Two Cs in a Pod

On the traditional corporate organizational chart, chief marketing officers' and chief financial officers' paths seldom cross. But given today's market environment, companies can no longer afford to have these executives ensconced in their silos.

Globalization and technological innovations are rapidly increasing the speed at which change occurs. Competitive advantages that companies may have built up previously don't last as long as they once did. Strategies for building growth need to be continually refreshed on a more dynamic basis than previously.

One way to bring CFOs and CMOs together is through an enterprise performance management approach that is customer-centric and balances short-term financial goals with long-term strategic objectives.

Enterprise performance management consists of four key elements:

• Strategic planning and an understanding of the key value drivers for the organization;

• Portfolio value analysis: determining which markets, products, and customers to target to achieve that value;

• Resource planning and allocation of marketing dollars, people, and capital to execute the plan; and

• Performance monitoring and analytics: determining the drivers of performance changes and using that insight to reallocate resources to achieve strategic goals.

Differing Priorities

While CFOs and CMOs are both interested in the health of the company, their different perspectives can contribute to a natural tension. CFOs are under increasing pressure to deliver quarterly earnings targets. CMOs focus primarily on building brand equity of the company, which typically impacts long-term growth.

But some companies make trade-offs that jeopardize the long-term objective of maintaining the company's brand -- an essential ingredient in sustaining customer loyalty and profitability. For example, under strain to meet short-term financial goals, companies may short-change investments in advertising, employee training, and other efforts to provide a more rewarding customer experience. Such cuts can endanger long-term growth prospects.

The pressure on CFOs and CMOs to produce tangible results is magnified by the fact that their tenures are growing increasingly shorter. CFOs and CMOs have the shortest tenures among all C-level positions. The average CFO lasts about three years, while CMOs typically survive less than two years. Indeed, more than half of CMOs hold their jobs for less than one year.