Kathryn Luttner
May 4, 2017

Why Coke, Citi, Mars and J. Crew are placing bets on hybrid CMOs

An era of slow growth and digital disruption has chief executives scrambling to show they're addressing the problem.

Why Coke, Citi, Mars and J. Crew are placing bets on hybrid CMOs

If being a chief marketing officer for a Fortune 500 brand wasn’t stressful enough, they’ve gone and added a little more pressure to the job.

A growing number of blue-chip brands are combining CMO roles with other corporate functions. Last week, Citi combined its global consumer marketing and its U.S. advertising, media and global entertainment groups under one CMO. This follows on the heels of Coca-Cola nixing its CMO role entirely in preference of a corporate growth officer, Francisco Crespo, who will now oversee marketing, customer and sales strategies. And last year, following the retirement of longtime CMO Bruce McCollMars promoted its chief customer officer, Andrew Clarke, to the CMO position, uniting those two roles into one. In April, J. Crew, faced with shrinking sales amid a shift away from mall-based retail, placed stewardship of the brand, including marketing and design, under Chief Operating Officer Michael Nicholson.

The companies creating these positions—call them "hybrid CMOs"—say they are trying to provide a more seamless customer journey in an increasingly digital world. By giving marketing chiefs more power to shape those aspects of the brand previously beyond their control, the hope is that a company can speak with one voice, from its advertising to sales to customer support.

For Coca-Cola, the chief growth officer—a title that's become trendy among brands in recent years—will grow the company by streamlining the business decisions. In February, the brand announced it was restructuring to become a "true total beverage company." 

"This new structure we are putting in place is also part of creating the culture and speed necessary to support our new growth strategy," Coca-Cola President and COO James Quincy said in Coke's corporate blog in April. "[O]ur first goal is to reduce complexity, simplify processes and speed decision making…To keep up with the fast-moving consumer landscape around us, our organization has to be ready and willing to change at a faster pace probably than at any time in our history."

Duane Stanford, executive editor of Beverage Digest, echoes Quincy’s thoughts and sees these factors at work in Coke’s decision to shake up its top marketing role. "There was a time before the recession when everybody was growing sales," he said. "Now you've moved to this environment where there's not a lot of revenue growth. People are trying to steal customers from other companies and get as much share as they can as to what's existing."

In-store sales and product marketing can’t be viewed individually anymore, he said, adding that the beverage giant seems to want a leader who combines traditional marketing with digital innovation and understands the retailers and the customers. "You just need a more all-encompassing view of that, and that's what these chief growth officer roles are trying to get at."

Jennifer Bombardier, SVP of Public Affairs with Citi Global Cards, agrees that "with the rise of digital and mobile as a centerpiece in consumers’ lives, all industries are undergoing disruption." In an effort to keep up, Citi, she says, is simplifying its model, so it can nimbly respond to the digital marketplace. "As a result, customers are finding it increasingly convenient and easy to bank with us," she said, adding that in 2016, American mobile app customers grew by 50 percent. 

Some analysts applaud the changes. Others see evidence of corporate desperation.

"The move to combine the marketing role into other roles—whether the chief growth officer, chief customer officer or in some cases the chief experience officer—is actually a symptom of a bigger problem with marketing," said James McQuivey, Forrester VP and principal analyst, in an email. 

He notes that marketing has typically been limited to creating a brand’s messaging and not responsible for directing the organization’s strategy. "That won't suffice anymore as customers are coming to expect a single experience from a brand across messaging, sales, purchase and post-purchase support," he said. "But how can a company coordinate that experience when nobody in the organization currently owns the customer's entire journey?"

Shar VanBoskirk, also a VP and principal analyst with Forrester, said it makes sense for marketing to own the other aspects of the customer journey. "The future of marketing is not just about creating great customer experiences everywhere, it is about demonstrating a firm's brand promise through great customer experiences everywhere—with a product, in a store, at a bank branch, checking in for a flight, on a mobile app, using a tablet, calling customer service, ordering at a restaurant, logging into your account," she wrote in an email. "This is why, the officer in charge has to be the CMO." 

But these changes aren’t happening in a vacuum. Yes, the rise of digital is driving the need for transformation, but there are other forces at work. As Marc Pritchard, chief brand officer and marketing lead for Procter & Gamble, noted at the 4As Transformation conference in Los Angeles last month, complexity and the lack of growth are forcing both brands and agencies to rethink their approach.

"There's not enough growth. Despite an astounding investment of nearly $600 billion in advertising worldwide, the growth rate of our collective industries is still pretty anemic," he said.

And while the bulk of Pritchard’s complaints about complexity were aimed at agencies, he acknowledged that large brands suffer from the same malady. P&G "fueled complexity by fragmenting and sub-specializing our companies with upstream, corporate, global, regional, local, customer, brand marketing, shopper marketing, influencer marketing, market research, design, communications. With a specialist for everything, it was difficult to determine who was in charge of anything," he said.

The new roles certainly represent a step back from that sort of complexity, as both Coke and Citi acknowledged (Mars and J. Crew declined or didn't respond to request for comment). But where some see transformation, others see chief executives desperate to show stakeholders that they’re doing something—anything—to reinvigorate sales.

"There’s pressure from the shareholders or other constituencies to get greater growth, and because of that, everybody wants to say that they’re leaving no stone unturned," said Cerebral Graffiti founder and former Subway CMO Tony Pace. "People hear things like ‘chief revenue officers’ and ‘chief growth officers’—you can imagine a CEO who wants to say they’re doing everything they can to drive growth. ‘We’ve juggled the responsibilities in the C-Suite to add this level of responsibility, so this gets more single-minded focus.’"

"You need to deliver results when you’re in one of the top jobs. You need people to believe that you’re looking at this with a fresh perspective," Pace continued. "To say we’re going to do what we’ve always done is not a tenable proposition, so this sounds different, and you can say, ‘This is phase one and we’re going to phase two.’"

Even if that is the case, McQuivey notes these signals have a power of their own. "While we don't recommend the creation of new C-level titles all the time, if you can't get your organization to pivot toward the customer using the current leadership titles and organizational silos, then you have to send strong signals as Coke and Mars are doing," he said.

But real transformation takes more than shifting job descriptions, and CEOs need to be as obsessed with sending a message internally as they are to the outside world. "Emphasizing growth in the new title is not enough," McQuivey said. "It's a strong signal to Wall Street, but not a strong signal to the organization that the company will become more customer-obsessed."

Campaign US

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