What Your CEO Really Thinks
Agency Boathouse recently released its report, "The Third Annual CEO
Study on Marketing and the CMO," which shared illuminating and fascinating insights into the CEO mindset. Some of the findings included the following:
CEOs identified what they want their team to solve for: driving growth, market share/sales, differentiation, improving brand reputation, and "transforming company narrative."
49 percent of CEOs believe their marketing team is "best in class."
40 percent of CMOs are rated "best in class."
Half of CEOs believe the short tenure many CMOs have "is a sign of success, not failure."
CMOs' perceived trust with C-suite stands at 43 percent and 41 percent with the CEO.
The report notes that CEOs believe CMO loyalty is growing, stating that "in a dramatic shift from 2021, the CEO's perception of CMO loyalty is growing, [as] 8 in 10 CEOs perceive CMOs would
take a bullet for them (up from 3 in 10 in 2021)."76 percent CEOs are "integrating A.I. into their organizations" and 90 percent believe that 90 percent of their CMOs are engaging with AI for the benefit of the company.
The report found that leveraging AI is most common in areas such as "content (generation/personalization) and analytics (about two-thirds), and customer experience or research (half)."
Jackie Wolin, strategy and research at Boathouse, shared insights into the report below.
Overall, why do you think CEOs are now more positively viewing their CMOs, as well as viewing a short CMO tenure as a sign of success? What has changed to alter their perspectives?
The role of marketing has greatly evolved and modernized over the last 55 years when Philip Kotler first published his groundbreaking textbook Marketing Management.
Driven by technology and a more informed consumer, CMOs are expanding their digital prowess into advanced analytics and tracking, generative AI, and consumer intelligence tools to adapt, execute, and measure their return on resources. This new evolution of Marketing is more foreign to CEOs, given that few come from a marketing background. In a recent McKinsey study, "66 percent of the CMOs we surveyed said their CEOs were not comfortable with modern marketing." Our data suggests higher positive CEO ratings of CMOs in broad areas such as relationships with C-suite, boldness/creation of innovative ideas, seeking perspectives and solving problems. CEOs recognize these areas of success and the complex role their chief marketers play.
The tide has been shifting on the perception of turnover and power dynamics between employees and companies over the last three years. Our data shows CEOs are increasingly aware of tenure and half believe it is a sign of success (versus 20 percent in 2021 to 2022). Our sample is balanced between public/private company CEOs of $250 million-plus, aligned with the 2022 Spencer Stuart tenure study which expanded from Top 100 Advertisers (B2C) to include Fortune 500 companies (B2B and B2C) who have higher retention rates at chief levels. As CMOs gain experience and advance to larger companies, it is often their last stop. Another contributing factor could be that CMO roles no longer have to be exclusively in person and companies are hiring remote employees, opening more opportunities for marketing leaders.
At some level we see some inconsistency in this finding with another finding in our survey, specifically that only 11 percent of CEOs reported having fully achieved their vision for the organization. Given the role of marketing and the CMO in executing a corporate vision and supporting the CEO, to have so few report having achieved their vision, but also saying shorter CMO tenure translates to success seems inconsistent. There are many potential factors that might inform this, including a disconnect in how CEOs see their own organizations and how they perceive dynamics in others. It is an area we will continue to look more closely at in subsequent surveys.
How is the CMO role itself shifting? How does AI potentially factor into it?
Our study focused on the CEO perspective of the CMO role as this adds an important perspective to the multitude of studies, blogs, podcasts, and thought leadership on how CMO roles are evolving and what it takes to be successful. By better understanding what issues and audiences influence CEO decision making, CMOs can position themselves as growth partners forming trusted relationships with their CEO.
Given the CEO focus has shifted from a stakeholder dominant mindset to a more shareholder dominant mindset, it is important that CMOs have the CEO vision and strategy guiding them. The top five issues "increasing in importance" for CEOs link to financial performance. A tactical, short-term, myopic lens of the role of marketing will not best serve performance.
AI adoption is widespread with 76 percent of CEOs integrating A.I. into their organizations. But AI has its place in CEO priorities (10th in the list of 16 issues influencing CEO decision making and time). Marketing has the broadest adoption across functional areas of the companies surveyed, and CEOs cite content (generation/personalization), analytics, and customer experience or research as most integrated into marketing.
Given the chatter about the adoption of generative AI in marketing, this is an important trend to keep an eye on. Specifically, how much of the AI adoption that CEOs champion is for marketing and how are CMOs responding? Are they pushing back on things they do not see as productive and are they part of the strategic decision making for what is purchased and implemented? With the dialogue and attitudes on AI evolving rapidly, we will be evaluating this important question more in future surveys.
From the CEO's perspective, why did personal trust between the CEO and CMO decline?
Although not asked directly, when you look at data across the study, we see CMO relationships with the C-Suite viewed positively. However, asking CEOs about statements that connect to how the CMO makes the CEO feel, you see the personal trust is more tenuous:
Only 20 percent of CEOs say the CMO is "on my side, I trust them" and 10 percent "puts my needs before their own."
Confidence in their CMO and alignment with vision/values also significantly weakens from 2022 with only three in 10 CEOs believing these statements are true of their CMO: "supports me in driving my long term-vision," "shares my values," and "is someone I have great confidence in."
In 2023, CEOs believe that personal loyalty has been replaced by company loyalty: Only 9 percent of CEOs say CMOs are more loyal to the CEO (27 percent in 2022) versus 51 percent to the company (34 percent in 2022).
Personalization and AI are clearly the top priorities for companies right now (and the connection makes sense as AI can help scale personalization). Can you elaborate on where/how you see these changes happening, such as with content creation?
As part of our ongoing focus on providing clients with the best possible competitive advantage, we have spent much of the past two years evaluating and implementing a suite of AI solutions that we view as vital to supporting the goals of the CEO and CMO. In our view, too much emphasis is put on generative AI and not enough on what we call performance AI. What we mean by that is, automated technology solutions that augment intelligence, strategic planning, and execution, as opposed to replacing human contributors.
Things like large language tools and data analysis that can help organizations better understand the prevailing attitudes about their organization, who key influencers are and how they are shaping the narratives that inform a brand. Based on the ability to analyze this kind of rapidly collated information set, organizations are better positioned to shape and launch narratives that define their category, their brand, their products, and their values. When we think of the most important kind of AI, we think in these terms.
Was there anything that was surprising from the report?
Three things stood out:
There is a trend change to what is important to CEOs — shifting focus externally to drive business considering market conditions, economic volatility, and geopolitical disruptors. It comes at the expense of workforce and DEI initiatives, heightened post pandemic, but scaled back as the negotiating power returns in many industries to the company.
This realignment from idealism to capitalism could have a lasting impact on employees, the brand, future customers, and growth.CEO priorities for marketing are to drive growth — in revenue, market share, differentiation, and reputation. There was a consistent uptick this year, across the board, in how CEOs grade their CMOs. However, CEOs show skepticism that their CMO can maximize marketing's full potential.
[Thus,] the CMO role is increasingly complex and fast-moving fueled by technology, AI and customer expectations. Are CMOs myopic in their functional role — not embracing the CEO's pragmaticism?Relationships with the C-suite and company loyalty are strong but there continues to be a gap in the personal trust dynamic between the CEO and CMO.
Many CEOs are still a long way from delivering on their company vision and strategy. Deepening relationships between CEO and CMO is critical to achieving mission-critical company goals. Marketing and communications require a strong trust bond with the CEO.
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