Follow the yellow brick road: The B2B CMO journey to the board
Stop talking about the intricacies of marketing activity in the boardroom if you’re a CMO looking to earn a seat in the C-suite. Instead, frame everything through the lens of value realization vs. value creation.
For B2B CMOs trying to win a spot on the board, balancing boardroom priorities and how they know the marketing function contributes sustainable revenue growth can feel like a disorientating journey into the Land of Oz.
Like Dorothy, they know where their destination lies – in this case, the boardroom. But given our ‘Building the Board-Ready CMO in B2B’ report found that only 8% of B2B CMOs are confident in earning a seat on the board based on their current skillset, it seems as though CMOs are struggling with the ‘how’ of getting there. So, what does the yellow brick road look like for senior marketing leaders looking to successfully make the journey to the board?
Learn how to position the marketing function
The role of the CMO has become the shortest-tenured role in the C-suite, no thanks to always having to chase moving goalposts. Many years ago, marketers owned most of, if not all the 4Ps. But as time’s passed, their remit has slowly whittled down to just promotion. The comeback is on, though, and I speak to and see smart marketers daily who’re trying to become agents of value realization.
They’re trying to showcase metrics beyond clicks, impressions, and reach, instead focusing on business metrics like pipeline, revenue, and ROI that act as crucial throughlines to the CEO and the board. This showcases a CMO’s ability to think in business vs. marketing metric terms and how they drive value realization.
But as good as that is, it still might not be enough. I’ve talked to a few board members recently (mostly B2B), and something that’s come across loud and clear is that getting onto a board as a marketer can be incredibly difficult. If anything, marketers should downplay their marketing knowledge because it’s viewed as more operational, whereas board members look for a strategic mindset that can balance risk and compliance.
In other words, they’re looking for marketing leaders with ‘T-Shaped skills’ – a view reflected by Sonita Lontoh, Board Director at a public company and former Fortune 100 Tech company executive:
“Boards generally don’t look for one-trick ponies. We desire someone with a ‘T-Shaped’ perspective. Someone who can take a step back and look at the big picture, who has the financial acumen, strategic skills, and the dexterity to see around the corner to help us navigate material risk and opportunities to create long-term value for shareholders.”
How can CMOs start positioning themselves as board-ready? By recognizing the difference between value realization and value creation.
Or, discover what it takes to be a board-ready CMO in our latest research report.
Value realization vs. value creation
I won’t pretend to have made up either of these terms. I was at an Adweek CMO event recently and heard from perhaps the most impressive speaker I’ve ever seen, Ann Mukherjee. A former CMO herself, Ann is now CEO of Pernod Ricard. She talked at length about how marketers who want the CEO job should be trying to drive value creation as that’s what boards care about most.
So, what is value creation, and how does it differ from value realization? Here’s my definition:
Value realization
Value realization is about showing the business that Marketing (in tandem with other GTM functions) can drive business metrics such as pipeline, revenue, and, ultimately, ROI. It’s the ability to show influence on a profit and loss (P&L) statement. This can be done by doing something as lofty as owning all the 4Ps in some way or a simple brand campaign – the key is in showing how dollar spend drives multiple dollars (or whatever currency you care about) out.
Value creation
Value creation is where you create a service or product because, as a marketer, you understand the customer better than anyone. This creates increased stickiness with your brand, satisfies a customer need (the most important metric), and drives revenue.
At a recent conference, Ally CMO, Andrea Brimmer spoke alongside her CIO about how they created an application designed specifically to help customers with their day-to-day lives, moving them from being a pureplay banking service to a lifestyle enabler that just so happens to hold some of your money.
In B2B, this could be by creating a brand-new product or service offering – allowing you to own the 4Ps by owning the promotion (naturally), dictating the price, and setting the placement. This is how you show the board that you are CEO material.
The path to becoming a CEO is paved with alignment
By driving value realization, most CMOs are doing only what’s expected of them. To echo another point Ann made: Marketing is the only function that can truly OWN the customer as they have the widest and deepest insight. Sales own customer conversations, but they can be a smaller universe that sometimes skews insights to fit their needs. Marketing can segment and identify the biggest, best, and most impactful parts of the market.
If we want more CMOs to become CEOs, we must move beyond that and create value. The two motions are interlinked because if you can realize value, you’ve most likely built equity and pricing power with your audience on top of trust with the board – making it easier to position the marketing function’s ability to create value from that same or similar audiences.
As industry veteran and former Global CMO at AB InBev, Chris Burggraeve mentions in our ‘Building the Board-Ready CMO in B2B’ report, “Any marketing leader who does not take the time to understand and significantly influence the other 3Ps (aside from Promotion) will struggle to contribute towards long-term value creation. Especially if you want to be seen as a growth leader in the eyes of the C-suite and the board.”
In essence, delivering value realization through brand, for example, and creating value can get B2B CMOs the top job. From there, they can become the true custodians of brand, aligning every C-suite function around a consistent GTM motion that customers and prospects will love the business for.
Learn more about how our Growth Intelligence service can help aid value realization to create value across your business.