Most of us watched Superbowl 52 between the Eagles and the Patriots. Part of the charm of theSuperbowl and the parties we attend, relates to seeing the commercials. In fact, much time is used “rating” the commercials in terms of humor, appeal, and somewhere down the line the effectiveness of the advertising spend. As a piece of trivia, a Superbowl commercial this year costs $5 million for a 30 second ad PLUS the actual cost of designing, developing and shooting the commercial. Note that Nick Foles, the Eagles’ Quarterback and MVP, made only $1.6 million for the entire year. By the way, as a Giant’s fan I really liked the Eli/Odell Dirty Dancing commercial.
Last year, Coke eliminated the role of Chief Marketing Officer and reorganized around a new role of Chief Growth Officer (CGO) to integrate marketing with customer and commercial teams. Other consumer package goods (CPG) companies, such as Hershey and Kellogg, have also moved to a similar function with Kellogg instituting the function in mid-2015. How successful are those companies? It may be too early to tell. Kellogg’s results over the past few years have been passable and they might not be the best model to use. Their CGO was an advertising executive – albeit very smart and well regarded and their revenue the year after his appointment was DOWN.
We can argue that a title change may be necessary but it is certainly not sufficient for improving growth and making that revenue and growth profitable. The Chief Marketing Officer has significant issues in a corporate structure. I have seen many times that marketing is regarded as a function of planning more ads, designing creative billboards, winning the contest of the best Superbowl ad, and winning creative awards. This is more “fluff and stuff” vs the reality of hard marketing and on this basis alone, a change in title from marketing to growth officer seems warranted.
Let’s take a look at five (5) lessons that can be applied to what I call Growth Leadership.
1. Growth starts with the CEO. Without the CEO and his strategy, successful growth plans cannot be put into place. I keep reminding myself of the Alice in Wonderland quote: If you don’t know where you are going, any road will take you there. Companies who want to grow have to put a CEO with that objective in place and not all CEOs fit that bill.
2. The company has to have a growth mentality. While this may start with the CEO, the people he hires and the culture of the organization must be focused on growing. I know this may sound strange to some. Unfortunately, most of us have been in companies that believe growth is based only on EBITDA increasing. While that is important, EBITDA can be improved – at least in the short term – by cutting cost. I have never believed that you can shrink yourself into greatness.
3. Innovation must be a hallmark of a growth company. Without a solid business model and without good products companies will not grow. There is just too much competition and the internet and agile development around software puts many companies on an even footing. Think about companies you know. How many of them are growing? How many of them have a solid product line and product portfolio? Growing companies have solid portfolios and products in the wings – or a good acquisition strategy to acquire new products or partners that have these new products. A creative ad on the Superbowl is not sufficient. Recall the commercials you watched. Which ads pushed minor line extensions or existing product vs. new ones? I only recall two really new products: a Kia Stinger car and a new Lexus LC500. (BTW, I like both of these cars!!)
4. P=R-C. Let’s get to basics. Any officer in a company must recognize this fundamental equation and determine how they can affect the elements which create profit. Clearly, a Chief Growth Officer will be responsible for the revenue side as well as the investment which will be put to use in generating that revenue. As a correlate, growth officers must change their internal perspective of being cost centers to investment centers. They need to think about a concept called return on investment. Even good marketing officers that I have known, focus on a concept called ROMI or return on marketing investment, treating marketing as a business and not merely a creative channel. So, when we look at the Superbowl commercials, how many of these were merely “fluff and stuff” creating awareness for the company vs. a means to drive growth? Would the company be better off spending more than $5 million on alternative marketing activities that would directly drive growth? What is interesting is that small companies with lack of budget dollars focus on the bottom line and are tactically driven.
5. An integrated approach to growth can be achieved with forethought. Whether you call the executive a Chief Growth Officer, Chief Revenue Officer or Chief Marketing Officer, I believe this person is an integrative force within the company. This person, whether directly or indirectly, must be a linking pin between the outside world of the customer and the internal world of production and manufacturing. That person needs to connect and get different functions such as marketing, product, demand generation, social media, customer service, usability/user interface, and customer service to work together to a common end.
The title of a function is important just as a brand and its meaning is important to a company. I am not a huge fan of marketing as it is implemented in many companies because in my opinion current Chief Marketing Officers have failed with regard to helping a company grow their revenues profitably. I have argued this many times before. I believe I am correct in my assessment, as the tenure of a CMO is approximately 4 years, lowest tenure in the C-suite and approximately half as long as their CEOs. But I also believe that there is an opportunity for companies to improve their top line growth and margins by following these 5 prescriptions. We, at C-Level Partners, are focused on helping small to mid-cap businesses improve their growth and margins. Write to me at firstname.lastname@example.org to see how we can help your company grow.