CMO-CFO bond is like a marriage: miscommunication and fighting hurts the whole family
For an organisation’s marketing and finance functions to have a good relationship, the behaviours and attitudes of the CMO and CFO need to be congruent, writes Chris Khor.
The very important relationship between CMO and CFO should be treated as you would a marriage: be honest, be respectful, trust and be trustworthy. Do what you say you are going to do, don’t point the finger of blame and remember: you don’t always have to be right.
Chorus Executive was recently the proud sponsor of Deakin University’s event ‘Seven Mistakes CFOs and CMOs Make That Hurt Their Organisation’. The breakfast event was a great and brought into discussion some very interesting insights.
Hosted by Michael Valos from Deakin University, the guest speakers were Nicki Nicols, CMO for BP Australia, Mark Hall, deputy CFO for Telstra, and Murray Chennery, executive general manager for CPA. Although they came from different industries and functions, the messages were very similar and in many ways, very simple.
The relationship between a CMO and CFO is often a difficult one and yet integral to the functioning of a successful business. As with any executive level staff, there needs to be open and honest communication and above all, both CMOs and CFOs need to remember that they are working towards the same objective: success for the organisation. This is something that is all too often forgotten in the mess of inter-department wars.
What was clear in the discussions of the day was an attitude of each department viewing the other as the enemy – whether it was subconsciously or a pervasive belief filtered down from leaders to their staff. CFOs are often seen by marketing as ‘blockers’ and CMOs are often seen by finance as ‘spenders’. This attitude of negativity is one that can be easily remedied, provided the executives from both departments make an effort to bridge the gap and then pass on a positive attitude to their staff. A greater understanding of the two functions needs to occur.
If marketing can learn the language of commerciality and demonstrate a clear understanding of ROI, then finance is more likely to see the short and long term gains of a marketing strategy. Likewise, finance needs to learn the benefits of marketing that are beyond financial gain or commerciality. Sometimes, ROI cannot be a specific number on a page, particularly with investment in social media, for example.
CFOs need to manage risk by budgeting for failure, because failure is learning and without taking a risk on something new or uncharted, true innovation cannot be achieved. Sometimes there is no case study to prove that a particular marketing campaign or strategy will be effective. If we were to look at the first business to utilise Facebook as an integral part of their marketing strategy, one would find that there was no evidence to confirm that it would work. Yet we’ve seen the massive impact Facebook (and other forms of social media) has made to the marketing world in terms of converting consumers into brand advocates, personifying brands and delivering key messages.
Financial controllers need to be reminded that ROI is not just about return on investment. As Murray Chennery said, it is also about understanding the ‘return on imagination’ and Return on Innovation. While a balance needs to be struck between the commercial and creative, a good CFO will trust in the expertise of the CMO to use their judgement well and think creatively, but respect commerciality.
In return, a good CMO will understand and respect the expertise of the CFO to mitigate loss and think broadly, beyond the scope of marketing.
CMOs sometimes need a reminder that the money or resources given to the marketing department is not an entitlement. It is a loan to the marketing team with the objective of improving performance, bringing in new business and strengthening a brand. Marketers don’t always need to spend the full budget to achieve these objectives. If marketing goals are achieved for less, the remaining funds can be returned to the bottom line. There is also the opportunity to get finance on board by involving them earlier in the marketing process. It was suggested that if the CMO invited the CFO or a representative of finance to a marketing research or planning session, it would foster a good relationship between the two departments and assist finance to better understand the methodology of marketing.
For the marketing and finance functions to have a good relationship, the behaviours and attitudes of the CMO and CFO need to be congruent. The message needs to be instilled within the relationship that both are working towards a common goal.
Valos’ pragmatic advice was to treat this very important relationship as you would a marriage: be honest, be respectful, trust and be trustworthy, do what you say you are going to do, don’t point the finger of blame and remember – you don’t always have to be right.