← CMO Confidential
CMO Confidential
Richard Sanderson | A Rapid Evolution in the Marketplace - The Spencer Stuart 2025 CMO Study
00:43:26
Loading summary
Transcript75 lines
- [00:00]
Mike Linton
The CMO Confidential Podcast is a proud member of the I Hear Everything Podcast Network. Looking to launch or scale your podcast, I Hear Everything delivers podcast production, growth and monetization solutions that transform your words into profit. Ready to give your brand a voice then visit iheareverything.com Discover the future of AI powered digital experiences Adobe Summit is live in Las Vegas March 17th through the 20th. If you can't make it to the conference in person, join Summit online free from anywhere. Access inspirational talks from global brand leaders like Coca Cola, Unilever, Marriott and more in live streamed insightful keynotes and Adobe Sneaks co hosted by comedian Ken Young. Select from over 30 expert led sessions. Register for free@adobe.com Go CMoConfidential welcome to.
- [01:03]
Richard Sanderson
CMO Confidential, the podcast that takes you inside the drama, decisions and choices that go with being the Head of Marketing. Hosted by five time CMO Mike Linton.
- [01:16]
Mike Linton
Welcome marketers, advertisers and those who love them to Chief Marketing Officer Confidential. CMO Confidential is a program that takes you inside the drama, the decisions and the politics that go with being the Head of Marketing at any company in what is one of the most scrutinized jobs in the executive suite. I'm Mike Linton, the former Chief Marketing Officer of Best Buy, eBay, Farmers Insurance and Ancestry.com here today with my guest Richard Sanderson. Today's topic A Rapid evolution in the Marketplace. The Spencer Stewart 2025 CMO study. Now, Richard began his career at Russell Reynolds and Booze and Company and he moved to Spencer Stewart where he leads the marketing, communications and sales practice. He's kind of a big deal. He leads approximately 25 searches a year for CMO, CRO, CCO and sales sales leadership positions. And Spencer Stewart just completed their annual study of marketing across the Fortune 500. FMO Confidential is delighted to be the first to discuss these results with Richard. Full disclosure, we've known each other for quite a while as Richard recruited me to the Alworth Financial Board and this is his third time on the show. Welcome back Richard.
- [02:39]
Richard Sanderson
Thank you Mike. Third time Do I get a participation trophy? Now finally from CMO Confidential, as soon.
- [02:45]
Mike Linton
As we make mugs we will send you one. So I hey so thanks for joining us on this on this topic. We think it's an awesome topic. And before we dig into the 2025 study, let's talk about why Spencer Stewart does this study and what you have seen over the 20 plus years of doing it since since you all originated it.
- [03:08]
Richard Sanderson
Well, thank you. And look, a lot of the Credit, if I can say out of the gate, goes to my colleague Greg Welch. Many people listening may know him. He is the godfather, if you like, of CMO leadership and advisory services. And he started this concept back in, I think it was 2020. This is now our 25th year of doing this. So he goes back.
- [03:27]
Mike Linton
Oh, you met, he started in 2002, right? Yeah.
- [03:31]
Richard Sanderson
When he started back. He started back in 20, sorry, roughly 2000, 2002. Back then, 25th year. He was the brainchild behind this. And at the time there really wasn't any comprehensive data on the CMO role. A lot of it was speculation, it was gut feel, it was gossip. And this was an attempt to try and put a data based framework around what is happening to the Chief Marketing Officer. It started off exclusively looking at tenure, so how long were people in roles? But the data we look at now is expanded much beyond that, Mike. And I'm sure we'll get into that during this conversation today.
- [04:06]
Mike Linton
Yeah, and you, you guys have brought it into a deeper. You ask more and more questions, they get deeper and you broaden the survey results as, as well in terms of more people are participating now, right?
- [04:17]
Richard Sanderson
Yeah, that's right. So we have evolved the data set over time. I mean, just to be clear about what this is, the data set we're using is the Fortune 500. So to be clear, this is the largest 500 companies in the US by revenue. It's therefore focused on large cap, publicly traded businesses. I recognize it doesn't capture some of the trends happening with say private equity backed businesses or small cap or early stage businesses. But nonetheless, when you use the Fortune 500, it's a stable number. It allows for analysis over time. And importantly, what it also allows us to do is we can do analysis of Chief Marketing Officer roles versus other functional and leadership roles. So at Spencer Stewart, we are making now analyses of all the C suite roles. And for the first time for the last few years, we're now able to put what is happening to the Chief Marketing Officer role in perspective to everything else that's going on in the C suite. And I think that's really the power of the insight there.
- [05:16]
Mike Linton
So I love that. Let so 2025, hot off the presses. Give us the Richard Sanderson top lines.
- [05:25]
Richard Sanderson
Okay, so I'll give you three headlines and I'm sure we'll go into a little bit of details on each of them. Look, number one, the average tenure of the Chief Marketing officer in the Fortitude 500 this year is 4.3 years. Now here's the honest truth, Mike. I don't think the tenure story is that interesting any longer. The tenure of a CMO is actually much more stable than people realize. And for the last five years, it's hovered between 4.2 and 4.5 years. What's more interesting, and I hope we have a chance to get into this, is when you compare it to other C Suite world and when you break it down by industry. But topic number one is 4.3 years average tenure. Topic number two, which I think does come as a surprise to people, is a full one third of the Fortune 500 companies do not actually have a Chief Marketing Officer. There's maybe a perception or belief that every company has a Chief Marketing Officer. That is not true. And indeed, we have seen a number of eliminations of the role and we have seen some big differences by industry. And again, we can get into that. And related to that is probably the third headline I'll give you which is related to the evolution of the role of the companies that do have a Chief marketing officer. Only 40% of them are actually called Chief Marketing Officer. I mean, now we're seeing a large chunk that are. I'll give credit to Lisa Mann at Reins International. I first heard her describe this. They're CMO and roles there. Now a few things are being. Other functional areas are being tacked onto this. There's another large chunk where we've seen a real growth towards Chief Commercial Officers, Chief Revenue Officers, Chief Chief Growth Officers, Chief Experience Officers, what I'll broadly call marketing adjacent titles. And then there's another set of folks that actually don't have the word chief and the title at all. They may be SVP's of marketing and some other functions, but this concept of title evolution has become really quite a significant feature. And right now a minority of marketing leaders even have the title, the sole title, Chief Marketing Officer.
- [07:30]
Mike Linton
So this is, this is super interesting because what I'm going to say is tenure is relatively stable, but the role is evolving at speed and it's consolidating and absorbing and changing title. What are the pressures that are causing the title change? And what I'm going to call the absorption of other functions into the role or marketing into other functions.
- [07:54]
Richard Sanderson
Yeah. So first of all, I would say this 4.3 number is not a bad number. I know there's this sense or the concern that, you know, this is a revolving door and CMOs are out of the job before they've barely got a chance to get their feet under the table. And the data would suggest. Look, that's actually really. Not that. Not that true. We are seeing some real differences though across industry. If you look at that 10 year number.
- [08:19]
Mike Linton
Yeah, let's look at that.
- [08:20]
Richard Sanderson
Yeah. The lowest tenure you actually find in consumer businesses. The average tenure of a chief marketing officer in a consumer business, it's under four years, it's 3.9 years. The highest tenure is actually in healthcare. So you see the average tenure of a chief marketing officer there is 5.3 years and financial services is pretty high at 4.8. So you're seeing some real differences across industry. And people may ask, well, what's going on in consumer that's causing the tenure there to be so low? I have had a theory for a while and we do track this and we'll talk about it in the release this year of the data that in consumer in particular, the marketing role is actually a platform role onto arguably bigger or better roles, either within their business or they're moving on to another bigger or better role somewhere else. Indeed, as we've tracked this and we look at chief marketing officers who leave their role, we are finding in the last year 65% of exiting Fortune 500 chief marketing officers were either promoted to a new role within their current company or they moved to a role in another company or in a lateral or a step up position. In other words, the marketing role is a platform role onto something else. It is not the end of your career. Now that I believe is more true in consumer where those roles, particularly in consumer package companies, have been groomed as general management roles, P and L roles. So this is where I sort of encourage people this number. Low tenure is not a bad thing. I have been at pains to dwell on this fact. We should not view short tenure as failure. That is not the case at all. In fact, in many instances, particularly in the consumer industry, I would actually argue short tenure is a measure of success because these folks are being identified for bigger and better onward roles.
- [10:10]
Mike Linton
And when you say platform, is that because these people, particularly in consumer, are getting deeper, broader training than other CMO roles? Or is that because that's where the talent usually just gets groomed the most for the bigger job?
- [10:26]
Richard Sanderson
We look, I think candidly, we do see it more in consumer more broadly. I mean, we do track also, for example, the chief marketing to chief executive officer role. How many folks are making that leap? And look, it happens. It happens quite a bit. I mean, even just in the last few months, you know, another great example, Michelle Peluso, who was, she's been a multi occasion chief marketing officer. She was the chief customer officer at cvs. Just appointed CEO at Revlon.
- [10:56]
Mike Linton
Yeah.
- [10:57]
Richard Sanderson
Brady Brewer who was the chief marketing officer at Starbucks has moved, I think he's moved into the CEO of the international business at Starbucks. I mean these are great examples in these cases. These are examples of you know, consumer root up marketing leaders. But this is the point and when I talk about a platform role, if this is a way station, if you like, that gains you broader experience, closeness to the, to the customer that is actually very helpful and very powerful in onward general management and in some cases chief executive officer roles.
- [11:27]
Mike Linton
Nice, thank you for that. Let's talk about. Well first, is there any other big gaps between like B2B and you know, B2C or anything that you're seeing? And, and why the long tenure in health care? Because that's like over 20% more than. Yeah.
- [11:45]
Richard Sanderson
So I mean I have a theory, I mean in healthcare and I think we have to be honest with ourselves for a moment, the marketing function plays a different strategic and commercial role than it does I think in consumer businesses in many cases. I'm going to pick my words carefully here. Marketing is more of a support function than it is an enablement or a growth function. Although I have to say that is rapidly changing in healthcare. That's a podcast for another occasion I think Mike. But the reality is the CMO role in healthcare, particularly in some healthcare providers, may actually be the pinnacle of someone's career. Whereas in consumer, I would actually argue it's a waystation along the way. And so to me it may not be as surprising that you're seeing longer tenure in health care than you are in say consumer.
- [12:35]
Mike Linton
Helpful. Thank you. Can we flip to the. A third of the companies don't have a marketing or CMO role. And how do you feel about that? Is that trending down and, and what's going on there?
- [12:51]
Richard Sanderson
Yeah, so at first I think this is actually probably the most shocking number. A full third of companies don't have a chief marketing officer. I assume zero companies don't have a chief executive officer. I assume zero companies don't have a chief financial officer. I'm pretty confident in saying the overwhelming majority of companies probably have a chief HR officer and a general counsel or even a chief information officer for that matter. But to find that a third of companies or our largest companies don't have a chief marketing officer. What's going on there? And again we are seeing some big differences across industries. Again, not to pick on industrial, but I will 49% of industrial businesses do not have a chief marketing officer. That is by far the biggest standout. On the other hand, only 20% of TMT. So technology, media and telecom companies don't have a chief marketing officer. So we're seeing wide, wide differences in industry.
- [13:47]
Mike Linton
Hey, Richard. And when you say industrial, give us some examples of what Chevron companies are.
- [13:53]
Richard Sanderson
So I'm going to pick like a great example. Very few of the oil and gas businesses, for example Chevron, various petroleum businesses. I was looking at the data last night. Lockheed Martin, for example, Northrop Grumman. These are large important companies, but they're making fighter jets, for example, or drilling for oil. And look, the role of CMO is just not needed at the C suite level in those businesses. Here's the important point I would make. However, the lack of a CMO does not mean, in my opinion, that marketing is not important. What it actually means is. And this is what we find when we dig into it. Marketing leadership manifests itself really differently. And this is where I think what's been fascinating for me and my colleagues over the last year or two, some of the most interesting conversations that we have had with our clients is about organization structure and where should marketing sit and what should the scope of those marketing leadership roles be. So let me give you an example. I think the most common discussion we have with our clients around marketing leadership structure is should the role be centralized, should the role be decentralized, or should it exist in some hybrid structure? And what does that mean as to whether we should have a chief marketing officer or not? The most obvious example I think most of us think about with a CMO is it's a centralized, decentralized business. So you have enterprise level capabilities and you have a CMO who's responsible at the center for brand creative, digital data, growth initiatives, analytics, sponsorships. And so, you know, you have a very clear structure. And there's a number of many businesses have that structure of a centralized CMO. AT&T has essentially moved to a centralized structure recently under Kellen Kenney. Allstate has this under Elizabeth Brady, BlackRock, SAP, Charles Schwab, Goldman Sachs. They all have very centralized capabilities. And you will find an enterprise level CMO in those roles in those businesses. There are other companies that have chosen to operate in a decentralized structure. And what that means is marketing exists, but it's typically wholly owned either by a business unit or by a geographic region.
- [16:06]
Mike Linton
Right, or by regions or. Yeah.
- [16:10]
Richard Sanderson
So particularly for large global businesses which may choose to organize themselves and run the P and L by geography. They may, they, they have marketing leaders, but it sits in a business unit or a region. There just may not be an enterprise level role reporting to a CEO. And then of course, where we're seeing companies fudge the difference and we're seeing a lot more of this now are these hybrid structures where you may have a center of excellence model and you may have business unit marketing reporting directly into their business units or to some sort of enterprise marketing or brand leadership role. I mean, a great example would be JP Morgan Chase. You've got Karla Hassan in the enterprise role. But the reality is it's kind of a federal structure is my understanding of JP Morgan Chase. They have a number of business units, each of which have their own CMO with a high degree of autonomy and decision rights and their own structure with some layer of centralized support or center of excellence model at the middle. So the issue here, Mike, is again, as I said, with tenure, we shouldn't mistake these low numbers for lack of importance or marketing just doesn't matter. It's really a function of marketing. Organizational design is driven by desired outcomes and organizational scale. And that's the takeaway, I think. It's not doom and gloom. It's not marketing is over and these roles are going away. That's not the case. They just live in different forms and structures.
- [17:33]
Mike Linton
I'm happy about all these people getting promoted to bigger jobs and people recognizing this. Can we talk though about in the last couple of years there's been companies and I'll just specifically say Lowe's, McDonald's and Starbucks, that they went one way with the marketing job and then a year or two later they went the other way. What's up with the those kind of head fake moves by these very, very large companies?
- [17:58]
Richard Sanderson
Yeah, so, okay, so you called out a couple of interesting examples. So if I recall correctly, I think Lowe's eliminated the Chief Marketing officer role in 2022 when Marissa Thalberg left, only to bring him back two years later in 2024 when Jen Wilson was internally promoted and elevated into the role. I think Etsy has recently done a similar thing. The role eliminated when Ryan Scott left in 2023, they reincarnated the role in a Chief Operating and Marketing officer role with Raina Moskovitz and she just left to become the CEO of the Knot. And now they've moved back to a CMO structure and internally promoted Brad Miner into the role, most famously of all, Coca Cola. This did cause a lot of pearl clutching. They eliminated the role in 2017 replaced it with a Chief Growth Officer and now they did come back to a global Chief Marketing officer role in 2020. UPS and Walgreens both eliminated the role I think in the same week. In late 2023, Starbucks took out the role when Brady Brewer, who we mentioned earlier, moved to the CEO of International. Now under the new CEO Brian Niccol, they've brought it back in the form of a Chief Brand Officer. Gosh, there's a lot of comings and goings.
- [19:10]
Mike Linton
Let's talk about this though, Richard. From a, from a. Because the businesses are still roughly the same. Is this because the leaders are changing or is the marketplace changing?
- [19:21]
Richard Sanderson
In some. I think it's all of the above and then some more. Mike, I think look clearly at Starbucks, I think you're seeing with Brian Nicol, he's got a view on what he wants marketing to look like and he's reinstated this role in the form of a Chief Brand Officer. I do think, I mean when we talk to our clients around when they're either creating this role or redesigning this role, I mean essentially it comes down to we have this 4S model. If I can just sort of share some sort of proprietary thinking, I mean it's not shocking, but the four S's are, what is your structure? What is, what is the strategy, the structure, the scope of roles and the skills required? These are the sort of the four S's that go into how do you construct really any form of go to market role? Most commonly it manifests itself in marketing. But this, this applies to these chief growth, these chief revenue, these customer commercial officer roles. And it's some function of like what is the structure that's right for you? Going back to this centralized versus decentralized versus hybrid. What is the scope of role? We've spoken about these sort of and roles and I do want to come back if I may and just talk about the evolution of these Growth officer, commercial officer role. So in what form should marketing exist and then what are the skills you're going to need to be successful in this and overall is it driven and does it align with the strategy of the business? I think we live in very volatile times, Mike. There's a lot of change taking place and so I do feel it's almost like a bit of a pendulum. You know, companies go back and forth on their, on their org structure. Some of it is dependent on a certain moment in time, a certain CEO, a certain leadership team, a certain value creation proposition. And what is the right structure and the right leadership team to support that.
- [21:06]
Mike Linton
So you have to be pretty nimble if you're a CMO looking at these things to make sure you've got all this timing right. Let's go to the part you were just referencing, if you don't mind, which is, you know, marketing becoming part of other functions. Functions or other functions becoming part of marketing. The dynamics there and what you think is going to keep happening.
- [21:28]
Richard Sanderson
Yeah, so, so we're talking about things like the Chief Growth Officer. This first came about in consumer products. I think I first remember seeing this in some detail around 2013. We saw a wave of CPG companies. You know, they were struggling with growth. The irony here is Mike, for most of those companies that created a chief Growth officer, it didn't actually result in growth. So simply creating these roles alone, you.
- [21:50]
Mike Linton
Could just say growth and get it. Everyone got that title.
- [21:53]
Richard Sanderson
It's really not that simple. But that was an attempt to bring together at least fuse the levers that can drive growth in a consumer products business. So it was marketing, R and D insights, innovation, even in some instances an inorganic growth. So an acquisition agenda was even seen in the broadest manifestation of these roles. The Chief Commercial Officer role has become very common in hospitality businesses, which is essentially a combination of sales and marketing. Hyatt with Mark von Drac who's been in that role for a long time now, Marriott as Peggy Rowe in this much broader than just marketing type of role. The Chief Revenue Officer role has become exceptionally common in aspects of technology, particularly software businesses. My favorite example, if I may share one with you, is the retail industry which may be near and dear to your heart, which is the Chief Customer Officer role. And we have found, you know, at least now, half of retailers of scale have experimented with some version of a Chief Customer Officer role. And, and I always get asked, well what the heck is a Chief Customer Officer role? So, so here's what it is. I mean I think of it. There's various building blocks. What we find in all these Chief Customer officer roles. There's what I call table stakes. So all these roles have this, they have brand creative, media insights, analytics, customer experience, digital marketing, customer strategy. That's sort of table stakes. Then you start getting these add ons and I'm calling These sort of CMO+ or even CMO roles. The CMO+ typically will add in things like or the Omnichannel or the multi channel activation. They'll link the physical and the digital assets. In some instances the E Commerce P and L may be within scope of the chief customer officer. Sometimes retail design and assortment is in there. Many retailers are looking at strategies to monetize first party data. The growth of retail media networks, some of that will often fall within the chief customer officer role and in its broadest context. I only saw this with one person. That was Michelle Peluso at CVS for a while. She also had store operations. So really the customer experience including you know, the in person touchpoints in the store, that's what's going on in, in, in, in retail.
- [24:09]
Mike Linton
And Richard, is this, is this, are we looking at the CMO title as something that's going to go just out of vogue as, as, as more and more people, you know, become like I was a chief revenue officer and some other stuff. Is, is, is the CMO job gonna, gonna disappear and, or just, or just be renamed?
- [24:31]
Richard Sanderson
Well, that's a really important question Mike. I mean I have been of the view for a while. We are at this moment where we're seeing, are we at risk of seeing, let me put it this way, evolution or extinction? Right now the data which I shared with you earlier would suggest where the role, where the marketing role exists right now only 40% so now less than half actually have this straight chief marketing officer role. So we are, we are now in the majority of cases looking at some CMO plus type role or this evolution into this broader growth customer revenue type situation. The reason why Mike, it doesn't concern me is that this is the best thing that ever happened to marketing leaders. Your role, if you do all the right things is going to get bigger. This is the golden age of marketing. I've felt this for a long time. I really don't have that much tolerance for the woe is me. The role is going away. What's happening. It's like guys, step up. You've had, you've never had more opportunity to have strategic and commercial impact and influence on your business than right now. So embrace it. And if you don't, then you should be worried.
- [25:42]
Mike Linton
I like that. And we did all show on this with you that I will reference on the outro but so am I. Are we going to see a lot more marketers or whatever they're called in the future on boards given this kind of evolution of you know, marketing and sales, how people are thinking about things.
- [26:03]
Richard Sanderson
So this is so this legitimately, Mike is a sore spot I think for marketers.
- [26:08]
Mike Linton
Again, I'm just telling you it is a super red hot, I know angry about it sore spot.
- [26:16]
Richard Sanderson
It comes up all the time and if I saw, if I was given a dollar for every time I saw someone post something on LinkedIn around how a CMO can get on a board, I'd be a very wealthy individual right now. There's a lot of, there's a lot of cottage industry around there. On this, on this topic we have looked at this twice I think over the last five or seven years just to get a data point around how many sitting marketing leaders are on. I think we looked at the S&P 1000. So the largest 1000 companies by revenue. It's a depressing number. I mean I'll just tell you, I think when we looked at it Pre Covid was 37.
- [26:49]
Mike Linton
Look, it makes you want to go to the dentist for an uplift.
- [26:51]
Richard Sanderson
Is that when we looked at it? I think we last looked at it two years ago, that number decreased from 37. So brace yourself, 41. I mean we are, we are not talking, we are not talking large numbers. And when you remember that's the numerator, the denominator here is, you know, it's a thousand companies we looked at, let's say on average they have 10 seats, that's 37 or 41 out of 10,000. That's less than 1%. It's depressing. Now here's where we do see it work. So remember what the data I shared with you was the S&P 1000. It is true for the largest companies. The candidate profile for a board seat is depressively similar. It's, you know, go find a CEO or a former CEO or a CFO who we can put on the audit committee. There's a lot of that that goes on. Or go and find us a four star general or you know, whatever it may be that we can, we can, we can put on or a university, you know who the forte General university chancellor, CEO, cfo. I mean that, that's, I'm stereotyping here. But, but you know, when you look at the largest companies, the celebrity companies if you like, that's what their board looks like. Here's where CMOs do have a lot more success in the middle market.
- [28:06]
Mike Linton
Yeah.
- [28:06]
Richard Sanderson
And for private equity backed businesses that may not be public businesses, they may be private. And you, you obviously, you obviously know this personally firsthand. Mike.
- [28:14]
Mike Linton
Thank you.
- [28:14]
Richard Sanderson
I mean even just in the last few weeks and months, you know, I personally keep track of CMOs who make it onto boards just recently. So Corey Marchisotto, the chief marketing officer of Elf Beauty, she's just joined the board of Dutch Brothers. Diana Frost, the Chief Growth Officer of Kraft Heinz, has just joined the board of Wayfair. Kevin Warren, who was the CMO of ups, has just joined the Board of Assurance. Allison Lewis, who I think has retired now as the Chief Growth Officer of Kimberly Clark, has just joined the board of Hayden Celestial. Laura Jones, the CMO of Instacart, is on the board of Match of Match Group.
- [28:45]
Mike Linton
You got to keep the pressure on though, Richard. You got to keep the floor for us marketer.
- [28:50]
Richard Sanderson
So the point to make is twofold. There absolutely is room for CMOs on boards. But my personal advice when I speak to CMOs about this is don't waste too much of your time on trying to get on the board of Berkshire Hathaway. It's not going to happen. It's just not, however, target. It's really the middle market and the private equity boards looking to bring in some professional points of view. The second bit is where we do see a lot of CMOs on board is when they've actually moved out of the CMO role and have moved into a president business.
- [29:20]
Mike Linton
Right.
- [29:21]
Richard Sanderson
Move it into another role. So I'd simply say think about the timing. Spencer Stewart also publishes a lot of data on board roles. The average age for joining a board role is surprisingly high. You know, don't forget we are also looking again at the Fortune, I think it's the Fortune 500. So it's a slightly, you know, more August crowd. Even the average age for joining your first board is well into your 50s. So, you know, a lot of it is pace yourself, be realistic about when it's going to happen. Honestly, board roles don't come open that often. When you look at the Fortune 500, maybe one board seat a year comes open. There's just not that many seats being, being filled. And so target middle market. Think about private equity or other private situations where you can get your foot in the door and work your way up that way.
- [30:07]
Mike Linton
Let me flip the topic a little bit and go to AI. You know, we can't do a show without talking about AI. One of the things that AI is doing though is it's taking a lot of entry level jobs out or it's going to, you know, particularly marketing agencies, everything else. How is this going to affect career development and you know, eventually translate to your, you know, CMO study 10 years from now. What, what do you think is going on there?
- [30:35]
Richard Sanderson
It's, there's so many ways to go with this AI topic. I mean, first of all, again, we're not going to cover it in this show. But what is the current state of AI and marketing? I've got some thoughts there. What are marketing leaders? Are we seeing some segmentation already? And I owe a big debt of gratitude to, to Vikram Batra, the former CMO of HP for this. So I mean he, he, he talks about CMOs as being either ostriches or wolves. So ostriches are the ones that have their head in the sand and they're avoiding AI a little bit due to the fear or the lack of knowledge of AI. Or he classifies CMOs as wolves. Those that are embracing AI and really leading the pack on this. I think there's the biggest challenge, honestly we see on this leadership topic, Mike, and again, I thought Vic put this best, is the concept of the cold start problem. AI has already become such a massive area with so many areas of impact, we're finding many CMOs just are uncertain even where to begin their AI automation.
- [31:42]
Mike Linton
They're frozen.
- [31:42]
Richard Sanderson
They're frozen. And so, and the message is here you've got to put in place a strategic framework around this. Rather than just doing random acts of AI and hoping for the best, increasingly you've got to put a strategic framework around this. Now where this relates to my business and what we're seeing is so what does it mean for the future or future opportunities related to AI in marketing? What is it going to do to roles around data analytics, content generation, a lot of these performance marketing or media roles? What does it mean for SEO strategies? I mean, so much of this has the potential to be disrupted or at least AI influenced or AI generated. I think we're going to have to rewrite job descriptions and desired outcomes in the job descriptions. I'll be honest with you, Mike. I'm not seeing a lot of mention of AI in job descriptions. I think, I think because we, a lot of it is what are the expected outcomes, what are the skills required to get there? I think the jury is still out actually on, you know, what is the desired, the desired outcome. If you ask a CFO in a business, you know, their, their answer that may focus on marketing efficiency and effectiveness and you know, what can we do to the budget? If you were to ask someone else, you're going to get a radically different answer around what you expect AI to do for marketing and how marketing leadership should deliver on it.
- [33:06]
Mike Linton
We'll bring, we're going to bring you back next year to talk about this, but I, I want to also, I want to close out on the study a little bit and then go back to careers. Is there anything in the study we haven't talked about that you think would be super interesting or just generally surprising that you want to share with our listeners?
- [33:28]
Richard Sanderson
Yeah. I'll give you two things. The first one, I think of it as the diversity paradox. And what I mean by that is I'm not sure if people are aware of this, but I can tell you it is official now. The chief Marketing officer role is predominantly a female held role. In our study, 53% of sitting CMOs and the Fortune 500 are women. By the way, there has been a massive pendulum swing on that to the positive. In 2020 it was 41%. So in the space of four years it's been a big swing. A big swing to the point where now the majority and this trend is not, I don't think is going to dissipate. I think you're going to see this become a very much a female led function. Here's the other side of the paradox where the needle has not moved is on ethnic or racial diversity or representation from historically underrepresented groups. That number has stubbornly stayed at 12% and it's really not moving. And that is a little bit disappointing if I, if I may offer that opinion. So on the one hand, so that's why I call it a paradox, the gender side has, has, has, has really evened out. The, the, this concept of historically underrepresented groups in marketing leadership has not and that remains a problem and it does need to be addressed. So that's topic number one. Topic number two is there's this sense of, gosh, all these CMOs that are coming in from the outside. One of the things we measure and have been measuring now for the last few years is what is the percent of external hires. So in other words, how many CMOs are brought in from the outside? I think the concern that I have heard particularly from number twos in marketing organizations is I'm not being given a chance. They're always bringing in someone in from the outside. When is it my chance or my opportunity to step up? The data on this is pretty consistent. At least in the Fortune 500. The number this year only 42% of CMOs are external hires. What that means is the inverse of that is the majority are more than half.
- [35:36]
Mike Linton
More than half are coming from.
- [35:37]
Richard Sanderson
More than half are internally promoted. Now here's what's going on. Of course it's the big hirings and the big firings that get the news. But quietly, most CMOs are internal promotes into the role. Look, I have seen some Silly numbers from other, other unnamed firms and outfits suggesting as much as 80% of CMOs are external hires. I know why they're doing that. It's because they're relying on press releases and publicly available data to do this. When you actually look at a stable data pool, which is the Fortune 500, and look individually at every single one, how do they get into the role? The majority are getting that internally, which.
- [36:14]
Mike Linton
That makes sense if you got a fortune 500 and a good leader. I mean, well, right.
- [36:19]
Richard Sanderson
I mean, you would hope in the larger companies they could do a much better job of succession planning. I would imagine once you go outside of the Fortune 500, that percent of external hires goes up. But at least in the big companies, the majority are internal promotions. So I want to dispel this myth that, you know, I don't have a chance. You absolutely do. You absolutely do. I mean, I think you want to be developed in the right way. But most folks in the CMO role in Fortune 500 were internally promoted.
- [36:44]
Mike Linton
But inherent in that is if you're in a big training company you have or a big company where you can afford the bench and afford the talent, you have a better chance of internal than if you're in a smaller company where you're not getting the training and other stuff you. Then there's a way better chance you're gonna.
- [37:07]
Richard Sanderson
And not only that, Mike, actually in a CMO role. Again, the beauty of the Fortune 500, we can compare it to other functions. The function that is most likely to be hired externally in the Fortune 500 is the Chief Information Officer. 57% of all sitting Chief Information Officers in the Fortune 500 were externally promoted.
- [37:25]
Mike Linton
That's a lot.
- [37:26]
Richard Sanderson
The next one is the general counsel at 52%, the least likely the CEO, because that's the role the board has to get right and they have to get the succession planning. And the percent there is way down low 20s.
- [37:38]
Mike Linton
One of the biggest jobs of the board is to make sure is to.
- [37:41]
Richard Sanderson
Make sure you get the CEO succession rate. So you do see some big differences there. The C suite average is actually 43%. So at 42%, the CMO is right on the average. There's nothing unusual about that role on.
- [37:54]
Mike Linton
A base of 500. Hey, one, one thing before we go to our traditional last question. When you look at CMOS, when you're doing this study 10 years from now, what should people be working on now from a skill set development, I know you had your four S's, but the cmo, the future, what's it going to be like and how can younger people be preparing themselves for it now?
- [38:20]
Richard Sanderson
So I'm going to give you the perennial answer that really has nothing to do with anything.
- [38:24]
Mike Linton
Spoke I'm clutching my pearls.
- [38:27]
Richard Sanderson
Okay, you know what it's going to be? I mean it is this sense of, of leadership, of, of learn. And I think it's particularly more challenging when we've been in a world of remote and hybrid working. At the end of the day, why here most of all about from CEOs about their CMO owners. I need a strategic partner. I need someone who can bring us vision. I need someone who can execute it. I need someone who can inspire the team and develop the next generation of leaders within our business. It is this, this, this sense of leadership, this perennial sense. Look, we're not capturing this concept of leadership in a CMO 10 year study, but I do just remind folks, there is this sense of increasingly executive poise, maturity, leadership. That's what I find makes the difference when we're doing these searches. I always say to people, look, it's your resume that gets the foot in the door, but it's the chemistry, the culture and the leadership profile that gets you the job. And I still firmly believe that to be the case. So even as all these marketing roles evolve, even if we talk about AI and all this kind of stuff, what doesn't change is the sort of intrinsic leadership capability.
- [39:38]
Mike Linton
I think a great segue to our last question. And you know what it is the two parter practical advice we haven't talked about yet and or funniest story you can share on the air with our listeners. You can pick both or one, but you have to pick at least one of that part Question.
- [39:58]
Richard Sanderson
So this is my third time, Mike, I think I've given you all the funny story that I can share on air. So I'm going to get the horses. This time I had to revert to practical advice and you know, it's interesting. So you know, here we are recording and broadcasting this in March. You know, Q1 for us is always interesting because there's a lot of movement in the market. And I found this to be particularly true around late 2024, early 2025. We've had a lot of spike in job seekers or folks that have changed roles, sometimes voluntarily, many times involuntarily. And so, you know, there's a lot of counseling that goes on. I find this time of year and the practical advice is this, particularly for those that are between situations or there's been Some sort of unplanned or involuntary change. And the practical advice is this, remember, the journey you're on is, is very typical and is very normal. And the journey is an emotional journey. There are these various stages I think you go through when you've left a job that maybe for not reasons that you, that you wanted to happen, that you go through stages of first of all anger, then maybe a little bit of denial, then grief and then, you know, and then, you know, it's always darkest before the dawn and then you pick yourself up a little bit. And I'd simply say to people, and particularly for senior leaders, many of the folks that we're dealing with who have often, sometimes in many cases never been out of work before, this is actually quite traumatic for them. It's simply to say, look, don't worry, this is normal, the journey you're going on. This happens, I think, to everyone. There are many stages of this emotional journey you will be on. There'll be highs and there will be lows. I often tell people, particularly at the C suite level, it is very typical that it could take you six months or longer before you land in a role. And so, you know, don't treat this as some sense of failure on your side. Don't necessarily worry that the phone isn't ringing. I think you do have to make the magic happen yourself. But just this journey that you're on is normal. It's natural. This too will pass and good things will, will, will happen. But just learn to where you can embrace the uncertainty and use that to drive you forward.
- [42:09]
Mike Linton
I think that's a great way to end the show, which is, you know, when you find the person that this has never happened to, remember it's the exception. Not even close to the rule. And stay strong is what I hear you saying. And stay focused. Thank you for that. Thank you, Richard. And thanks to everyone for listening to CMO Confidential. Look for our other shows on Spotify, Apple and YouTube and the I Hear Everything network, which include Marketing the Battle between Believers and Non Believers. Parts one and two. It's a bird. It's a plane. Holy shit, it's AI. Parts one and two. And of course Richard's first two shows titled A Top Executive Search Perspective on Marketing. And it was the best of times, it was the Worst of Times. A marketing perspective. Hey, all you marketers, stay safe out there. This is Mike Linton signing off for CMO Confidential. Discover the future of AI powered digital experiences. Adobe Summit is live in Las Vegas, March 17th through the 20th. If you can't make it to the conference in person. Join Summit online free from anywhere. Access inspirational talks from global brand leaders like Coca Cola, Unilever, Marriott and more in live streamed insightful keynotes and Adobe Sneaks co hosted by comedian Ken Young. Select from over 30 expert led sessions. Register for free at adobe. Com. Go CMO Confidential.