CEOs who place marketing at the core of their growth strategies are twice as likely as their peers to have greater than 5 percent annual growth, according to a recent survey McKinsey conducted with input from the Association of National Advertisers (ANA). CEOs and chief marketing officers (CMOs) must work together closely for any marketing plan to flourish. On this episode of The McKinsey Podcast, McKinsey partner Robert Tas joins editorial director Roberta Fusaro to discuss how to nurture the CEO–CMO relationship.
Our second segment features an excerpt from our Author Talks series, with author Karin M. Reed. She wrote Suddenly Virtual: Making Remote Meetings Work (Wiley, March 2021) and shares tips on how to create the perfect virtual meeting.
This transcript has been edited for clarity and length.
The McKinsey Podcast is hosted by Roberta Fusaro and Lucia Rahilly.
A closer look at CEOs and CMOs
Roberta Fusaro: McKinsey did some research looking at the relationship between CEOs and CMOs. Why did the research focus on this particular C-suite relationship?
Robert Tas: Whenever you have a CEO coordinating the strategy of a business, it’s foundational for its functional leaders to have a seat at the table. We spent a lot of time trying to understand what the issues were in the relationship between CEO and CMO.
Roberta Fusaro: What sort of value do CEOs place on marketing in general?
Robert Tas: It’s interesting. The companies that are doing it right are two times more likely than their peers to have greater than 5 percent annual growth. But there are many challenges that CEOs and CMOs face. They have fallen into a few buckets.
The first one is the ability to define the role of marketing within one’s strategy. The second is understanding the levers of modern marketing capabilities. And the third is an age-old problem: how do we measure impact? How do we tie our marketing activities to business outcomes?
Roberta Fusaro: Do CEOs and CMOs tend to have the same vision for the role that marketing should play in the company?
Robert Tas: Unfortunately, according to the research, 90 percent of CEOs think they know the benefits of marketing. However, only 50 percent of CMOs see the same connection. So that means almost half of CMOs have a different view on the marketing priorities of the organization.
Ninety percent of CEOs think they know the benefits of marketing. However, only 50 percent of CMOs see the same connection.
Roberta Fusaro: In the companies you researched, how defined is the C-level marketing role?
Robert Tas: Across the industry, there are lots of titles and changes in the definition of marketing. We’ve seen new roles such as the chief growth officer, chief digital officer, and chief customer officer. The traditional four Ps of marketing have been fragmented across multiple roles in the organization, which creates a challenge.
Roberta Fusaro: Robert, can you remind us what the four Ps are again?
Robert Tas: The standard Procter & Gamble definition is product, price, place, and promotion. The four Ps have been moved into different parts of the organization. Even though some of this is good, you still need that aggregator, that chief customer advocate across the organization, to make sure the four Ps are working together synergistically.
When we also looked at the official executive job class for CMO, we saw that less than 40 percent of Fortune 500 companies have a CMO or even a customer officer at the C-suite table. That’s a worrying sign.
This is not your father’s marketing organization
Roberta Fusaro: There’s the evolution of roles, but there’s this evolution of technology that gives CMOs access to lots more data. Our survey revealed that there’s a disconnect between data analytics and business impact. So where’s the disconnect coming from?
Robert Tas: Well, the CEO has less of a marketing pedigree than ever before. It’s estimated that only 10 percent of Fortune 250 CEOs have marketing experience. There’s also a dramatic acceleration of digital technology in the world of marketing.
We’re no longer judging marketing by television commercials. There’s a whole slew of different components to think through. And the data piece that you hinted at is that these customers’ signals are now everywhere. It’s incumbent upon us as marketers to interpret them and feed them back to our organizations in such a way that we don’t talk about data but we talk about insights and are able to connect the dots.
We need to reimagine how we engage with customers on all platforms, including YouTube, TikTok, X, and Meta. And that means learning. You’ve got to become data curious. You’ve got to be somebody who’s always looking to figure out how to serve that customer better and better.
We need to reimagine how we engage with customers on all platforms, including YouTube, TikTok, X, and Meta. And that means learning. You’ve got to become data curious.
As we come up with a means to measure marketing, the CEO or CFO needs to learn the measurement systems in place to understand what it means when I cut budget, what it means when I invest in it, and how we tie those activities to outcomes. That robust measurement system can help you understand your brand, how your customers perceive your brand, and what level of fidelity they give you credit for.
That’s where the brand scores are really helpful. But you also need an econometric model to connect how the money you’re spending on different channels such as video, content, and search—all working in tandem—helps create the results you want. And then you have to test, test, test—that is, incremental, meaningful testing and holdouts to see whether your marketing is leading to desired outcomes.
A holistic marketing approach
Roberta Fusaro: There’s probably also this sense that even if you’ve mastered one technology or approach, there’s just another one on its heels and you must keep up.
Robert Tas: That’s a fabulous point. Lots of companies choose the promotion lever, but the true marketers who do all of the levers together make really good choices as to how to use the top ones for their customers, to bring their brand propositions to life and drive sustainable business and margin impact.
Roberta Fusaro: How are CMOs starting to use data differently?
Robert Tas: The promise of one-to-one marketing on the internet is not new. It’s been around for over 25 years now. But you’re seeing brands that are using personalization and AI technology to help make sure the right message reaches the right person at the right time.
If I’m in the cosmetics business, such as Sephora, I am now being targeted based on my preferences. Sephora knows what I like, what color hair I have, how I engage with that brand, and the best way to communicate with me. Personalization technology is changing the way we engage customers across the full journey.
CMOs need a seat in the strategy-planning room
Roberta Fusaro: Looking back at the data in the report, how often are CMOs included in C-suite decision making?
Robert Tas: Sadly, not enough. One of the troubling things we saw was that CMOs were being moved to executors of the strategy rather than being the ones to help create the strategy. In order to make it work really well, there needs to be a balance: CMOs need to be at the table doing both. They need to have a voice in shaping strategy. This is a great example where you can clearly see that the CEO and CMO are locked into propelling the business and delivering those marketing activities that produce the outcomes that everybody can understand and relate to.
One of the troubling things we saw was that CMOs were being moved to executors of the strategy rather than being the ones to help create the strategy.
Roberta Fusaro: The research lays out a blueprint for how to bring CEOs and CMOs closer. CEOs need to define the role of the CMO as a growth unifier. Can you describe what that means, based on company needs? What does it mean to be a growth unifier if you’re the typical CMO?
Robert Tas: This is my favorite one, because this is what every company needs. It needs an executive to remove friction for customers. We have to stop operating like our org chart. We need to operate how the customer wants us to. I view the CMO as the chief customer advocate, because that person’s role is to go across the company to advocate, to make it easier for the customer to do business with the company.
The CMO is the person who’s using customer insights. They’re fighting for the different segments the company might support, because they realize not all customers are the same. They understand how to serve their customers efficiently and elegantly across the company’s products and channels—such as affiliates, search engines, retail, customer service, and social media marketing—to capture customer demand. This is foundational to any successful business.
Roberta Fusaro: How comfortable do you think CMOs are with contextualizing themselves or thinking of themselves as growth unifiers?
Robert Tas: The good news is that some of them are very comfortable. And you can see that in the way they operate, the way they navigate the entire C-suite, the way they advocate for the customer, the way they use data, and the way they use new technology.
The essential message that I tell all CMOs is they need to take the business strategy, fit it with their customers’ needs, and then put the two together.
The final thing, and this is probably the most important piece, is they need to be accountable for real business outcomes and be able to connect the dots.
Roberta Fusaro: How can the CMO help bring the CEO up to marketing speed without stepping on toes?
Robert Tas: This is one of those behaviors that we see the great ones do. This is the exercise of taking your CEO, your C-suite, and introducing them to the innovation that’s rapidly changing our world. I have great examples of CMOs taking their entire executive team to the Consumer Electronics Show or to Silicon Valley to expose them to companies that are doing it right and exhibiting to their leadership team the art of the possible. It’s an ongoing effort. The great ones are always looking for ways to learn, and they’re just curious by nature.
The CMO’s struggle
Roberta Fusaro: What was the most surprising finding from the report for you?
Robert Tas: I’m a marketing operator at heart. I’ve been a chief growth officer, a CMO, and sat in the chair. It was hard to hear the disconnect. It was hard to hear that my bosses didn’t understand and didn’t recognize the priority of marketing as I did as CMO.
That was stunning to me. It was the same with my CFO, which was another thing we saw in the report that is a great best practice. When we see the finance team buying into the marketing measurement system, it works really well. We talk to CMOs a lot about making the CFO your BFF. We still have work to do to get there.
Roberta Fusaro: How has marketing itself changed over the past 20 years?
Robert Tas: Marketing has changed so dramatically over the last ten, 15 years. Everybody thinks back to the Mad Men era, when all we needed was a television commercial and three networks that reached almost all of the United States.
We no longer live in that world. We now have these amazing little devices in our pockets that are always on and always in our possession.
There are two things that are just going to be realities. One is that marketing is ever-changing. It’s not going to be like, “Oh, you got it now and we’re done.”
This adds a new level of fidelity that marketers and companies need to meet. This means they need to continually test. They need to learn what works for them and their customers.
My wife and I shop very differently, for example. She loves information. She wants to see the reviews. She wants to go to a website ten, 15 times before she buys. I just want to press that checkout button and have that item show up the next day. The beauty of marketing today is it can serve all kinds of shoppers really well.
We’ve seen studies and McKinsey’s done some in the past that show, especially in hard times, marketing is the first thing to get cut.
But the companies that actually invest in marketing are the ones that pull ahead of the pack. After a marketing downturn, two or three years later, we see they’re the ones that are accelerating, because they have invested and unlocked that growth lever within their organizations.
You cannot be that black box anymore. We need to be able to transparently demonstrate how it works and how a dollar spent here equals value there. I know the crutch is immediate short-term focus on that dollar, but understanding how the dollars, over time, all work together to create sustainable, profitable, and impactful results is really critical to getting that C-suite on the same page.
Roberta Fusaro: Robert, thank you for joining us on the podcast today.
Robert Tas: Thank you for having me.
Lucia Rahilly: Next up, author Karin M. Reed offers some ideas on how to make the most out of your remote meetings.
Karin M. Reed: There are a lot of best practices for making meetings effective that are not commonly used. Bad habits are exacerbated in a virtual setting. A lot of times, video calls don’t need to happen if they’re simply a matter of checking a point. There’s this overwhelming use of video meetings as the default. This is what’s leading to Zoom fatigue.
What we have found is that the most effective virtual meetings are those that are shorter and purposeful. Rather than having an agenda of ten items, think about cutting it down to two. And maybe have a 20-minute meeting as opposed to a two-hour one, because you really have to understand the limits of endurance and attention span.
First of all, consider whether it should be a video call at all. If the answer is yes, then make sure you put it within the proper time frame. Don’t let your calendar decide by default how long your meeting is going to be. If you can get the business done in 20 minutes, schedule a 20-minute call, because a lot of times we have these back-to-back-to-back video meetings and there’s no time left to actually get the work done or to have that moment of task switching when you download what just happened and then prepare for the next call.
It’s also important to determine who should be in the meeting. The sweet spot for any productive discussion is five to seven people. If you have more than seven people in a virtual meeting and you’re trying to have a productive dialogue, it’s very unwieldy.
All trends indicate that we will be in a hybrid work situation for the foreseeable future. You have to be able to figure out how to handle a hybrid meeting, where you have three people in a colocated conference room and then five people who are joining on individual webcams. The challenge for the meeting leader is to figure out how to get everybody to talk to each other, not just to their own particular networks. So there’s a big burden upon the meeting leader to get even participation across the board. You might consider including an extra role of “facilitator”—somebody who does not have a stake in the outcome of the meeting, who can simply ensure that everybody’s voice is heard.
Proactive facilitation is critical in any virtual meeting. There’s a lot of stilted and stunted conversation, because people don’t know when it’s their turn to talk. You can look for nonverbal cues that might indicate that somebody has something to say. If somebody leans toward the camera, for instance, that’s usually an indication that they have something they want to add.
It can be really daunting to get the gumption to speak up. Other folks might find it much more effective and easier for them to put their participation in the form of text. The chat function can lead to better participation across the board. The challenge is for the leader to take a look at that chat and be able to incorporate that into the verbal conversation that’s going on as well.
A lot of people have been relying on gut feel, but we are in an age of data when you have a lot of data points that leaders can use to make better-informed decisions.
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