CMOs Needed At The Board Level: AMA CEO Klein

“It’s odd that a board wouldn’t want to have a board-level perch for someone with innovation credentials,” said Russ Klein, whose mission is to lead the American Marketing Association’s transformation into the definitive force shaping marketing best and next practices worldwide.

CMOs Needed At The Board Level: AMA CEO Klein

As changing consumer behavior transforms the marketer’s role and toolkit, the marketing associations that serve and inspire marketers must also evolve.

Russ Klein became CEO of the American Marketing Association (AMA) in July 2014. His mission: to lead the organization’s transformation into the definitive force shaping marketing best and next practices worldwide. Klein brings his master marketer experience and perspective as a successful serial CMO for many of the world’s best brands, including Dr. Pepper, 7UP, 7-Eleven, Burger King, Church’s Chicken, and Arby’s, as well as agency experience. caught up with Klein to find out what he and the AMA team have learned, what course they’ve charted for the AMA to enable the marketing community, and other insights from a bold brand and business builder. You’ve been the AMA’s CEO for 19 months. What are your most important insights and identified opportunities regarding the AMA’s vision to serve the marketing community?

Klein: The first thing I learned about the AMA was the extent, size, and impact of the marketing community—30,000 official AMA members and 2 million visitors to our website annually. There are about 3 million marketing professionals and about 14 million sales professionals in North America, and this group is a catalytic sparkplug in the engine of commerce to drive GDP, economic prosperity, and the quality of life for so many people in not just the U.S. and Canada, but a lot of countries around the world.

However, I was surprised to learn that a prolific entity like the AMA, with so many forms of communication—from journals, magazines, newsletters, the website, conferences, chapter programming, etc.—did not have a North Star that was inspiring, influencing, or guiding what the AMA’s content focus should be. Since coming into the AMA, one of our transformational initiatives was the creation of the first-ever intellectual agenda … anchored in what we call the “7 Big Problems of Marketing.” These problems are meant to be enduring issues, questions, or challenges for marketing and sales professionals that will not go away anytime soon and are at the intersection of thought leadership and managerial relevance. These will serve as a contextual backdrop to inspire all of the created and curated content that the AMA generates, as well as longer-term, research-driven content.

My vision for the AMA is a shared vision to become a community that is essential for marketers. … We are interested in elevating the AMA but as an ode to the individual marketer and sales professional. As an analogy, think about Nike’s devotion to the individual athlete. … This is so important because of the rapid rate of change in marketing that will only accelerate. The individual is simply unable to stay abreast of all of these changes. When you became the CEO of the AMA, you spoke about a number of “unstoppable forces that will create an economic plurality of capitalism and commercial-grade sharing.”As a result of these forces—you mentioned creative destruction, Metcalfe’s law, and Moore’s law—how will the CMO’s and marketer’s role continue to change, and what are the greatest challenges and opportunities?

Klein: This is a monumental question. One of the “7 Big Problems” is focused on that specifically: the role of marketing in the firm and C-suite and how marketers are being asked to do so much more with the same or fewer resources. … The modern enterprise’s look, shape, and feel is very different than it has been even 10 years ago. My answer would be that the next frontier for marketers is to move from the concept of an agile organization, which most organizations are still trying to get to and is an achievement in and of itself, to become an anticipatory organization.

If you look at mobile, IoT, and technologies like predictive analytics and the importance of contextual marketing, marketers will be in a position to better understand the context for which their products or services might intersect the life of a consumer. Context is more important than anything else I could ever know about a consumer; [it] trumps personalization and any other insight-driven marketing technique. Organizations that can live on the edge of where context and their customers and products live in an anticipatory way is where the growing edge is going to be to generate growth. This won’t happen overnight, but I believe there is a lot of revenue here. With the transformation we’ve experienced in the marketing profession, do you believe that the future of marketing is a combination of art and science or science and art?

Klein: I love this question because it speaks to the unique AMA community, which is defined by an elegant tension between the left and right brain … the academic or sage and the practitioner or magician. My belief is that in a modern enterprise, marketing has to be a whole-brain function. You can get that a number of ways. You can find the 30% of marketers who are supposedly whole-brained, or you can build a team of left-brain and right-brain people who collaborate, share, and integrate their perspectives to be able to create and deliver value for the enterprise.

For example, when you look at innovation work, it takes the whole brain to be a successful innovator. Innovation is not possible without art and science working together. You start out with the fragile creative idea that needs to be protected and nurtured, which generally is an instinct-driven kind of innovation. Then as that innovation evolves and moves downstream in the innovation process, it becomes subject to the rigor of supply-chain management, financial modeling, product specifications, and commercialization processes that require the cold, sober analytical point of view to make sure that it is a feasible business proposition.

This is the beauty of the dynamic that occurs inside the AMA community. Before marketing was ever a science, it was obviously an art. In that sense, art got there first. The soul of marketing is art. While I personally believe that marketing is art and science, in today’s mar-tech, IoT, and connected-consumer environment, marketing really is science and art. Having said that, being a brand tastemaker is very much of an art form. In your October AMA blog post, you talk about the Journal of Marketing study “Marketing Department Power and Firm Performance,” which showed that a powerful marketing department drives superior company performance and longer-term future total shareholder returns. Why is this such an important study?

Klein: The reason this study is important is because it is a very robust, 16-year longitudinal study that proved definitively that firms that have [powerful] marketing departments outperform. The bottom line is that a powerful marketing department has the power to create enterprisewide customer-centricity. A powerful department is able to attract the budget and talent resources it needs to do its job well; they are able to influence the narrative that goes on at the C-suite, board, and enterprise level; and they are able to create more of a cultural bias toward the customer in the enterprise.

I tell marketers that they should be sharing this study with their C-suite and board because it underscores the fact that the C-suite should be considering the structure, talent level, and budget of the marketing department as seriously as they might be contemplating a $25 million investment in a new factory. The indicated action is to spread the word that this is not wishful thinking among marketers; this is a study that says if you want to improve your shareholder returns, quarterly earnings, and cash flow, look closely to ensure that your marketing team has what they need to be successful for the enterprise. In a somewhat similar vein, results from a 2015 study of S&P1500 boards over a six-year period found those with marketing-experienced directors tended to have better total shareholder return. Yet just a tiny fraction of the 65,000-plus board directors in the study had managerial-level marketing experience.What benefits do you believe boards would gain by having a successful CMO, and why don’t more boards have experienced marketers at the table?

Klein: This is a big issue. I believe the benefits of having CMO board directors would be similar to my previous answer of the enterprisewide benefits from having powerful marketing departments to deliver superior performance. The study you reference indicates this is the case, as well, if you can bring customer-centricity into the board dialogue. Some of the best strategic thinkers in the world are marketers, and strategy is all about competitive advantage. So I think boards are missing enterprise opportunities to bring more dynamic strategic thinkers who are innovative and customer-centric.

When you think about the No. 1 stall point in the history of business, it has been a failure to innovate. It’s odd that a board wouldn’t want to have a board-level perch for someone with innovation credentials, which is often the marketer, especially now with the rate of change that is happening. Boards probably have an antiquated view of where marketing has transformed and progressed over the last 10 years to science and art. What are your top three calls to action for our fellow CMOs?

Klein: One thing that I often recommend to marketers is to seek out education and certification about design thinking. Design thinking is the rage. I think it would be an important source of development and growth for a professional marketer to become more familiar with what design thinking is all about. It is a step closer to the customer for the marketer. My second point is to begin thinking more about customer context as I discussed earlier. And the third one would be to join the AMA.

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