Historically there has been a substantial gulf between sales and marketing. Back in the day, there were countless stories about the enmity, hostility and lack of respect each profession had for the other. Some of the disputes are legendary. In my book (Second Stage Entrepreneurship), which was written in 2013, I advised against the practice of having a single executive have oversight for both sales and marketing. It did not take a genius to understand that the expertise, requisite skill sets, experience base, and natural resting state competencies are very different for the two disciplines and roles. It was really not that long ago when the four P’s of marketing were the primary concern of the function. In more recent years, sales has leaned heavily on marketing for development of the value proposition and assistance in competitive differentiation, but they were really not directly part of the revenue generation function.
However, in the past five or so years, sales and marketing have become increasingly mutually interdependent. In addition to all that marketing has provided in the past, now lead generation has become a critical marketing function, and one that must be closely aligned with sales for this to work and to result in the level of lead flow that is necessary to drive growth or to have a high velocity sales function work at all.
As a result of this, we are beginning to see the emergence of a new role in corporations, that of the Chief Growth Officer (sometimes called the Chief Commercial Officer). The role has overall responsibility for driving the growth of the enterprise; meaning having direct oversight of sales, marketing and product/innovation. Some well-known marketing driven companies have established this role, among them Coca Cola, The Hershey Company and Kellogg. But in a testament to how far this trend has moved into the mainstream, in the US, there are 192 CGOs in companies with less than 50 employees. CGOs are being hired in a wide variety of industries, including marketing and advertising, IT/software and IT services, health care and management consulting.
What is driving this increasing use of a CGO is the overwhelming need for companies to figure out how to achieve higher levels of organic growth. Over the past 20 years, organizations have become much more efficient, eliminating by some estimates over 300 basis points on average out of S, G & A costs. But additional advances on the cost side of things are increasingly hard to deliver, meaning that improved financial performance must come from either on-going merger and acquisition (M&A) activity or organic growth. No surprisingly, M&A activity has continued at historically high levels, with announced transactions in the first half of 2018 hitting an all-time high with over $2.5 trillion in deals announced globally (Axios). But this frenetic deal activity has pushed purchase price multiples to correspondingly record high levels, and as a result, M&A activity that is able to deliver accretive financial performance is more difficult to achieve and organic growth becomes paramount.
Hence, the arrival of the Chief Growth Officer. The intent, according to Halverson Group CEO Ron Halverson, is to bring together “siloed” teams from across the organization and focus them around the needs of customers. The CGO has a mandate to bring the disparate groups within each company together, to connect the dots between the firm’s strategy and the needs, both met and unmet, of the customer. This person has to implement a longer-term vision and decide what must be done, and also, what activities that the enterprise is currently funding that should be stopped. The role must be focused and oriented with the needs of the customer in mind, understanding points of pain or un-met needs, and then being relentless about prioritization, making bets on the best of many potential avenues for success, and then pulling the levers in each of the functions (sales, marketing and product) to drive growth of the new initiatives.
And this is the key, not only picking which of many competing strategies to pursue, but then, in an organized and systematic fashion, set up the necessary organizational capabilities to work together in a concerted fashion to articulate the value proposition. Specifically the firm needs to become very clear regarding what the new product or service does, how it is different from alternatives, and how it is better, but then also establish the plan to communicate this in the product capabilities, the lead generation messaging and targeting, and then equip the sales team to have the right types of conversations for the subset of contact points that make the leap to the funnel and become actual prospects.
The addition of the CGO role will not eliminate the need for supremely talented individuals to head up the sales, marketing and product teams. Each of these roles require substantially different expertise; it strikes me as highly unlikely that one person will be equally proficient in sales as they are in marketing. Or that a super accomplished sales leader could also head up innovation or product development. The CGO’s task is to have a deep understanding of all three disciplines, architect the path to growth, and then work across the enterprise to deliver more rapid organic growth, all the while being an advocate for the customer – as in the end, this is who rules the roost.