The Right CEO-CMO Team Could Mean Millions in Brand Value

Hal Conick
Marketing News
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Key Takeaways
​What? CMO tenure, as well as well-fitting CEO, could mean millions more in released working capital, according to a study.

So what? A CEO with prior marketing experience paired with a CMO could mean a $94 million increase in released working capital, the study finds.

Now what? Consistency of CMO tenure and perception of marketing within a company are both good for business. Generalist CEOs tend to be a poor mix with CMOs.
​Feb. 18, 2017

Do your CEO and CMO get along? Their relationship could mean millions in released working capital​

 

CMO tenure and CEO-CMO pairing could mean millions of dollars in capital gained, according to a presentation at the 2017 Winter AMA Conference​.

(Photo: Steve Jobs, late CEO, and Phil Schiller, SVP of marketing, at Apple Inc.)

Tracey Swartz, a Ph.D. candidate in marketing at the University of South Carolina Darla Moore School of Business, says CMO tenure is “economically significant” for capital. While tenure has a negative impact on cost of capital, it could lead to millions of dollars in released working capital.

"The impact of CMO tenure on brand value is positive and longer CMO tenure reduces the firms cost of capital, [which] is a good thing for shareholders," Swartz wrote in a follow-up email. 

The CEO in place matters, too. Swartz, who undertook “What if?” analyses with her colleagues, found that when a CEO has prior marketing experience, and a CMO is in place, there's a $94 million increase in released working capital on average.

When a CEO and CMO had worked together at a prior company, there was a $157 million increase in released working capital

Lastly, when the CEO was more specialized and less generalized and worked with a CMO, there was a $597 million increase in value. Generalist CEOs tend to be a poor mix with CMOs, Swartz says the study shows.

This study, which used data from 126 firms in the services, retail and consumer goods industries, including 271 CMOs and 280 CEOs, also found:

  • ​The average tenure of the CMO is 38 months.

  • Companies had an average of three CMOs over the past 10 years.

  • CMOs are not present at 19% of companies.

  • 36% of CMOs are female.

“A lot of this has to do with how marketing is perceived from within the firm,” Swartz says, adding that consistency of CMO tenure is not only good for CMO performance, but for the company.​


Study Finds One Quarter of CEOs Have a Marketing or Sales Background Deloitte’s First CMO Walks in No One’s Footsteps Gain a Global Perspective at AMA Events

Study Finds One Quarter of CEOs Have a Marketing or Sales Background

Deloitte’s First CMO Walks in No One’s Footsteps

Gain a Global Perspective at AMA Events


 

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Author Bio:

https://auth.ama.org/publishingimages/halheadshotcolorcorr.jpg
Hal Conick
Hal Conick is a staff writer for the AMA’s magazines and e-newsletters. He can be reached at hconick@ama.org or on Twitter at @HalConick.
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