The CMO Council / KPMG found just “22% of CMO/CFO relationships are collaborative”.
The positive spin on this is that there is so much common ground for a CMO and a CFO to occupy.
So why does there continue to be such tension between these two roles, why is the CFO portrayed as the barrier to investment, and why is the CMO not a C-Suite role in all organisations?
In this article, I share what I found to be the most effective ways to build a partnership with my CFO.
In my experience, the most rewarding part of being a CMO is the positive impact you can have on the whole organisation. It’s thrilling to have the opportunity to guide the business toward the biggest brand opportunities and to develop a team to have the right capabilities for the future. But to influence the broader business direction and to maximise commercial execution to deliver the profit target and pay bonuses to colleagues is what is most fulfilling. I have not found it possible to achieve this without the support of my CFO.
In my time at Molson Coors Beverage Company, as CMO and then CCO in Canada, I included the CFO in all of my key leadership and decision-making meetings. Not only did this mean she was abreast of all the challenges and opportunities we were facing, but I also benefited from her point of view and counsel in the moment.
As Unilever demonstrated in their Marketing Week article in September, a business benefits hugely from having an aligned CFO and CMO.
It was clear from reading the article that the CFO and CMO are strategically aligned and working effectively together, which inspired me to post these tips on LinkedIn…
Tips to make your CFO smile and build a close collaborative relationship (CMO/CFO).
- Think about how the brand’s long range plan might be conveyed by the CFO to Investors. Is it a credible story for this group?
- Are the objectives easy to understand externally and across the wider organisation?
- Is the strategy balanced to deliver against the short-term milestones of the business AND the long-term needs of the brand?
- Have you reduced waste and optimised spend by minimising your ‘non-working’ investment? (Unilever states that more than 80% of its marketing spend goes directly into media).
- Are the metrics transparent, consistent and understood by all?
- Is the Plan financially flexible to the extent the CFO can rephrase the spend without impacting the integrity of the strategy?
On further reflection, I felt these were limiting as they were only dealing with marketing issues. When I was operating at my best, I was also demonstrating how marketing can address some of the key business challenges occupying the CFO and other members of the C-Suite.
There was a really interesting talk at the Marketing Society Global Conference by Ben Pearman, VP Managing Director, Europe & Australia, General Mills, who suggested that
“Every problem within a business is ultimately a marketing problem.”
Pete Markey, CMO of Boots, was quoted at last years Marketing Week’s Leadership Summit saying that
“you need to be credible as to the link between marketing strategy and business strategy. In too many organisations, the two aren’t hand in hand. Marketing programmes need to be plugged into what matters.”
You will obviously know what your business challenges are, but a quick Google search gave me the ‘biggest business challenges in the UK in 2023/24’. At first, the majority of them may seem outside the scope of marketing, but actually, the contribution you can make is significant.
Here is how it might look…
| Business Challenge: Supply Chain. Material constraints. | CMO Contribution: Reduce packaging promotions by simplifying the activation calendar. |
| Business Challenge: Cost of Living Crisis. | CMO Contribution: Portfolio Review, ensuring that you have a brand or a pack format that can offer ‘value’ without eroding margin |
| Business Challenge: Inflation. | CMO Contribution: Work alongside the supply chain to build a long-term sustainable packaging strategy. |
| Business Challenge: Recruiting talent. | CMO Contribution: Brilliant creative output that gets noticed and attracts people to want to work for the organisation. |
| Business Challenge: Sustainability | CMO Contribution: Work alongside the supply chain to build a long term sustainable packaging strategy. |
My illustration might not contain all the right answers but don’t underestimate how positively this level of engagement will land with the CFO. They will appreciate your empathy and commitment.
Finally, in the context of leading the business, not just marketing, be proactive in responding to new information and reports. For example, at the time of writing this blog, Circana released the latest ‘FMCG Demand Signals report’ with this dramatic headline…
As a CMO, I strived to stay ahead of reports and headlines like these to ensure that if my CFO or other C-Suite colleagues were reading it, they already had a POV from me, summarising what we were already doing, or if necessary, the course correction we were taking. In this instance, the Circana report is very helpful, and my summary would have looked something like this…
With all the Autumn Statement coverage, you may have missed the latest FMCG Demand Signals report, which tracks consumer demand in the UK, France, Germany, Italy, Netherlands and Spain.
The report brings bad and good news, with consumer spending down, but a return to volume growth possible with the right playbook.
If you are a brand owner, you will be concerned that private labels continue to take share.
If you are a Retailer, you will be concerned with the 22% reduction in innovation.
Circana suggests that the growth playbook will need to include innovation, a serious approach to sustainability and an acknowledgement of shopper price sensitivity.
I would add that taking a page from Diageo’s playbook and remaining committed to long-term brand building will also be critical. That of course, is already built into our Long Range Plan.
This type of proactive communication is nearly always received positively, even if you are the bearer of bad news. Your CFO will be particularly grateful, particularly for the ‘talking points’ given they are often the first point of contact for external stakeholders.
Building the Strategy with your CFO
In this next section, we will look at how best to work strategically and operationally with your CFO. I found the following framework a really helpful structure to keep us closely aligned and enable us to be able to speak as one voice to our President.
Evidence
It is critical that you spend time taking your CFO through the marketing effectiveness principles that will ultimately influence your brand strategies and the metrics that you track. My sense is that traditionally marketers have resisted immersing their finance colleagues in the marketing theory, but this is a mistake, because without it they are missing important context for the investments you make.
Objectives
I tried to limit the objectives to 3 and structure them under the following headings:
- How to GROW
- What to FIX
- Where to DEFEND.
Strategy
Clear strategies then flow from the objectives which set you up well for the stage that follows.
Debate and Align
Don’t hit your team and key stakeholders cold with this. It will require some pre-conditioning and setting the right environment for challenge and debate. Expect some tension, don’t try to avoid it, in fact encourage it. The analogy I used was that families have arguments but it is a safe environment, built on love and respect and they know how to make up. It should feel similar in a high performing team.
Once you get to consensus and alignment push one more time.
Plan
You are then ready to build the plan across the commercial, supply chain and finance teams.
Debate and Align
Another opportunity to review, improve and then lock hands. This is critical for the next stage to work.
Energise the wider organisation
There is a wonderful book by Brady G Wilson called ‘Beyond Engagement’, “a brain-based approach that blends the engagement managers want with the energy employees need.”
Taking time to consider how you energise the teams to execute the plan, even on those tough days will always pay dividends. During the pandemic, our 350-strong sales force was in the field supporting their Retail customers, helping them navigate through all the challenges of the time. As Brady says, you have to go beyond engagement to get that type of reaction.
Execute as one.
I acknowledge that sometimes I might have pushed brand managers into areas of the business that could have been seen as a distraction from the main brand-building tasks, but if there are supply chain materials challenges or inflationary pressures that could impact profit and/or pricing, then I think they should be part of the discussion. Equally, someone should be the bridge to sales if customers are going to suffer out of stocks. Building a culture of ‘we always execute as one’ is powerful. “We win together, and we lose together” might be a cliche given its frequency of use, but I do believe it. There should be no us and them.
Metrics that matter
These need to be transparent, they need to remain the same, they can’t be open to interpretation and they need to be hard-wired to brand growth, i.e. do they improve Mental and Physical Availability and business targets, i.e. profitability.
To get to this point you will need to have had your CFO included at every stage.
You will need to have a leadership team with a winning mindset who role model collaborative working across functions.
Conclusion
I have always felt uncomfortable with advice that advocates for the CMO needing to “convince the CMO why marketing is important”. It starts from a place of tension and assumes the CFO doesn’t see the benefit of marketing and is reluctant to invest in brand building. In my experience, the CFO’s I have worked with have more than a passive interest in brands and how they grow and have always been an ally and a provider of sound counsel. In this blog I have attempted to share what I believe are the key contributing factors to a collaborative and value-adding relationship, and they can be best summarised in these 3 points.
- Have a winning enterprise mindset. This isn’t about winning intellectual arguments about the benefits of more investment. It’s the ability to demonstrate through action how marketing can address wider business challenges on the journey to brand growth.
- Invite your CFO into your world. Encourage them to attend your leadership meetings, involve them in strategy development and provide detailed briefings on key performance metrics such as brand health tracking, resisting the temptation to ‘spin’ the results.
- Put yourself in the shoes of your CFO Anticipate their needs and be proactive with information and messaging to help them manage their stakeholders.
For further reading, take a moment to read this excellent report from EY, published earlier this year.
Myles Corson highlights 3 paradoxes of a CFO, the first being;
“How can CFOs create long-term value when they are under pressure to cut priority investments to deliver results today?”
Switch the F to an M (to make CMO) and this statement sits perfectly with the paradox of a Chief Marketing Officer.
Author Bio: Martin Coyle is a former Chief Marketing Officer and Chief Commercial Officer at a global Bevco, with 30 years experience in FMCG. He is an expert in building Mental and Physical Availability, Portfolio Strategy development and aligning organisations behind brand execution.
Connect with Martin on LinkedIn
Read Martin’s blog on why a Mental Availability Assessment is a critical part of being Market Orientated or go to our video on YouTube to watch
