The Evolution of the Chief Marketing Officer

January 25, 2019 Tampa Business Management 0 Comments

Kamyar Shah

Chief Marketing Officer

Who could forget when IHOP changed its name to IHOb last summer, a move that had people talking and creating memes for weeks afterward? What about when SpaceX took the Tesla Roadster into space? You might even remember when Coca-Cola named K-pop group BTS as its new spokespeople, generating more than 1 million conversations about the announcement. Each of these events had two things in common: they got people posting to Twitter and making Facebook posts about big companies and there was a marketing team, complete with a chief marketing officer, at the helm. These days, marketing is practically a buzzword: everybody knows what it is. Despite that, most consumers — and even big business owners — don’t have a real idea of the importance of a CMO and how the role evolved.

The Early History of Marketing

When most people think of marketing, they imagine the online, print and digital advertising campaigns of recent decades, but the reality is that marketing has been around practically since the dawn of time. Even when bartering was the most common form of payment, only the best cobbler got meats from the best butcher, for example. Honing your skills and ensuring everybody knows you have them has always been an important part of success in any community.

Marketing in the 1900s

Although “chief marketing officer” was yet to become a job position, marketing truly started to take off after World War II. D. Steven White, a professor at University of Massachusetts Dartmouth, wrote a blog post indicating that companies in this era had one umbrella that covered sales, promotions and public relationship, and only that department cared about the marketing initiatives. Businesses slowly began to shift to a company-wide marketing model in the 1960s, and by the 1990s, it was the most common method. Customer service was of the utmost importance for every corporation, and every employee was expected to do his or her best to provide a high-quality experience.

Enter Marketing Technology

During the 1990s, companies began to expand their marketing technologies, creating data mining programs and customer relationship management software to help them track their customers and create a better experience. Around the time when more information became available and required analysis in order to be effective, the chief marketing officer really started to come into its own as a vital role.

Then vs. Now

When the role was born in the 1990s, the chief marketing officer was simply responsible for analyzing market research and focusing on advertising. While a tough job in and of itself, it was not nearly as expansive as it is in today’s digital world. Today, CMOs focus less on selling the product and more on building mutually satisfying relationships with current and potential customers.

It Wasn’t a Straight Shot to the Spotlight

Despite the appreciation for the role of chief marketing officer today, the same couldn’t be said just a few years ago. Forbes even went as far as to proclaim the role dead in an article in 2012. The article claimed that the CEO is the person who sets the overall marketing strategy and then requires the CMO to do all the grunt work, leaving most people in the role of CMO with little job satisfaction. They weren’t wrong. Just six years ago, many marketing officers found themselves considering career changes because they felt undervalued.

The Change Began

Simply put, social media began the change. In 2012, only 56 percent of Americans had social media profiles, but that number jumped to 67 percent by 2014. As of 2018, 78 percent have a social media profile, and most have multiple profiles. In the last few years, marketing has become even less about advertising the product and more about creating a communicative, personable brand as a whole. Social media users want to see interaction from the companies they support, and the chief marketing officer is the one who can make that happen. Why? He or she is the one who spends time “in the trenches,” taking the information from CRM software, analyzing it and turning it into facts the company can use to further its marketing campaigns.

By 2017, the role of the chief marketing officer was once again at the forefront of corporate branding, with an increasing number of people in the role saying they have a major responsibility not only in marketing but in customer service. Many of them also now have seats at the executive table as companies realize the importance of inclusivity in their ad campaigns and online correspondence. The CMO has a deeper understanding of the company’s audience and exactly what type of advertising will work best. For example, a business catering to those 60 and older may not have much success with meme-based marketing, but those catering to millennials are likely to have more success when using memes. Simply put, without a chief marketing officer, most big businesses would simply be left floundering and using a hit-or-miss approach to advertising and maintaining a customer base.

How CMOs Are Benefitting Businesses

A chief marketing officer benefits the business or businesses he or she works with by helping to create an excellent customer experience. In turn, that customer experience makes it more likely that the business brings in more sales and bigger profits. A CMO doesn’t just bring in more profits in the form of more customers, though. He or she is also responsible for analyzing marketing campaigns to determine what works and what doesn’t. Are fewer people clicking on email campaigns now? The CMO can decide where to tweak them so that they perform better. Perhaps a certain social media campaign didn’t go quite as planned. The CMO can use this information as a learning experience when creating the next campaign. The role of chief marketing officer is a pivotal one that no big business can do without and many small businesses don’t want to do without, either. In fact, the scope of what it means to be a CMO is larger now than ever before.

How Companies Can Improve CMO Tenure

One of the biggest problems with hiring a chief marketing officer is that many don’t stick with the job, and with seemingly good reason. Even now, most CMOs feel they are overworked and underpaid, and as much as 80 percent of CEOs feel their chief marketing officers are doing a dissatisfactory job. The communication breakdown likely enters the picture because many people don’t have a well-defined idea of what a CMO is supposed to do.

Some CEOs seem to expect everything from their CMOs, but nearly half of CMOs feel that they spend so much time approving campaigns and reviewing finances that they never have the time to spend assessing the long-term growth plans the company expects to see. If a company truly wants to get the most out of its chief marketing officer, the CEO must be willing to set clear, defined goals and provide time, space and proper compensation for the CMO to do the job well. Above all, remembering that the market is an adaptive one is extremely important.

The Three Types of Chief Marketing Officers

As with most job positions, the role of chief marketing officer is not a standard one and does not work the same for each officer or within each company or organization. While the different types of CMOs can vary greatly, most roles fall into one of three categories:

Commercialization CMO – More than 46 percent of CMOs fall into this category. They are primarily responsible for sales and marketing, such as hosting events, creating digital content and running promotions on social media. Enterprise-Wide CMO – Enterprise-wide chief marketing officer roles cover about 23 percent of CMO roles. These CMOs are strategic players in terms of creating more profitable businesses. They are often vital components of the product design teams and sales innovation teams. Strategy Focus CMO – More than 30 percent of CMOs focus on company strategy. They analyze company growth strategies and plans to determine how well they work and where changes can be made. These CMOs focus on product design, customer insight, and innovation.

While some chief marketing officers specialize in one area above the others, a strong CMO will have working knowledge in all areas. A business owner may choose to hire someone who has one specific purpose or who works across all areas, depending on the company’s needs and budget.

How CMOs Fit Into the World of Independent Contractors

The way we work is changing. An increasing number of people want to work from home exclusively. Others want to take their services where they’re needed, as they’re needed. People who work as a chief marketing officer are no exception. For this reason, many CMOs are now working as independent contractors, focusing their skills on several companies at once, working part-time or on an as-needed basis. This business model is beneficial for both the contractor and the corporation alike.

For the CMO, working as an independent contractor offers freedom. Shorter contracts mean he or she is never locked into one position or company for too long, which is especially helpful if the job isn’t what was expected. The freedom also means being able to work in different locations or take time off between jobs to travel or otherwise experience life. Finally, a CMO who works as an independent contractor often gets to hone more skills since he or she works for multiple companies, often that have very different needs.

Hiring a part-time chief marketing officer is beneficial to the business owner as well. Sometimes an organization doesn’t require a full-time, long-term employee to help with its marketing campaigns. Even so, that doesn’t mean it wouldn’t benefit from an expert when the time does come for a new ad campaign. This is the perfect situation in which it would be advisable to hire a CMO who works as an independent contractor. It allows the business owner to spend money only when needed to instead of keeping a full-time employee who may not always have work to do. Additionally, because the business owner won’t need to provide benefits or other compensation often related to long-term employment, the company can focus the budget on finding someone who is truly the best for the job.

What the Best CMO Looks Like

So, how do you become the kind of chief marketing officer that companies want to hire? If you’re a CEO, how do you find the best CMO? The answer is to look for several specific skills:

People Skills – A good CMO must have the people skills necessary not only to work with his or her superiors but with a team of other marketing specialists. In some cases, the CMO will also be required to speak directly to current or potential customers. Analytical Skills – CMOs must have strong analytical skills. They must be able to look at large amounts of intricate information and find patterns that show what works for a company and what needs to be reimagined. Creative Skills – A CMO must be creative. In many cases, he or she will need to use that creativity to design new products, create their packaging and imagine entire ad campaigns that are both cost-effective and engaging enough to bring in new customers.

The Future of the Chief Marketing Officer

Experts believe the need for professional, qualified chief marketing officers will continue to grow. As marketing continues to shift from “sell, sell, sell” to “engage the customer and create a relationship,” CMOs will become even more vital if corporations want to succeed. Technology will continue to advance, too, and as new AI programs cover even more data, the chief marketing officer will be there to bridge the gap between computer data and creating products that truly keep the customer coming back. Whether you’re a business owner who hopes to employ a CMO in the near future, or you’re a CMO who wants to understand more about your role in the marketing world, one thing is certain: the CMO isn’t going anywhere anytime soon.

Chief Operating Officer

The chief operating officer is one of the key members of the C-suite in many organizations. In addition to overseeing the operations of the organization, he or she may also be the second-in-command to the CEO. For a long time, this position has played a key role in running large organizations.

However, you may be surprised to learn how few companies have a COO position. According to the Harvard Business Review, only 37 percent of the largest European businesses had an active chief operating officer role in 2010. The United States isn’t far off of these numbers.

So, what is a chief operating officer? How did the position come to exist? What is changing about this role currently? And, what can we expect in the future for COOs?

What Is a Chief Operating Officer?

The primary purpose of this job is to oversee the daily operations of the company. It is a C-level position. Therefore, it typically handles a relatively high-level oversight of operations, with the specifics delegated to lower-level executives and managers.

In many cases, the COO position exists to allow the CEO to focus more on strategy and the long-term and less on the everyday management of the organization. As such, the specifics of the chief operating officer job description may vary depending on the needs and personality of the chief executive officer it is serving under.

Depending on the company, the COO may also function as a second-in-command to the CEO. While often unofficial, this relationship is why the duties of the top operations executive are so variable: his or her function is to support the CEO in running the business. This also means that the COO is frequently seen as the logical successor to the current chief executive officer.

The Origins of the COO

Although having managers dedicated to daily operations is hardly a new concept, the title of chief operating officer only arose in the second half of the 20th century. It emerged as the C-level nomenclature for corporate offices took precedence. Quickly the COO position became one of the big three C-suite jobs along with the CEO and CFO.

In many cases, the aim of the COO role was to shift some of the daily oversight responsibilities away from the CEO. However, despite quickly becoming a staple in many large corporations, the position was loosely defined from its beginning. Due to its nature as the right-hand person for the CEO, the chief operating officer was almost immediately a corporate chameleon.

For example, Richard D. Parsons held the job at Time Warner despite having no authority over the organization’s operating division. In other cases, the COO job was much more clearly operations related and the corporate president served as the second-in-command.

Trends Among Chief Operating Officers Today

EY, a research and leadership development organization, recently conducted a study of chief operating officers to learn more about their work. Notably, this included insights from COOs about what they thought of their roles and how things are changing.

About a third of COOs and half of their colleagues in the C-suite consider the position to be the toughest job in the organization. This is largely informed by the necessity for flexibility and foresight. Large organizations are growing increasingly complex and ensuring their operational success both today and in the future can be a serious challenge.

This level of challenge may see the COO filling the role of C-suite MVP. It can serve as both a reward for top team members and a way to get the most value out of talented people.

Many of the respondents to EY’s research also indicated that the job is not sufficiently strategic. Its historical role has been in executing the long-term goals of the leadership team. However, many people holding the position today think that this focus is too microscopic. Instead, they believe chief operating officers of the future will need to play a greater role in the strategy to be successful.

Undoubtedly the biggest trend of the research is that people in the top operations job feel the role is in a state of flux. New challenges and opportunities mean that it is not as defined a position as it once was. This can make being a COO stressful. However, it can also present opportunities for growth and success to ambitious executives.

A large percentage of the COOs studied by EY noted that their greatest concern is the “lack of acceptance or understanding” of their roles. They believe that a lot of people don’t understand what the operations chief is supposed to be or how best to use his or her talents. This may help explain another major trend today: the declining prevalence of chief operating officer positions.

The Decline of COO Positions

Many organizations have done away with the chief operating officer role. According to executive search firm Crist Kolder Associates, only 36 percent of Fortune 500 and S&P 500 companies had a COO in 2014, down from 48 percent in 2000.

This is likely the result of new information technologies allowing chief executive officers to oversee operations more directly. Therefore, they are able to handle the various non-C-level, operations-related executives and managers reporting to them without the need for a COO as a middle person.

It is also notable that it is growing increasingly less common for the CEO and chairperson of the board to be the same individual. This split has further increased the leadership capacity of the CEO. In turn, this minimizes the need for a C-level executive specializing in operations.

As individual executives are able to handle more responsibilities, organizations are also getting flatter. Rigid hierarchies are going out of vogue as leaders realize that a collaborative approach to running their businesses is more productive. Again, this reduces the need for the traditional hierarchy of executives.

Finally, more boards are expecting their executive searches to be both internal and external. They want to find the right person for the job rather than simply elevating an anointed successor. This trend has taken away from the function of the COO as the heir apparent to the CEO.

All this means that maintaining a chief operating officer position is less popular among the world’s largest corporations. However, removing the position isn’t the only option. Other organizations have reimagined it to better match the needs of today. In fact, many companies that have eliminated the role may, perhaps, have been better served by a creating a new definition.

A New Chief Operating Officer for the New Business World

Over the last decade or two, the C-suite has been introduced to some new titles. For example, some companies now have chief brand officers and chief diversity officers. These new roles reflect new priorities for organizations. Branding has taken a larger stage and maintaining a diverse workforce is a requirement for many companies.

Not surprisingly, changing priorities means that the chief operating officer role of today is different from when it was first conceived. In some organizations, it has become the top leader for the employees while the CEO acts as the public face.

The COO may also help other C-level executives connect their work with the rest of the organization. For example, if a CIO is working to introduce new technologies to the company, the operations chief may help him or her better understand the needs of the team members.

Furthermore, as more businesses take a collaborative approach to their work, having someone focused on aligning team members with the strategic goals of the organization is important. So, while the need for an executive head of operations may have changed, that doesn’t mean the role is unimportant. In fact, it may be more necessary than ever to have a COO.

Roles a COO May Play Today

As the positioning of the chief operating officer changes within the leadership team, his or her key roles also change. There are many ways that a COO can continue to be helpful in the modern business world:

Strategy Implementation: This is the role most closely related to the traditional responsibilities of the job title. The top operations executive can focus his or her efforts on making the C-suite’s strategies a reality. This may be executing the CEO’s long-term goals, working with the CFO to find well-aligned acquisitions or a host of other implementation-related jobs. Change Leadership: Perhaps the only constant in the business world is change. In some cases, an organization will bring on a COO to handle the leadership change of a particular strategic shift. In other cases, an organization may want someone in the role to help manage the ever-changing needs of the organization in a dynamic world. Experienced Mentorship: Developing leaders is essential to the success of an organization. The chief operating officer can offer his or her experience and insight to help develop younger leaders. This can be a significant job, especially if the demands on the CEO prevent him or her from filling this role. Partner: Sometimes chief executives simply need someone to work with them to get things done, whether that is as a sounding board, someone to serve as backup or someone to be a right-hand. This facet of the job is why the top operations executive has often been considered the second-in-command in many organizations.

Someone serving as a chief operating officer may fill some, all or none of these roles. However, they represent some of the most common applications of the position in companies today. They also demonstrate how flexible the job can be and how organizations may be able to better use their COOs in the future.

Expected Changes for Chief Operating Officers in the Future

You may wonder what to expect from chief operating officers in the future. Some suggest that we are seeing a resurgence of the use of COOs. As leadership teams begin to better understand what the position can achieve, the interest in having one as part of the C-suite increases.

According to Nate Bennett and Stephen A. Miles, writing for the Harvard Business Review: “We can easily argue that there is a growing need for the role. First, consider the widening scope of the CEO’s job. Today, we have bigger companies, with expanding global operations, aggressively pursuing acquisitions.”

They add that CEOs are expected to be the public face of the company while also interfacing with the company’s team. In other words, while the CEO may have greater leadership capacity, the expectations for the top executive have also increased, perhaps to a greater degree. So, many organizations may be able to benefit from an operations chief acting as second-in-command.

Others argue that with the always increasing rate of change in the business world, COOs are needed as an agent of change. David Spencer, writing for CIO, summed it up simply: “the modern COO connects the dots.” Organizations need to adapt to stay competitive and they need someone who can help hold things together as they change.

Exactly what will happen is impossible to say. One thing we can be certain of is that the future of the COO will not look like its past. The business world is ever-evolving and leadership teams evolve with it. So, whether there is a resurgence of chief operating officers or a continued decline, those who do hold the title will need talent and experience to be able to face the challenges of tomorrow.

Ensure Your Company’s Operations Success

Whether you have a growing company that isn’t ready for a full-time COO, want to reduce the position to part-time or just need some outside expertise, Kamyar Shah’s fractional remote COO service can help. As the role of the chief operating officer is constantly changing, it can be helpful to have on-demand access to insight and talent when you need it.

Get in touch today to learn how Mr. Shah can help with your operations or other executive needs. His years of experience across multiple industries afford him unique insight into how to prepare a business’ operations to meet the challenges of today and the future.

https://hbr.org/2011/11/understanding-the-coo-in-europ
https://en.wikipedia.org/wiki/Chief_operating_officer
https://www.forbes.com/sites/strategyand/2015/05/20/the-decline-of-the-coo/#44021a277cee
https://www.ey.com/gl/en/services/advisory/the-dna-of-the-coo—time-to-claim-the-spotlight
https://hbr.org/2006/05/second-in-command-the-misunderstood-role-of-the-chief-operating-officer
https://web.archive.org/web/20110714183334/http://www.ninamunk.com/documents/PowerFailure.htm

Business.com
7 Situations All Brick-and-Mortar Business Owners Will Face in Their First Year

You've finally taken the plunge and opened that little store you always wanted. Perhaps you've even planned for this moment for years, but the reality is often far different from what you imagined.

The United States government reports that 90 percent of retail sales still happen in brick-and-mortar stores. There are many reasons people shop in-store instead of online, including 62 percent indicating they like to see or touch an item before buying. There are many advantages to owning a brick-and-mortar store, even if you also have an online presence.

However, with any new business, there are unexpected situations you'll face in your first year.

1. Dealing with cash flow issues

Nearly every company deals with cash flow issues at some point in its growth process. Either revenue doesn't come in as quickly as you think it will and you owe your suppliers and employees more than what's coming in, or you have so many orders to fill that it's hard to find the funds to keep inventory in stock.

About 59 percent of small business owners told researchers they've suffered from cash flow issues at some point in their business. It's common to run into these issues in the first year because you have so many startup costs. Fortunately, there are a few things you can do to prepare for this scenario:

Set up accounts with suppliers now. This way, you'll likely have some leeway on payments if needed. While it's best to pay your invoices immediately, having net 90 instead of cash on delivery may make or break you in the first few years. Create an emergency fund. When cash flows well, set aside some for when it doesn't. Take out a personal loan. While this isn't the best option, it is an option if your business is profitable but you're short on funds at the moment.

You can also look into taking on an investor or two, but then you'll have to share profits, which creates another set of issues.

2. Preparing for customer payment fraud

A small percentage of people will complete a transaction and then file a claim for a refund through their credit card company. In most cases, the credit card company sides with the cardholder. You are then out the money from the transaction and the item you sold to the customer. Over one year, about 16 percent of survey participants indicated they experienced payment fraud.

When estimating profits and losses, factor in losses from payment fraud. It isn't common, but it does happen, so count on several each year and plan for how you'll overcome the loss of income.

3. Investing in a POS system

One thing you'll discover in your first year is how complicated keeping up with inventory flow is. You must get a handle on which items sell quickly, what needs to be ordered and items that aren't doing well (so you don't order more). A POS system allows you to see at a glance what's in your inventory and what is and isn't selling. Look for a system that provides an option for a customer loyalty program as well.

 

Editor's note: Looking for a POS system now? Fill out the below questionnaire to have our vendor partners contact you with free information.

 

 

4. Attracting foot traffic with signage

The proper signage announces your business to the world and draws in the foot traffic a startup needs in the beginning. The majority of people still prefer shopping at a brick-and-mortar store, but they have to know where to find you and what you have to offer.

Think through the messages you share on your signage. Add outdoor signs, a prominent business sign, and even signs on the floor or sidewalk in front of your store. Plan your signage so that you have a variety and it's easy to spot from a distance, at eye level, and up close.

5. Knowing the market

If you don't fully understand the market in your industry, you risk becoming irrelevant. Around 42 percent of business owners point to a lack of need in the market for their product or services as the reason for their failure.

Spend time studying your market and any technology changes or advances. Look forward to what might be important in six months or a year. Blockbuster Video is an example of a brand that was huge but failed to see the technological changes taking place around it. Because the company didn't prepare for streaming and mail-order video rental services, it lost its edge and faded into obscurity.

6. Studying your competition

About 19 percent of small businesses fail because the competition overtakes them. If you want success in your first year and beyond, understand who your competition is, what their message is and how they promote their brand.

If you want success, you must not just do the same amount of marketing – you must also rise above what the competition does. If they are known for their customer service, make yours that much better. Look at every aspect of your competition, identify their weaknesses, and make their weakness your strength.

7. Choosing the right team

The team working for your startup can make or break you. Because you're new, many of the top workers in your field may shy away from taking on a position with you for fear your business will fold after the first year. However, if you offer decent pay and a fun work environment, there are others who'll take a chance on you.

Communicate your goals and philosophy as a brand during the interview process, and only hire those who are as excited as you are about building something amazing from the ground up. If you hire someone who winds up not being good fit, be fair, but tell them it's time for them to look for something else. You can't afford to keep someone on board if it isn't working for either of you. Your team can make or break you in your first year.

Enjoying the ride

Your first year will fly past. In that time, you'll gain knowledge, make mistakes and have success. You might want to keep a journal and note any lessons about running a business you learned along the way. You never know when you'll come across the situation again and need to refer back to the solution, or at least not repeat the same mistake. A startup is exciting and holds the potential for fantastic success, so dig in, enjoy the journey, and learn from those who came before you.

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