CMOs and CFOs: The New Power Couple
Finding common ground in the boardroom
In the past, a company’s CMO and CFO could not have been further apart when it came to working together. Their goals were often different, and their workplace culture clash was often as apparent as the CFO’s suit and tie and the CMO’s jeans and t-shirt. It’s like they were speaking different languages.
According to a 2009 poll of CFOs and CMOs conducted by Xerox and Coleman Parkes, there’s a disagreement on how much they even communicate with each other. The CMOs in the poll reported sharing more marketing info than the CFOs said they received, while the CFOs said there was more measurement being done than the CMOs thought there was.
In the decade since that poll, a great deal has changed in this relationship thanks to the digital transformation of the modern workplace. Here at Sid Lee, this shift has had a massive impact on not just our day-to-day work but on that of our clients as well. This transformation has created overlaps where we use to have silos, which has drawn all of our C-level executives closer together. But despite that, many of the same issues persist between CFOs and CMOs.
For this reason, we invited some prominent CFOs and CMOs to gather in the same room to see if we couldn’t figure it out once and for all. Together with our partners EY, we convened a panel on the subject at C2 Montréal, the immersive business conference event that explores the intersection between commerce and creativity. The idea was to find ways for the CMOs and CFOs to improve their collaboration within their organizations. Moderating this lively panel was Sébastien René, Partner and Quebec IT Advisory Leader at EY, and Martin Gauthier, President of Sid Lee Montréal and Head of Global Operations, Senior Partner.
Building trust in the boardroom
“We did a survey of about 650 CFOs a couple of years ago and the results really threw us off,” explained René. “We surveyed the strength of the relationship between them and their CMOs and 43% thought that the relationship with their CMO colleague was strong. But when asked about their relationship with their CEO, that number rose to 60%. That’s a very significant gap between two very important relationships.”
The lack of trust runs both ways. According to an Allocadia study on marketing performance management, only 14% of marketing organizations saw finance as a trusted strategic partner, and 28% reported that they “speak only when forced to,” which would be sort of funny if the stakes weren’t so high.
Working the pressure points
At C2 Montréal, these strains were apparent, but everyone was ready to work on them. The workshop began by separating the CMOs and CFOs into groups and having them write down the challenges they faced in their interactions with one another. The answers on both sides seemed to break the ice, producing rounds of knowing laughter all around.
“CMOs have trouble spending within their limits, so a lot of the time we cut the budget in half because we know you’re going to ask for double!”
“Well we just love it when CFOs weigh in on the creative!”
“CMOs need to accept that they don’t always get their KPIs right!”
Philippe Cloutier, Senior Vice President and CFO at Videotron, got in one final shot:
“We all know that CMOs can be very creative when it comes to explaining their misses!”
Jokes aside, it was easy to see why these specific C-level executives have traditionally found themselves on opposite ends of the boardroom. On the CFO side of the room they began by writing ROI in huge red letters on their board, noting it as being one of their main pain points. From there they created a list that highlighted the issues on their end:
- Different ways of defining success
- Overreliance on short-term growth
- Tension between volume > margin
- Lack of common tools
The CMOs also had plenty to say. They similarly pointed to the tension between short-term and long-term goals and agreed on the issue of how difficult it can be to quantify the ROI on certain creative elements. Additionally, they mentioned:
- Marketing is always the first budget to be cut
- Finance is overly risk averse
- Marketing is seen as a service, not a strategic role
- CMOs serve clients, CFOs serve shareholders
- No common language (difference in culture and vocabulary)
Getting corporately creative
As the two groups came together to look over each other’s boards, the role of creative process in both of their workflows was raised.
“There’s something at Sid Lee that we believe is very important,” said Gauthier. “Sometimes people think that creativity is a department, but this is not the way to think about it. Creativity is everywhere and should be everywhere in your organization.”
To highlight this idea, EY’s CMO Erin Rogers took the microphone to explain her evolving relationship with the firm’s CFO Alan Smith.
“When we first started working together, he saw marketing mainly as a cost centre, but he’s a creative, agile thinker and he’s evolved,” said Rogers. “At the end of the day we’re both accountable to the same person so it’s in our best interest to work together. And one thing is clear: the age of digital has disrupted us both equally.”
This notion of digital transformation and its ability to stretch across multiple sectors in an organization was a common idea brought up by both sides as a way to bridge the gap. But it was far from the only one.
Finding common ground
Shared data: One of the most efficient ways to find common ground is through data. The right data from multiple sources, across multiple touchpoints, allows an organization to better measure and analyze in order to find meaning and insight. It helps everyone align the story and create real, personal understanding that’s free from opinion and bias. Become a data-driven decision centre.
Be part of each other’s planning: Have diversity of thought at the table from the get-go. Invite each other into the tent — bring the CFOs into brainstorming sessions and bring CMOs into the loop before the quarterly report. Take time to talk about each other’s pressure points, and find ways to collaborate and discuss to determine KPIs that work for everyone. Understand all stakeholders, be they customers or shareholders. Be part of each other’s process.
Get agile intelligently: Being nimble only works if it means something more than just “less expensive and less oversight.” Find ways to be more mistake-tolerant — which areas are flexible and which are not? — while keeping to the same overall strategic orientation. Work together to find the right line between the increasing amount of risk and reward.
In the end, it’s about getting onto the same page of the story that your company is trying to tell. It’s about building a more forward-looking, innovative and creative financial function and making a creative department with better operational efficiency. All told, it’s simply about finding a way to define success in the same way. It will certainly be easier than getting your CFO and CMO to agree on the company dress code.
