WTF is a CGO or: How to Create a Culture of Growth
“An advocate for the increasingly powerful consumer…in a nexus between the changing dynamics of marketing, commercial operations, innovation and growth…typically a powerful direct report to the CEO and accountable for providing an end-to-end view of the business and enterprise-wide growth. The CGO is arguably the most powerful in the company after the chief executive…an accomplished brand builder with P&L experience – ensuring customer-focus and commercial grounding.” –Jo Renea, Not Just A Glorified CMO
While the CGO role originated within agencies and media companies years ago, today’s brands are following suit, including ConAgra, Mondelez, The Coca-Cola Company, The Hershey Company and Kellogg Company. According to research by Culture Amp released earlier this month, there’s currently 455 CGO roles in the U.S., and despite the common misconception that it this is merely a big brand trend, 192 of those are at companies with less than 50 employees.
With only 38% of CEOs surveyed feeling very confident about revenue growth in the next year, it’s no wonder they’re scrambling for a solution. This comes in the wake of a drastically different marketing landscape than years ago – as many marketers and by association, their agency partners, have lost touch with P&L in favor of execution that demonstrates instantaneous results.
So How Did We Get Here?
“They might as well call it chief-because-we’re-not-growing officer. Or chief-because-we’ve-lost-sight-of-the-customer officer. These roles are designed to compensate for something that’s not happening. It’s an acknowledgement that marketing isn’t working and, in the irony of ironies, marketing has an internal image problem. But what is marketing if it’s not about the customer and growth? Customers and growth should be indivisible from marketing.” –Phil Rumbol, Why The Chief Growth Officer is a Threat to CMOs
Too often allured by the shiny appeal of various executional efforts through creative and technology, many marketers and agencies continue to tout instantaneous results – made possible through the advent of martech, and often fueled by a project-to-project mentality. Consequently, the “success” of marketing execution is often now measured by short-term and marketing KPIs, disconnected from business outcomes and P&L accountability.
“The rise of the CGO – now in place at companies such as Mondelez and Colgate-Palmolive – does raise a clear question about whether marketing is doing enough to seize control of the growth agenda…For marketers, the question is surely whether the emerging CGO function represents a new opportunity to step up in the boardroom (and assume a CEO-in-waiting position), or whether it will come at the expense of marketing’s C-suite access and credibility.” –Claire Beale, CMOs: An Endangered Species?
As a result, today marketing execution is often disassociated from accountability and business results – enter Rova as an acronym for R Over A, or results over activity. The C-Suite now sees marketing as merely activity, instead of a driver of long-term business success. And potentially even more dangerous, most marketers see themselves in this light too, completely satisfied delivering on marketing attribution that fails to ladder up to the data and metrics the C-Suite understands and values. As such, agency partners are regarded in the same fashion – and left responsible for enacting activity in lieu of driving results (which in turn creates a myriad of problems that you can read more about in the ebook The Agency’s Guide to Earning a Seat with the C-Suite).
Thomas Barta, a marketing leadership expert in conversation with Marketing Week, discusses Coca-Cola’s recent announcement that a new CGO hire will replace its CMO role:
“‘It appears [new CEO James] Quincy just doesn’t trust the company’s marketers to drive growth. Marketing will lose the boardroom seat, reporting to the new CGO…As long as marketers continue to position themselves as experts in advertising, brand positioning, millennials and the latest digital fads – instead of being growth drivers – we’ll see more CMO positions disappear.’”
Many have been quick to claim the CGO is the CEO of the future – a moniker once reserved for the CMO role. In order to save the CMO’s spot within the C-Suite, and to save agencies from being eclipsed by consultants now competing for shared marketing budgets, things must change – including new priority sets, a shared charge and a refocus on how we all contribute.
Marketers That Think Like CEOs
“CGOs exist to corral a business around building revenues and engaging customers, uniting marketing, sales, innovation, R&D and so on. For the best marketers – take [Campaign’s] Power 100 – this seems like a natural career progression and a compelling opportunity to align marketing skills with responsibility for corporate advancement: the CGO not as a threat to the marketing function but as an adrenaline shot for it. If this is to be the case, marketers need to grab the growth lever, prove their role in building profits and ensure they’re not simply the people known for the quality of their advertising.” –Claire Beale, CMOs: An Endangered Species?
CMOs must think and act like CEOs, with their key focus being customers as they relate to growth and P&L – using data as evidence, or to provide integrity behind decision making. Instead of living shiny project-to-shiny project, CMOs must live and breathe business success – understanding what it looks like for their organization across every business unit, and able to define the strategic KPIs necessary to achieve it, relevant targets and specific timeframes. Then, they can start identifying the tactics worth investing in to get there. Unfortunately many CMOs are skipping ahead to the last step, and acting on tactics rather than strategy. This has ushered in the role of the CGO and terms like growth hacking as the disconnect between marketing execution and accountability for business results has subsequently emerged.
In a recent interview by Drift with Mike Volpe, CMO at Cybereason and former HubSpot CMO, when asked about growth hacking, Volpe explained:
“What you’re actually describing is good marketing. People think I’m going to start a Growth Team, but I think well what the f*ck is the rest of your marketing team doing? If you’re in marketing, or if you are in sales…you should be doing growth. Like who’s not on the growth team?”
Not all have jumped on the CGO bandwagon, however, and some still hold onto the ability of the CMO role to seamlessly pivot into that of the CEO. Take Dick’s Sporting Goods, who just last week promoted their CMO to president. “To have a president in place now with Lauren and her digital experience and marketing experience, I think is going to be very beneficial to the business,” said CEO Ed Stack, as reported by Ad Age.
“Until recently, the career path was not a common one. But as brands assign more responsibility and credibility to their top marketers, it’s becoming a more frequent trajectory – at least for brands outside of retail. In March, Kevin Hochman was promoted to president and chief concept officer from chief marketing officer at KFC. A month earlier, Jay Farner was appointed CEO at QuickenLoans from CMO. Recruiters expect the trend to continue.” –Adrianne Pasquarelli, Why More CMOs Are Being Elevated to President or CEO Roles
A Culture Based On Growth – and How Agencies Fit In
CMOs must cultivate a growth mentality and culture not just team-wide, but organization-wide. Instead of marketers being seen as the internal executors, the ones building websites, making ads and creating impressions, they’re reputable for building and maintaining growth habits across the company. “They need to clearly identify a customer-driven source of growth, focus all their efforts on unlocking it and then conduct regular growth audits to track progress,” Rumbol goes on to explain.
“The common theme across all of the culture gurus is that culture starts with values. Values do not reside within a division, a department, or a job title. They cut across the organization. If you want to build a culture for growth, recognize that you have to establish values that apply to everyone within your organization. This means that nobody can say, ‘That’s not my job.’” –Ian Altman, Build A Culture For Your Organization That Spurs Great Growth
Many pundits have argued CGOs are necessary as “this represents a structural shift at the top, with marketing reporting into the CGO in support of the overall growth equation” Renea further explains. But the truth is, everyone should be focused on company-level growth and marketing and sales as it relates to revenue and P&L. All of the reasons presented in a case for CGOs (including speed, duplication of efforts and increased transparency and accountability) are too at the core of the modern marketer. Others argue CGOs can help reimagine brands, be future-focused and not stuck in the past of what’s worked and what hasn’t, which is likely no longer relevant in a fast-paced environment. While a CMO should in their very nature be the voice of the customer, which is always changing keeping the CMO on their toes, this is also where agencies shine.
Agencies are increasingly figuring this out and executing more strategically-driven, creative solutions – infused with their expertise in technology, creative, pop culture and human behavior. Instead of relying on data and findings from years of research, that seemingly means nothing in a constantly changing marketplace, a trait consultants consider their advantage, agencies can help clients reimagine their businesses and customer experience starting from the beginning. Agencies take note of company culture, they get what a brand truly embodies, they probe consumer behavior — absorbing that all before translating it out into communication efforts, engagements and experiences that align. The ability of an agency to imagine the world from someone else’s point of view is unique. And it doesn’t take vertical expertise on their part to achieve success — in fact, that’s why partnerships exist and the CMO role is even more necessary as they know their customer best.
CMOs must take note and start proactively demonstrating how their effecting business outcomes and cultivating a culture based on the growth mentality. Marketing is no longer siloed to a team or department – marketing is growth – and your entire organization should not only be responsible for it, but held accountable. Consistent team-wide meetings are a necessary place to start getting your organization to be more growth-oriented, with representation from marketing, technology, sales, product, service and so on. Build an ecosystem and together this team will ultimately make the smartest, most informed business decisions for growth.
For agencies, there’s additional steps you should also be taking to earn a seat with the C-Suite – demonstrating your value as a strategic partner across your client’s organizations. As clients shift away from project one-offs, in search of partners to deliver on consistent and correlated project streams, how are you establishing long-term value and attributing execution to business outcomes that move the needle? Download our free ebook, The Agency’s Guide to Earning a Seat with the C-Suite, to find out how.