Is It Time to Hire a CMO?
“Hiring and firing CMOs has become a hot topic,” says Dave Peterson, co-founder and partner of Play Bigger, a San Francisco–based firm that advises growing companies on market category creation, positioning, and marketing. He notes that within the past year alone, Facebook, Netflix, and RIM each brought in a new chief marketing officer.
“I’m in conversations all the time with entrepreneurs who feel under pressure on this issue,” says Peterson, who is himself a veteran of several tours of duty as a CMO. “They may feel that their executive team is incomplete without one. Most of the time, though, people try to hire CMOs way too early.”
According to Peterson, reasons not to hire a CMO include:
You need a better website, you need PR, or you need social marketing. “You can hire really good marketing managers to direct the day-to-day work, people who are energetic and highly skilled at the task at hand,” says Peterson. “People senior enough to be CMOs are well past the days of churning the website, scrubbing the email list, or standing in the trade show booth. I don’t care who it is, if someone tells you he’s going to roll up his sleeves and get to tactical work, he’s either not CMO material, or not being totally honest.”
You are not willing to cede some major decision-making. “Every founder or CEO needs to make an honest decision on the matter of whether they want a partner to help them run the business,” says Peterson. “To hire a CMO, you need to be willing to provide autonomy in this core part of the business—market development, market expansion, and the product agenda.”
When, then, is it time to hire a CMO?
Your company has reached a plateau. Because businesses and industries vary so widely, it’s not possible to pinpoint an amount of revenue or number of employees that indicate the need for a CMO. “There may be some point in time where you realize that you’re not going to grow at a pace required to be a leader in your category or to provide returns your investors require,” Peterson says. “Your company has reached a level of maturity. But no matter how great your selling is, no matter how many great products you’re building, no matter how well-run your marketing programs are, the growth needle is not moving. That’s a good time to consider up-leveling your game and looking for a transformational leader to help partner with you to pivot the company.”
Your company has a gap that can’t be filled without a very senior person. “The CMO is a seasoned business executive who understands how to utilize marketing to prosecute a business strategy,” Peterson says. “You need a CMO if your company has reached a place where it needs true executive leadership and a set of domain experience you don’t have in the company today. That may be expertise in a particular marketplace, a set of channel experience you don’t have, or national or global experience you need.”
The gap that needs filling may be serving as the public face of the company. Founders and CEOs like Amazon’s Jeff Bezos or Oracle’s Larry Ellison serve as evangelists and market thought-leaders for their company’s products, but not every founder can be effective in that role. “An introverted, product-oriented CEO may hire an extroverted CMO to help drive a market agenda, inspire people, and create urgency with customers,” Peterson explains.
You envision four or more years of partnership with the CMO. “You need to really understand what are the long-lasting characteristics and attributes you need from this person,” Peterson advises. “For example, there may be some areas where you need to reposition the company, or solidify a strategy. Once you get the plan done, you can go off and start executing. In that case, you can outsource or bring in outsiders on a temporary basis. It’s like if you need your house painted every five years; you’re not going to go into business with the house painter.
“But at the level of CMO, you’re looking for senior executive leadership in category creation, market creation, or global expansion. You should be looking for a person who can not only create strategy, but execute it. That person will be on planes, trains, and automobiles, traveling around the world for your company, and can’t be outsourced. He or she needs to be hired and to have a role that includes guiding the company for at least several years.”