One the face of it, there’s little to recommend about the role of Chief Marketing Officer (CMO). Sure, it has ‘Chief’ in the title, which is a plus, and ‘officer’. Two words that excite many an ambitious corporate staffer as they climb the corporate ladder. But it’s the middle word that’s the problem.
Marketing is an ambiguous term, its meaning diluted by profligate and inappropriate use. It’s hard to do a job well when nobody agrees what the job is. Which explains why the tenure of a CMO is the shortest in the C-suite. It’s an optimistic CMO that irons five shirts on a Sunday.
It is tempting to start this paragraph with the phrase ‘it’s time to redefine the role of the CMO’ or something similar. But that would represent the triumph of hope over experience. A quick Google search of ‘CMO role’ will show articles of a similar vein going back twenty years.
CMO responsibilities, and by definition those of the teams they lead, are often debated in dualistic terms. Specifically, should they have an ‘inside–out’ focus, seeing the world through the lens of their business or an ‘outside-in’ focus, seeing the world through the eyes of their customer?
Let’s be honest, this isn’t a useful question. It’s one that has been asked several times before. And answered. The consensus can be summarized, in the style of Animal Farm; “externally focused good, internally focused bad.” But, in common with many binary choices, this is a false dichotomy. It is an oversimplification.
It’s like asking a person if they prefer being asleep or awake. For most of us, that’s a contextual question. It depends. If it’s nighttime we like to sleep, when it’s daylight we like to be awake. Yes, some people can’t wait to crawl into bed and stay there for as long as possible. Just as some resent the biological necessity to sleep and set their alarms for 4:00 AM. But they both represent the extremes. Regardless of personal preference, nobody is permanently asleep or constantly awake.
The Bigger Picture
Before we dig into the CMO and marketing team roles specifically, let’s take a broader view of the enterprise. Being excessively internally focused is generally a bad thing, but so is being overly externally focused. An internally focused business runs the risk of losing sight of their customers, missing important trends and insights, and being outcompeted. An externally focused business may become uncompetitive through inefficient operations and a rising cost base. The logical position, as is often the case, should be somewhere in the middle. What is sometimes referred to as the ‘Goldilocks zone’. Unfortunately, it isn’t that simple.
First off, we need to stop assuming that your internal/external orientation of the business is a fixed position. Think of a rev counter on a car dashboard that goes up or down depending on the input of the driver. Now imagine a similar device that sits on the desk of the CEO.
When the business leader is predominantly externally focused the needle is way over to the right. When they are internally focused it sits to the left, and for the most part, it sits somewhere in the middle. The position of this dial sets the tone for the entire enterprise.
The Story of Lego
The Lego Group is a good example of shifting focus. Lego bricks are one of the most widespread and recognizable children’s toys in the world. Most of us played with them as children, our interest waning as we went through teenage years and early adulthood. We returned to the fold as we became parents and bought them for our kids. Lego was one of the few, shared experiences that passed from generation to generation. (The experience of standing on a stray Lego brick with bare feet, in the dark, while checking on a sleeping child is one that many parents share).
Lego couldn’t have been more externally focused. The dial on the CEO’s desk was way over to the right. They focused almost entirely on product development and expanding its markets globally. They added Lego Technics, with moving parts and motors, to make things more interesting. They took the shared family experience to new levels with their theme parks. They stayed relevant by licensing deals with popular characters from blockbuster movies like Star Wars and Harry Potter. They recognized that children were becoming more tech-savvy and introduced computer-controlled robotics with their Mindstorm range. They launched their video games division when they established that the growth of computer games for younger children was a threat. Then they nearly went bankrupt.
The problem with Lego wasn’t their relentless external focus on expanding and improving their offer. It was the lack of attention paid to more internal matters. They opened multiple factories around the world to be close to customers but many of them lacked the scale to be efficient. Because of its wide manufacturing base, Lego needed multiple regional distribution points. Its inventory ballooned to over twelve thousand individual parts in over one hundred colours. It had over ten thousand different suppliers. It was hemorrhaging cash. Something had to change.
New CEO Jorgen Vig Knudstorp took over the helm. The needle on his dial went way over to the left. He had no choice but to focus internally. He consolidated manufacturing into a few mega factories in lower-cost countries. He centralized and outsourced distribution to a specialist provider. He identified painful redundancies in the company town of Billund, Denmark. The theme parks and the computer games division were sold. The product range shrank by 50% to six thousand individual parts.
These actions created a platform for sustainable growth and a return to profitability. Before long the needle was back in the middle, where it probably should have been all along.
Thanks to the imaginary dial that sits on the CEO’s desk we can visualize how a business’s internal/external focus varies. While this is progress, it is still too much of a blunt instrument. We have to go a little deeper.
Regardless of the overall business focus, which is measured in terms of the resource allocated and the attention given by the CEO and their team, individual departments each have a natural orientation. Some departments are primarily internally focused and others are, by definition, externally focused.
Sales, customer support, product development and so on should be predominantly externally focused. They ought to see the world through the eyes of the customers. Operations, HR, finance, etc. are often internally focused. The consequence of the CEO shifting their focus to one extreme or the other is to put certain departments into the spotlight while others lurk in the shadows. Which doesn’t work in the long term.
In the Lego example, a strategic shift to operations and logistics would not have worked if sales, marketing and product development were not also doing their jobs and being part of the solution. A business can’t succeed at the extremes of internal or external focus in the long term. Like our sleeping analogy earlier, you need both to some extent.
Most businesses know this intuitively and the role of the CEO is usually to keep the focus-o-meter on their desk in the performance zone, somewhere in the middle. But the responsibility for this doesn’t exist only in the corner office. The CMO needs to be accountable for balancing the conflict between internal and external oriented departments and it’s not enough for the CMO to be responsible for this balance at an organizational-level. His team has to be adept at bringing this outside-in mindset to the many strategic decisions that occur daily at the different levels of the firm.
Department’s Natural Orientation
For example, HR departments are principally concerned with issues relating to the workforce. It is commonly believed that motivated and engaged employees drive business success. Consequently, HR spends their time on making employees feel valued by focusing on employment conditions, salary levels, dispute resolution, hiring and promotion activities, training and development, appraisals, staff surveys and so on. Which are all fairly internally focused activities. But these activities are insufficient for creating a great corporate culture.
The evidence challenges the very notion that motivated and engaged employees drive business success. They are correlated but the causality probably runs in the other direction. Employees are motivated and engaged because the business is successful. This means that HR should collaborate with the CMO to develop a strong external mindset and align internal activities and communication to the marketing plan.
You could make a similar argument for product development and operations, finance and sales and so on. Departments will have different emphases and the company will have a specific current focus, but ultimately it’s about balance and cooperation. Are the right people focused on the right things at the right time? More importantly, do they understand the implications of their decisions on other departments?
The future CMO Responsibilities
Which is why we see the role of CMO and their entire marketing organization as orchestrators and coordinators. The strategic marketers balance the outside/inside orientation of the business and marshal resources accordingly. The CMO has a leadership role beyond the marketing department. Their influence extends to departments from across the spectrum – both internally and externally focused.
So the answer to the question “Should a CMO be primarily internally focused or externally focused?” should be “it depends”, or better still “both”. Context is everything.