Chief Revenue Officer: A Failed Experiment or an Evolutionary Step?

The clash between marketing and sales departments has fostered the growing popularity of a new position – the Chief Revenue Officer – to bring the finger-pointing under wraps and align the two functions under shared revenue goals.   In theory, the CRO role makes sense. It allows the CEO to delegate marketing and sales alignment to someone with experience under both functions to optimize the teams and manage differing charters, personalities and performance metrics. Many Chief Executive Officers have risen through the sales ranks. They may not fully understand the charter of marketing and are prone to take sales’ side in arguments, instead of creating an environment for collaboration.   In the best of cases, Chief Revenue Officers have gotten sales and marketing to stop blaming each other for lost revenue opportunities and created a customer-focused attitude, aligning both departments with customers rather than lead numbers and superficial metrics.   But in most cases CROs have made matters worse. Instead of leading both functions to a shared, common-sense vision of serving the customer, they inevitably play mediator between two warring sides. Like the CEOs before them, the favor of the CRO is won by sales, who has a more direct way of measuring their influence on revenues. The CRO role has developed into giving sales a seat at the C-suite – almost like a Chief Sales Officer.   The CRO is not dead however, it is an experiment and an intermediary step to the Chief Customer Officer position. As progressive companies realize that it’s more effective to focus on the customer experience, relationship, satisfaction and loyalty that drives revenues than on the numbers themselves, Chief Revenue Officers will inevitably become Chief Customer Officers.   Most Fortune 100 companies are at some stage of the transformation to a customer-centric organization. From strategic planning to job description and performance metrics, enterprises are retooling themselves to align with customer expectations. In this transformation, it’s natural for CROs to move into the position of a Chief Customer Officer (CCO) that manages the lifecycle of the customer experience from marketing, to sales and support.   Only by stitching together these functions into a cohesive fabric can companies consistently deliver experiences and nimbly change in lock step with their customers.

The Smoking Gun of Alignment

There used to be a time, before the tech-bubble bust in early 2000, when the route to CEO was through the CMO's office.  The belief was Marketing touched and coordinated all aspects of the business, knew how to build market share and understood how to read the tea leaves of emerging trends.  Post tech-bubble, the tables turned and the path to the CEO seat was through sales.  Board of directors and venture capitalists believed that Sales touched all aspects of the business, knew the numbers, how to drive revenue, and were on the frontlines of emerging trends.   Interestingly, both paths to CEO-ship have not proven to be sure-fire successes.  Tech company failures litter roadsides during both downturns unable to get their value proposition, go-to-market strategy and product roadmaps right, in the eyes of the buying customer. What does this have to do with aligning sales and marketing? It could just be the root cause - the smoking gun, so to speak.  

Thinker, Blamer, Junkie

Here's some good news in this perilous economic climate: The need to do more with less -- and faster -- is bringing sales and marketing teams together.  Aligning sales and marketing requires a mindset change from scarcity of resources to be fought over to one of abundance achieved through partnership.  If you're in marketing, and want to align with sales, sparking the conversation can be daunting because some sales leaders are thinkers, some are blamers and some are what we might call junkies.  

Defining Sales & Marketing Optimization

The need to do more with less, faster has brought sales and marketing to figure out how to work better together.   There is antidotal evidence that over one-third of all B2B companies starting talking about improving their sales and marketing alignment in the middle of last year.  Most of the talk is around lead management - how to get more leads and sales to follow them up.  And there are the inevitable side conversations about marketing or sales leadership and if it is time for a change. These are all good conversations as it means people are open-minded to change on some level.  

Brain Food for 2010

The holiday season is a wonderful time - family, good friends, great food and a time to rest and reflect on the year past and the one ahead.  It also offers us a great time to read new and classic books.  I call that food for the brain and catalysts for creativity.   A friend called 2009 a 'character building' year. I think of it as 'the year the transformation began'.   Marketing is fundamentally transforming, sales & marketing alignment is on the C-suite's agenda (finally), strategy formulation and operationalization is part of the CMO's charter, and businesses around the world are embarking on a new cycle of innovation and growth.  If we're fortunate, we could be entering a renaissance.