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In early March, McDonald’s former chief branding officer Steve Easterbrook took over as CEO. Facing its biggest sales slump in more than a decade, it’s not surprising that the fast-food giant is looking to its marketing executive to engineer a corporate turnaround.
But Easterbrook is just the latest marketer to take charge of a major company in recent years. Campbell’s Soup awarded Denise Morrison, its former chief customer officer, the title of chief executive in 2011. In 2012, Mercedes-Benz USA tapped vice president of marketing Stephen Cannon for its top executive spot, while rival Audi USA promoted CMO Scott Keogh to CEO. The next year, Gilt Groupe recruited Citigroup CMO Michelle Peuso to lead the online retailer, Radio Shack brought on Walgreen’s marketing executive Joseph C. Magnacca to head the company, and former director of marketing operations Ben van Beurden took the helm at Royal Dutch Shell.
“It isn’t just that marketers are taking on CEO positions,” said Dr. Kimberly A. Whitler, assistant professor at the Darden School of Business (UVA) and a former CMO. “It’s that they are taking on high-profile CEO positions.”
As corporations across industries focus on digital transformation, top-line growth, and customer experience, marketing executives have become increasingly attractive candidates for CEO positions.
“CMOs are being charged with driving organizational transformation and creating results. They’re reinventing business models and creating new go-to-market strategies. They’re tasked with the strategic agenda to drive value for the business and its shareholders,” said Caren Fleit, senior client partner and leader of the Global Marketing Center Of Expertise at Korn Ferry. “Aligning teams, marshaling resources, and driving change to achieve the objectives of an organization — that’s exactly what a CEO does.”
In fact, 53% of business executives polled by Korn Ferry said that their current CMO could one day become CEO. “The role of the CMO has changed dramatically in recent years, and this new breed of CMO is being shortlisted for the top spot,” said David Shrank, principal with Deloitte Consulting. “I would argue that the trend is still in its early stage, but as the CMO continues to own the customer across all channels — as well as the data that drives the business — the CMO quickly becomes a logical person to own the company’s growth agenda in the CEO role.”
The increasing value of the CMO skill set
Historically, consumer product companies have looked to the marketing executive ranks for corporate leadership. “However, as digital has reshaped the landscape, there are very few industries not feeling some type of disruption, driven largely by consumers and business customers who demand more responsive, customized, or personalized experience,” said Shrank. “Many industries will increasingly see the CMO as an attractive CEO candidate, and it goes well beyond digital marketing and advertising. This is about enabling every customer touch point in every channel and delivering on the brand promise.”
There is no corporate leader more connected to the marketplace than the CMO, according to Whitler. So as more companies become market-driven, it’s only natural for companies to seek skills in a CEO that CMOs possess.
Indeed, marketers tend to have extensive experience collaborating across functions, both inside and outside the company. “One of the key skills of marketers is their people management skills,” said Thomas Yang, partner at consultancy Prime Genesis. “They must have the skills to work with, motivate, lead and communicate with the creative types to systems types to data and numbers-driven types.”
That’s key because CEOs are, at best, great conductors. “They must be able to pick incredibly good people. They must be very, very good at hiring right … because their success will hinge first on their people,” said executive recruiter Nick Corcodilos.
A marketing executive often also has change management expertise, which is critical for companies seeking enterprise transformation. “CMOs are often change agents,” said Whitler. “When firms need a CEO who understands how to position the firm to succeed in the broader marketplace, who can create a vision and plan to deliver on that positioning, and who can understand, appreciate, and influence others within the firm, the CMO position is a perfect training ground.”
CMO might be the perfect choice for organizations seeking top-line growth as well. “Who is better able to drive growth in a competitive marketplace?” Whitler said. “The strategic part of the CEO’s job is to point the company in a direction, to determine the ‘position’ that the company will occupy. This is what marketers do best. And this is why their skills at the CEO level are in high demand.”
For operationally-focused companies that want to move beyond cost-cutting, a CMO can bring a new lens through which to formulate a strategic direction: the customer point of view.
“Transforming a company or reversing slumping sales requires what I call ‘journey thinking’ — the act of looking at your entire company from the mind-set of your customers and understanding each of these unique customer journeys in ways that allow you to make the most of every touch point,” Shrank said. “In a perfect world, the journey is an ongoing cycle of ever-improving customer interactions that results in a positive and usually profitable relationship.”
Beyond the brand
When Mozilla appointed its former CMO Chris Beard to the CEO position, the company’s chairwoman Mitchell Baker cited the marketer’s clear strategic vision for turning a corporate mission into “programs and activities and product ideas” as the reason.
Indeed, to succeed in the top corporate spot, marketers have to be expert strategists. “A pure branding officer is probably not the marketer that’s going to become a CEO,” said Fleit. “However, more and more marketers are becoming true commercial business executives whose focus is on creating a vision.”
To be successful as CEOs, CMOs must also be able to execute on that vision. “One of the biggest challenges any CEO has is planning the business of the future while operating the business of today, which is why operational experience is so important,” Shrank said. “To really make the jump from CMO to CEO, executives must be able to embrace things like execution, implementation, and operations at once.”
Those abilities, in fact, trump the unique characteristics marketers bring with them as they rise to the top. “I don’t think it’s ‘CMO-ness’ that makes a good CEO. It’s not the ‘M’ in CMO that matters most. I think it’s how good a chief you are,” said Corcodilos. “I think a CMO who has ‘CEO-ness’ is who’s going to succeed.”
Indeed, the three qualities associated with CMOs who have the potential to become CEO were being results-oriented, having business acumen, and possessing ability for strategic planning, according to the Korn Ferry survey. To ascend to CEO, “a CMO need to show passion for wider aspect of the business, not just marketing and branding,” said Yang. “He or she needs to demonstrate understanding of the operational and financial side of the business. He or should be a business mind rather than just a marketing-siloed mind.”
In many cases, marketing executives will have sought out experiences in other functions of the business before being tapped for the highest position in the company.
“If someone’s been only in a CMO role at the C-level, I don’t think there’s enough executive acumen for success,” Corcodilos said. “A CMO who has experienced other kinds of C-level challenges would probably make the best CEO candidate. Perhaps he or she has headed up IT or finance and has a strategic grasp of where the company has been and where it’s going.”
Such was the case for McDonald’s Easterbrook, who started out in finance at McDonald’s and cycled through various restaurant and operational roles. He left the company to become CEO of PizzaExpress and Wagamama Ltd. before returning to the company to become its chief branding officer.
Similarly, before becoming CEO of Campbell’s Soup, Morrison served as president of Campbell USA, chief operating officer, and board member. Before coming to Campbell’s, she was executive vice president and general manager of Kraft Foods’ Snacks and Confections divisions, and held senior leadership roles at Nabisco, Nestle, and Pepsi-Cola.
Short of functional rotations, CMOs seeking to ascend to chief executive can stretch themselves within the marketing function. “Taking ownership of strategy and innovation, and driving the growth agenda, which can position the CMO for the CEO seat,” Shrank said. “Leading internal digital transformation initiatives and integrating innovation across functional areas are some ways to expand their skills to reach the top of the C-suite.”
As technology takes center stage, partnering with technology peers will better enable marketing executives to take the reins at an increasingly digital enterprise. “This collaboration can further extend the CMOs skill set and preparedness to lead the future customer-centric organization,” Shrank said. “This will likely only increase in importance as the digital environment continues to take over as the primary customer experience.”
Of course, CMO will certainly encounter issues as a CEO for which there is no way to prepare.
“Any time someone from a functional role ascends to the leadership role, they’re going to have some new challenges,” Fleit said. “One of the biggest challenges is they have a whole new set of constituents to manage directly. CMOs may have been exposed to the board before, but now they have to manage it. They’re directly responsible to the shareholders of the company. They have much broader responsibilities as CEOs, but the capabilities they have and the leadership characteristics that make marketers successful today will serve them well.”
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