Marketing for CEOs

What do CEOs need to know about their marketing department? Here's a primer.

This article is the first in a series for CEOs on each of the six core areas of the business. Look out for future articles on the five other areas. Taken together, these pieces are intended as a crash course for CEOs, allowing them to effectively balance tensions between the six areas. Achieving this balance is central to the value a CEO creates within an enterprise.

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The marketing department usually isn’t the CEO’s favorite. There’s an old joke many CEOs identify with: “50% of my marketing budget is wasted. I just don’t know which 50%.”

The sales and finance departments are often more favored, probably because revenue and cash flow are easier to measure and track.

Another reason CEOs don’t favor marketing is that most of them have no experience in it. McKinsey found that only 10% of Fortune 250 CEOs have marketing experience. Just 4% have previously held a CMO-like role. We found similar numbers in a Texas CEO Magazine survey of Texas CEOs.

But marketing is every bit as important as any of the other key functions of a business, including sales and finance.

The most successful CEOs in history have shown deep understanding of marketing. This includes, of course, Steve Jobs with his meticulous branding and product launches. He is a prime example of a CEO who understood marketing. But other giants—from Bezos to Branson to Musk to Schulz—all did too.

You don’t need to be a marketing visionary to be a successful CEO, but you do need a basic grasp of this function if you want to run a balanced organization that delivers long-term results.

Note: Throughout this article, I will offer questions to discuss with the leader of your marketing efforts (your CMO). Do not interrogate them with these questions all at once. Rather, frame these discussions as an opportunity for you to learn more about how that leader works and how you can better align marketing’s efforts with those of other teams. Your job as CEO isn’t to run marketing but to ensure the department is creating business value in alignment with the broader strategy.

When I started out in the CEO chair, I had some pretty big misconceptions about marketing. In this article, I aim to provide you, the CEO, with a basic framework for thinking about the marketing function, especially relating to how it fits into the overall puzzle of business performance.