Why CEOs Can’t Blame Marketing Or Sales For Lack Of Alignment

There are plenty of explanations for why marketing and sales functions remain out of step: differences in compensation plans, time horizons, breadth of focus, management practices, cultures and the list goes on.

Nobody's happy about it, but they're also slow to change course. Are sales and marketing doomed to live out of synch?

I went on a pilgrimage to interview CEOs, corporate board members and venture capitalists with first-hand experience at alignment.  What I found was both elating and depressing.

First the elation. A handful of technology company CEOs have figured it out. Their achievements are remarkable and the factors that led to their alignment success are relatively predictable.

Those factors include a clearly defined company strategy, open collaboration among stakeholders and a workable company-wide accountability process.  But their alignment wasn't simply about sales and marketing playing nicely together.  It was about weaving together every aspect of the business.

Here is some of what I learned from this handful of unique executives:

• Size doesn't matter. Big ones and small ones are equally capable at both success and failure. What really separated the aligned ones from the non-aligned ones was the background of their CEO.  Their leaders had careers that spanned both marketing and sales, and they understood the symbiotic relationship between both.
  • Alignment is like marriage. Like a successful marriage, the sales-marketing relationship needs to be constantly nourished.  Both departments have to be honest with one another and clear about what they need. For successful CEOs, the goal was for marketing and sales to have a 50/50 relationship.  A persistent imbalance works against alignment.
  • Be careful what you measure. Alignment is very sensitive to the measures used to manage it.  Each CEO who achieved it had clearly defined critical success factors, specific and time-bound objectives for every role, and monthly, metrics-driven dashboards to keep everyone on track.  These measures have to map back to company strategy.
  • Cascading objectives.  In well-aligned companies, every business objective is measured quarterly and corresponding performance measurements cascaded down the organization.  Transparency in those companies not only drives alignment, it drives accountability.

For these CEOs, corporate strategy was a creative roadmap for getting from here to there. But that wasn't the case with everyone; my journey also took me to the altar of venture capital and into corporate boardrooms where sales and marketing were not aligned. There, the story was often quite different.

Until about ten years ago, most technology company CEOs career paths led through the CMO's office. The prevailing belief was that marketing touched all aspects of the business, knew how to build market share, and understood emerging trends.  Marketing also helped to inflate what now, in hindsight, was only a bubble.

A decade ago, when that bubble burst, the tables turned and the path to CEO was rerouted through sales.  Boards of directors and venture capitalists came to believe that it was really sales that understood the numbers, knew how to drive revenue and had a finger on the pulse of emerging trends. The early 2000s backlash against marketing was swift and severe.

After one too many non revenue-producing start ups had gone bust, sales became the hallowed ground where boards worshipped. By building a sales-oriented culture, the wisdom went, you could avoid the "squishy" marketing concepts that weren't directly revenue-producing like brand equity and reputation. The problem is that brand and reputation make or break companies.

Of course, neither path to the top proved consistently successful, but marketing's fall from grace remained.  My interviews with Directors, VCs and CEOs bore that out.

Here are the findings from my interviews:

• No one knows how to measure marketing. Boards complain that marketing can't produce quality leads. Then, when pressed on the matter, it turns out the measure that really mattered was inquiries. As a result, regardless of their backgrounds, many CEOs remain puzzled about how to measure marketing and there remains a fuzzy understanding in the corner office of what marketing can and cannot deliver.
• Marketing doesn't have the Board's ear. CMOs have almost no exposure to company Boards, so they are usually left out of strategic discussions.  Board members shrugged when asked about evaluating marketing's contribution. That helps explain the zero-sum marketing/sales budgeting situation in so many companies.
• Sales knows they're on top. Whenever there's a conflict, most boards and CEOs decide in favor of sales. Whether it's taking funds from marketing to add more sales people, supporting 'creative' sales models, letting sales dictate marketing programs or letting sales get away with dysfunctional behavior – the CEO has bet his job, and bonus, on sales' leadership.  No wonder alignment is hard to institutionalize.
• Boards and CEOs can't define alignment. Everyone claimed to want it and most felt they had already achieved some degree of it, but no one could articulate what it really meant.  As a result, they couldn't really quantify what their lack of alignment was costing them in terms of lost revenue, missed market share or valuations.

If companies are really going to benefit from alignment, their CEOs, Boards and VCs can't hide behind sales.  They need to figure out the most appropriate ways to measure marketing's contributions and then use them.

Thanks to Christine Crandell - Outside the Box / Blogs Forbes