Do firms need CMOs?

By Thomas Barta
Last updated: October 22, 2011

A recent US study has caused a stir: firms with a CMO on the management team are not more successful than firms without a CMO. Do we need CMOs? CMOs now need to prove their worth.

(This is my first ever public blog post).

Professors, Pravin Nath and Vijay Mahajan, wanted to know if firms with CMOs perform better than firms without CMOs? The results of their study in the Journal of Marketing are sending a shockwave through the community: the presence of a CMO on the management team has no effect on the company’s commercial success. Can that really be the case?

Nath and Mahajan took great pains to provide a true representation. They looked at 176 US firms from various industries between the years 2000 and 2004 – a particularly volatile time (9/11, dot com crash, etc.). New propositions and ideas for growth were needed. Lateral thinkers were in great demand. It is precisely in times of crisis and restructuring that marketing could have played a particularly important role. Instead, Nath and Mahajan discovered two things:

Findings of the CMO Study by Nath and Mahajan:

1. The likelihood of a firm having a CMO on the management team increases if: it focuses on innovation, differentiation, brand strategy and diversification, the management team has marketing experience or the CEO comes from outside the firm.

2. The presence of a CMO on the management team has neither a positive nor a negative impact on the company’s commercial success.

Whereas No. 1 is easy to understand, marketers have to find out why a CMO on the management team did not make any difference, at least in the firms examined. The answer to this question is important, because the CMO role is still new in many firms and has to prove itself. CMOs have to ask themselves:

  • Does my presence have a demonstrable impact on the success of the business today?
  • Am I using all possible options to visibly improve the success of the business with excellent marketing?
  • Which levers of success am I not yet using? Where is there further potential?
  • Am I doing enough to show the economic success achieved by marketing?

CMOs at senior management level can increase a company’s success on a lasting basis, but to do this they must constantly use (or extend) the influence of the role. Every CMO must now provide proof to contradict the study by Nath and Mahajan. Then further studies will also be certain to prove that CMOs are important to a company’s success!

Source: Chief Marketing Officers: A Study of Their Presence in Firms’ Top Management Teams, Pravin Nath & Vijay Mahajan (May 2007). Accepted for publication in the January 2008 issue of Journal of Marketing. Pravin Nath is Assistant Professor, Department Marketing, LeBow College of Business, Drexel University ( Vijay Mahajan is John P. Harbin Centennial Chair in Business, Department of Marketing, McCombs School of Business, University of Texas at Austin (