The CMO Model Isn't Working for B2B Software Growth Companies

Over years my peers and I have each taken hundreds of calls from recruiters for CMO positions at young or high-growth B2B software companies. After speaking with many CEOs, it's clear that they know they need stellar marketing but their solution is to just hire an enterprise CMO to make the magic happen. However, this might be the wrong tool for the job.

You can't solve a small- to mid-sized marketing problem with an enterprise approach.

Not only are you competing with bigger businesses for talent, enterprise CMOs want enterprise budgets and enterprise teams, and ultimately expectations aren't always aligned - which may explain why CMO tenure is typically 12-18 months. I have been one of them.

At some point a company decides that it's time to up their game in marketing, which translates to the decision to hire an experienced CMO. Here's what I've seen unfold first hand, either through my own experience or through peers of mine.

One scenario is they hire a recruiter and describe that they want an experienced candidate who has don't it before and knows what good looks like. The recruiter gives them a pool of candidates that includes up and comers, but the company prefers the enterprise candidates. They try to convince the person to come on board but are also competing with larger companies and many times they lose the candidate to someone else. Then the process starts all over. Months go by and no progress is made. Existing marketing talent gets increasingly frustrated and backup candidates disappear.

A second scenario, (perhaps due to the first but not always), the CEO decides to hire a VP or Director of Marketing who has great potential but for the first time he/she is responsible for all of it. They are more affordable and super-excited to be there.

But for this person to be successful, they need to be a unicorn.

They need to know all aspects of marketing soup to nuts, they need to be deep on operations, leadership, martech, products, PR, demand gen, channel, change management, executive presence to speak to the board, and so on. I've interviewed and worked with dozens and dozens of people at this level and what I observe is typically at this level this talent has deeper experience in one or two related aspects of marketing, but rarely all of it. So they get hired, they dive in and struggle to meet the expectations set which started at the outset with the company looking for an enterprise CMO. For both scenarios, (either because there is an enterprise CMO in the seat with higher expectations on funding, or if there is a VP-Level who needs outside help because they don't have time to learn parts of it on the fly), the ask is always for more budget and resources. This ask comes typically one or two quarters in, at the same time they are trying to build the foundation for KPI tracking so they are asking for more money before they can quantify what more budget will deliver in terms of pipeline or revenue. So this tension arises, the marketing team starts to burn out, the marketing leader starts to get more disheartened that they can be successful and the executive stakeholders start formulating perceptions about the marketing team or about the value of marketing in general. It's a chicken or egg problem. So they focus more and more of their energy and budget on the martech software to prove efficacy so they can justify more budget. Meanwhile, everyone else wants to talk about doing more programs or events - when the bulk of the funding is going towards measuring results because the foundation was missing in the first place. By the way, they are implementing a big martech engine they read about big companies doing, because honestly those are the companies that can afford to do it right. Sidebar comment: Such a martech engine is a API-driven infrastructure based on cloud-based third party tools that typically is ignored by IT departments and are full of security vulnerabilities. Which in writing this, gives me a stomach ache to think about it. In essence, marketing is trying to build an enterprise-class martech engine out of the gate to justify more budget that they may perceive they need. Eighteen months later, either of the two leaders in these scenarios leave and it starts all over again. ​ Whether you are a young, hyper-growth business or a mid-sized company in transformation mode, the through-lines are strategy, speed and impact next quarter, not an enterprise engine in a year...oh, and very limited resources. Businesses like this need to create immediate impact while they are building for scale over time. And the cruel truth is the precise time you need the best marketing strategy and the most amount of leverage, is when you can't afford a big company marketing budget or an enterprise level CMO.

CEO's, the truth is you may not need a CMO.

This problem has been evolving for companies between $50M-$300M and it's at a breaking point now with the influx of new and growing businesses, the active private equity space and with the talent shortage in marketing. It's a perfect storm.

Before I launch into what the solution is, I want to set some additional context so you can consider the source. Over 30 years I've had the distinct honor to be part of many companies' journey to modern marketing. For whatever reason, I've been attracted to opportunities were transformational in nature. These were not at companies like Google or Facebook or Workday or Okta. Let's face it, of all the tech companies only about 5% of them have grown up since their inception and become beautiful butterflies. Everyone else has had to face a blunt transformation of one form or another. Maybe a pivot to a cloud model from legacy, maybe a full turnaround, a carve-out, an acquisition from a strategic, or maybe sold to a private equity firm, or a they are a hungry startup. That is what the other 95% of us are all doing.

During this time, I've gotten to be a part of ten business transformations, built seven martech engines and done the same amount of rebrands, and built organizations to scale and support many different and complex business models. What I've learned is there is definitely a playbook in this stage because regardless of the company's situation, the level of marketing maturity and the budget envelop as a percent of revenue is always about the same.

I call this the moment of SURGE.

In this phase, you need a marketing strategy, market segmentation, brand positioning and messaging, a martech roadmap (marketing is technology-driven so we are building a software platform), operational process between sales and marketing to streamline lead flow, solid KPIs and core assets...oh, and you need to recruit the right talent with the right workflow to make one dollar act like three dollars.

For the other 95% and non Fortune 500 tech companies, after the core strategy and these key pieces are built during this SURGE phase, you don't really need a CMO to make that all happen. You need the team to execute on the plan, with good coaching/mentoring, and you can instead hire 2-3 more sets of arms and legs to do that, until your next phase of maturity...and funding.

In this scenario, you can take a proven set of best practices and methodologies that are appropriate for companies at this stage, create prospect engagement and help drive growth and momentum. With the right approach, you can get the fundamentals, the team and the execution plan set and in place in three months, using a right-sized approach to this marketing situation.

Is this something you can identify with? Send me an email and let me know or let's connect. I'm happy to offer any advice for immediate impact, even if I can't help on a more formal basis.