skills for a CMO. Yet, strategic adviser to the CEO was rated the skill
most lacking, with the ability to build relationships coming in fourth.

Ranking of top skills CMOs should possess


A strategic vision

Ability to build relationships throughout organization

Exceptional communication skills

Strategic adviser to CEO

Strong team player; collaboration

An innovator

Actively involved in upgrading level of marketing talent

Change agent

An understanding of business and financial management

... And the skills CMOs are most lacking


Strategic adviser to CEO

A strategic vision

Change agent

Ability to build relationships throughout organization

Actively involved in upgrading level of marketing talent

An understanding of business and financial management

Exceptional communication skills

An innovator

Strong team player; collaboration


About Spencer Stuart

Spencer Stuart is one of the worlds leading executive search consulting firms. Privately held since 1956, Spencer
Stuart applies its extensive knowledge of industries, functions and talent to advise select clients ranging from
major multinationals to emerging companies to nonprofit organizations and address their leadership requirements. Through 50 offices in more than 25 countries and a broad range of practice groups, Spencer Stuart consultants focus on senior-level executive search, board director appointments, succession planning and in-depth
senior executive management assessments.

About the American Marketing Association

The American Marketing Association (AMA) is the largest marketing association in North America. It is a professional association for individuals and organizations involved in the practice, teaching and study of marketing
worldwide. It is also the source that marketers turn to every day for professional development, information and
networking. AMA members are connected to a network of experienced marketers nearly 40,000 strong and include
leading marketing professionals and academics from every industry. The AMA is information, ideas and insight
that marketers can use daily, along with the knowledge to help them grow in their careers. AMAs principal roles
are to advance marketing practice, be an advocate for marketing and act as an essential resource for marketing
information, education and training. For over six decades, the AMA has been the source that marketers turn to

About Advertising Age

For 75 years, Advertising Age and The Ad Age Group have been on the cutting edge in delivering news and trends
on marketing, advertising and media, generating in excess of 1,400,000 weekly impressions among key industry
professionals through its numerous media properties. Always adapting to the evolving needs of its readers, The
Ad Age Group continues to raise the bar on how the industry and the most important trends are covered through
web sites, e-newsletters, blogs, podcasts and videos. The Ad Age Group properties include Advertising Age (print
and digital editions), Advertising Age Online (www.adage.com), Point, Creativity, Creativitys AdCritic (www.adcritic.com), Madison+Vine (www.madisonandvine.com), American Demographics, Ad Age China (china.adage.com),
e-newsletters, custom publishing and events.

* Photos courtesy of the American Marketing Association.

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2006 Spencer Stuart.

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