CMO-to-CRO isn’t capitulation with Kathleen Booth

Foreign.

Hey, everybody. Welcome back to another episode of Executive Conversations. In this podcast, we talk about the behind the scenes of marketing, not the actual marketing strategies, but how do you actually make things happen? How is the role changing in these crazy times that we're in? I'm your host, Maiva C. Fuentes, and I'm the founder of Flying Cat, an SEO and content agency for those who do not know me. And today I have Kathleen Booth, who is the senior Vice President of Marketing at Pavilion. We've had a few other guests who are members of Pavilion. I myself am a member of Pavilion and I'm really excited to have Kathleen on today. She's been posting a lot recently about things that are very relevant to the

topic of this podcast.

So I'm excited to dive into it. How's it going, Kathleen?

Great. Thanks for having me on. Myva.

Yes, thank you for joining me. So, so I really, I reached out to you because you've been publishing a lot about this changing role of marketing. We also had a roundtable with the Pavilion CMO department cohort. I don't know what it's called, the CMO function, a month or a month or two months ago when we were talking a lot about how the marketing role is changing. And so I kind of wanted to dive in, into that. What you've been talking about, what you've been publishing about, what you've been seeing and the conversations you've been having about that. So what have you been seeing?

Oh, boy, where to start? It's, I think, like there's a lot of discussion online about this and a lot of debate and a lot of angst. And I would say if I were to boil it all down to me at least, and this is just one person's opinion, don't take it as gospel. I don't speak for the profession. These are all my disclaimers. But what I see is that there's just a lot of stress and anxiety amongst marketers who feel that there is an imbalance between the amount of pressure being put on them to deliver results and the support and resourcing they're receiving in order to drive those results. I think a lot of marketers feel like there's been this shift that has put them in a position where they're responsible for a pipeline. But there is a general kind of gravitation towards short term thinking, which does not. I mean, it helps pipeline in the short term, but it really doesn't set marketers up to successfully do what they know how to do best, which is More of a long term kind of demand generation and brand positioning and brand awareness strategy. And I think like a lot of this frustration and anxiety is bubbling up. Like you see it in a number of different ways. You see it in the short 10 years of marketing leaders who are often scapegoated when things are not going well. And sometimes that happens candidly because the product stinks. Like there's a lot of. I've, I've been in this position where I've been brought into lead marketing at a company that was pre product market fit and then the CEO doesn't understand why marketing isn't going to be able to come in and miraculously save the day if you don't have a good product. The best marketing in the world can't really solve for that. So there's the scapegoating. There's also often marketers are blamed when it might be a sales problem. There are also times when it's genuinely a marketing problem. But I think, I think the overriding sentiment amongst marketers is that when something goes wrong, their neck is the first one on the chopping block, whether it makes sense or not. And you couple that with the tremendous pressure that I think all revenue executives are under right now because of the state of the economy and what's happened over the last few years with interest rates and the availability of funding, shortening runways for companies. There's. There at times in the last few years have been, has been a sense of desperation of like we have to extend our Runway, we have to bring in more money so we're positioned to stick around. And a lot of that pressure is put on marketers. But when you're under resourced, I mean the most common phrase that came up when we surveyed our members in terms of the challenges they were facing was do more with less, which nobody ever likes to hear. And it's kind of an unrealistic expectation I think. I think, you know, I'm leaning into AI because I really do believe, and this is controversial too, that I can help us. But anyway, I think what, I guess what I'm trying to say is like all this stress and anxiety has bubbled up and has created what feels like an outcry amongst marketers, certainly on LinkedIn and in the communities that I'm a part of of them saying something has to change and we've lost our way because marketing has become very short term focused, it has become very demand gen focused. We've lost an appreciation for what it means to build brands. We aren't giving Marketers what they need to be successful. I think there's also a certain school out there that seems to believe that somehow marketers taking CRO roles is a bad thing. I actually don't agree with that. They also, there's also a lot of people out there saying that marketers themselves have forgotten what it means to be a marketer, that they don't really remember that it's about the four P's or they haven't been trained appropriately. I also don't agree with that. So there's a lot we can get into. But I think tldr you can sense just in the way I'm even describing this, there's a lot of frustration out there. And that's, that's what's leading to this conversation.

Do you think, like, why aren't marketers given the resources that they need? That's the big question here. Because the money is there. And then it's just about how do, how does do executives decide to divvy it up? Is that a skills gap in the marketer's ability to get the money and pitch the value? Is it just a different complete set of values? Or like, why, why can't we get the resources?

Yeah, I think we're caught in a little bit of a vicious loop. And what I mean by that is historically, you know, you have, you have CEOs, boards and investors who want to grow their companies. That's, that's their ultimate objective is growth, right? Bottom line growth, revenue, period, End of story. And many of them are not trained marketers. They don't understand marketing deeply. What they understand is the P and L. And so, so what we've seen happen, certainly over the last, I would say 10 years is a movement, particularly in B2B SaaS. I think we see it a lot, this movement towards orienting marketing in the direction of having accountability for pipeline. And the reason for that is that historically, when marketing hasn't been held accountable for pipeline, I mean, it used to be MQLs, right? That's what everybody used to measure marketing, qualified leads. And unfortunately, when, when that's what we were reporting on, what we would get back from the rest of the organization is these leads suck and I can't do anything with them. And there was, there was, it was very difficult for marketing to prove how it was contributing to measurable, concrete revenue in the P and L. Because at the end of the day, again, that's what CEOs, boards, investors care about. There's all kinds of great leading metrics that marketing can speak to. But if it doesn't translate into money, then for those constituents at least it doesn't matter. And you can think that's a good thing or a bad thing, like I'm not here to cast value on on that. But that is a fact. Okay. And so what's happened is the marketing profession in general, certainly in B2B tech, has shifted. And when you go to marketing events these days, you'll hear it said all the time, like, we have to stop talking about MQLs, that has to end because it's not working. And we have to start talking about pipeline, contribution or even like revenue that has been directly generated or sourced or influenced from marketing. That's the language that CEOs, boards and investors are able to understand and willing to hear. And so I think in some respects that's been a really good shift because it's helped align marketing with the things that the people, and I would add CFOs to that mix, by the way. It helps us align us to the things that the people with money and budgets and the ability to free up money care about. So that has happened. But at the same time, when you start to align marketing to P and L all of a sudden, then you do have this shorter term mindset because you're looking at the P and L in terms of targets in month and quarter, et cetera. And the things that contribute to hitting targets in month and in quarter are, are these like short term demand gen plays? And it is, it's a vicious loop because like it works in the short term, but it produces a learned dependency in the sense that like, the more you fail to invest in brand as a foundational asset, the more you become dependent on short term plays to hit your numbers. So there's a compounding effect that's, that's happening and I think we're suffering from. And to like circle back to your original question. To me, the piece that's missing, I don't actually think that I wouldn't blame marketers for a lot of this. I mean, I do think that we hold some ownership for educating people about this dynamic and why short termism ultimately is a bad thing. But I think this is a systemic challenge that we're dealing with and it has to do with CEOs, CFOs, boards and investors and what they understand to be true and how, how they understand what, what drives growth over the long term. But also systemically, certainly in the pavilion ecosystem, most of the companies we deal with are venture capital or private equity backed and what that means is that there are very defined time periods during which you have to hit certain growth milestones. PE likes to exit in three to five years. Venture capital, you know, the money runs out at a certain point. And right now we still, for better or for worse, are living in a time where there's just not a lot of money unless you're a sexy new AI tool. And so the reality is you either hit your growth targets and generate enough money to keep going, or you generate enough enterprise value that somebody's willing to continue to give you money to keep going until you can hit your growth targets. Like those are just the two realities unless you're bootstrapped. And that's why you see more founders going the bootstrapped route. You see people like Pavilion's founder Sam Jacobs talking about profitable, efficient growth. Because like a lot of people hear that and they read it as being anti brand. It's not. What it is is it's pro independence. Meaning, like if you're growing profitably and efficiently and you're, and you're generating cash, you don't have to be completely beholden to your, your, your investors and your board. You'll have the Runway to keep going regardless of whether you get another round of funding. So this is a very long answer to your question. I hope that's what you're looking for.

Yeah, and it's, you know, I've been speaking to a lot of people about

this topic and the kind of conclusion.

So we're saying, yeah, marketers need to educate executives. And you said we can do that up to a point. But almost everybody that I've spoken to, or I would say everybody I've spoken to pretty much said it comes down to the CEO and whether they believe it or not. And if not, I basically have to change companies. You speak to a lot of marketers, you have a whole ecosystem. Do you know of anybody that's been able to educate themselves into getting brand budget or into not thinking? So short term, is this an actual thing that you've ever seen?

It's a great question. And I would add, by the way, just to back up for one second, I would add it's both like vetting the CEO you're going to work for, but it's also deciding do you even want to go into the VC or PE backed ecosystem? Because that also is a choice. Right? Like, and you're choosing to be a part of a system that has this high growth, short term return mindset. And so you might want to choose a company that's bootstrapped or that isn't, you know, VC backed. But your question is like, have I ever seen anybody educate their way into it? This is a tough one. You know, I don't know that I can think of a concrete example. What I, what I can think of is that there are CMOs who have been big brand CMOs who have placed big bets and they've paid off. And I think, I think it's like, there also is a willingness to stick your neck out, and if you're able to do it successfully, you build trust that way. Some of the ones I'm thinking of, like latani canant at 6 sense is a great example where she's been doing, you know, events that aren't necessarily like revenue driving events and investing in community since the early days of six Sense. And that has really, really paid off. But, but I think she's done it successfully. So there's, there's a little bit of a, like, is this a, a chance you're willing to take? Because I think also as a cmo, you can stick your neck out and take big bets, and we should all be doing that. But if they don't pay off, and if you don't have a CEO that believes in this over the long term, that's when you're risking your career. And that's where I think marketers feel stuck. Because a lot of us, a lot of us think, I know what I should be doing. I know there's a great big bet I could place, but I also know that there's zero tolerance for failure. And so why would I do that to myself? And it, it forces suboptimal decision making. And by the way, this is part of why Pavilion advocates so strongly for revenue executives to have guaranteed severance. Because, because we think it's actually better for the company because it reduces that, that fear, that dread that the CXO feels, and it gives them the conditions where they're like, okay, I'm going to place this big bet and if the worst thing happens, I have a cushion. And so it's, it's okay for me to take this risk.

Is there zero tolerance now for any kind? Because that makes it sound like you can't experiment at all.

No, I don't want to give that impression. I think there's some companies and CEOs where there's zero tolerance and they're operating out of a place of fear and they don't really believe in marketing. And so those are environments we're trying to like, place Bets and, and use that as the way to, to educate the CEO is a much riskier proposition. But I know I wouldn't say that that's like the general environment that we're operating in.

You mentioned earlier that you don't think it's such a bad move for CMOs to move into a CRO. Is that, that's what you said?

Yeah, I did say that. And that's controversial these days.

Yeah, there's a lot of conversation around that. Are you open to talking about it?

100%. You can ask me anything. Yeah.

So just elaborate, tell me your thoughts. Like this journey, I know there's a lot of people who think that that's not good for marketing or like it leads us to this short term thinking. How does it support a company or marketing in general or the person in the role?

I find it very disingenuous that people, on the one hand, it's often the same people who are the loudest ones saying that marketing has lost its way and then complaining when marketers go be CROs. And I think that is incredibly ironic because there is no law or rule out there that says that a CRO has to be come from the head of sales, for example, or is primarily a sales position. CRO is a Rorschach test. It is a title, it is whatever you want it to be. But at the end of the day, if a company is hiring a chief revenue officer and look, there's also different scopes there. Some companies hire CROs and that CRO oversees some sales, marketing and customer success. Some companies hire CROs and they sit alongside a CMO. So you know, again, this is why I say it's a Rorschach test, because it can be whatever you want it to be. But to me, if a company is saying we need to find one person to lead revenue for our company and we believe that the marketer is the best one to lead revenue, how is that not a good thing? I genuinely don't understand people who rail against this because to me this is finally a company and a leader saying we recognize that marketing drives better long term value in many cases than sales can do. Right. And we're going to invest in it and we're going to give you leadership because we understand that as a marketer you're better aligned to the long term needs of the company. And that's why in many cases we're going to have you also run sales.

Yeah.

In addition to marketing. Like how is that a bad thing? I've, I've heard People literally refer to it as marketers capitulating and giving in. And to me it's like, no, this is a marketer stepping into a new level of power. And by the way, it doesn't mean that being a CMO is somehow less than. I'm not implying that. I'm just saying that if a company decides they want one revenue leader and they can choose between the person with the sales background, the person with the marketing background and the person with the CS background, and they choose the marketer, to me, we should be celebrating that.

Yeah. When you say it that way, it makes a lot of sense.

What do you think that the other

people are thinking it means when they're putting it down?

I think, and I could be putting words in their mouths. And so apologies to anybody for whom I am inadvertently paraphrasing. But the way I have read this, I mean, literally the word capitulate was used and I was flabbergasted when I saw that because to me that implies that we're somehow giving up on marketing. Right. Like if you're capitulating, you're giving in, you're saying, okay, you win. And, and I think to me that's just wrong. Like if you're a CMO and you take a CRO role and you're giving in and saying, I'm not going to do marketing the way I think it should be done, then then that's on you as a marketer. Like if you've been given that responsibility and you're not using it to drive home the value of marketing and brand, that is your failing.

Yeah.

Not anyone else's. So I think, number one, that's, that's a problem. I think a lot of them also are, feel strongly that there's something wrong when a company appoints a chief revenue officer and they put marketing under that position. And look, as a head of marketing, I'll be upfront and say, I don't want to work for a CRO. I want to be the senior most marketing person reporting directly to the CEO in the company. And so in many cases I agree with that. Like, unless I'm the CRO, in which case selfishly, great, I'll run it. But, but I, you know, it, it's, it would scare me to report to a CRO who came from a sales background because I would be worried about this gravitational pull towards becoming very short termist. So I understand that, but I don't understand when we, when we think it's a bad thing that the marketer rises to that role. And people by the way will take issue with me saying rises. And I'm not saying that to imply the CRO is better than the CMO or should be. I'm just saying it to acknowledge that some companies have made the choice to put that seat above a cmo. That is just a fact. And when the CMO then becomes a CRO, it is factually, objectively like rising in role. So I don't always want that to be the case, but that is the case in many companies.

It also encapsulates more responsibility.

Yeah, if you're overseeing CS and sales and marketing, yes, it is an increase in responsibility.

Do you think it's just because the ones who say that we're giving up if we take that role?

It feels like

apprehension against taking responsibility for something for.

I just find it candidly offensive because I don't think anyone should judge somebody else for the roles they take. First and foremost. Like let's just stop there and be like if you're sitting there judging somebody for the job they took, shame on you. Shame on you. No matter what the job is, it is nobody else's business. The job that someone else takes and the reasons they take it. You don't know what they're trying to do in their career. You don't know what their life situation is. Like I flat out think that it is wrong and harmful to ever judge people for the jobs they take. And like look as pavilion I will come right out and say it's not our job to tell people what jobs they should take. It's we see our role as like we should be educating and empowering people to be successful no matter what go to market job they want. Like we're not going to support you if you want to leave and become a doctor or a therapist. But if what you want to do is be a go to market executive, it's not our position to tell you what your job should be. It's our position to say, hey, you tell us your goal and we're going to help support you. So that's how I think about it.

It's really interesting that people have very strong opinions about this. I can't really wrap my head around it, but I guess to each their own. And I wonder if when you move into that role and I guess I again, this probably really depends on the person who is moving into the role and the company that they're working for. But I wonder if you've, if you've

always, if you always have had a

marketing background and you move into a CRO role, what does that do for. How does that shape the way you now think about marketing?

Yeah, it's a. It's a good question. And I think it's like, how does it shape how you think about marketing and also how you think about sales and cs. Because if you're in a CRO role, ultimately you are responsible for revenue. And I think that this is, as we talked about earlier, a lot of this is starting to happen with marketing anyway. So there are plenty of marketers out there that already have what it takes to be a great CRO, because they're thinking along these lines, whether you agree with it or not. But when you become a CRO, you're. You are judged on the money, on revenue, on profitability. That's. That is the measure of your worth in that role. And so you have to allocate capital in human resources and develop strategy in such a way that is going to ensure the company hits its revenue targets. And when you sign onto that role, you're signing onto the targets, by the way. So regardless of what those targets are. And I think that's where it forces us as marketers to make hard decisions, but in a good way. Right? Like, this is. This is where you will finally be in a position to really say, like, what is the right split between sales and marketing and customer success? Because let's not forget that expansion is such a valuable source of revenue as well. And like, how should all these teams be supporting each other? I think, I think that's the point where, where we really have to look at it agnostically and make the best decisions for the company. And you do need to balance short and long term because if you plan to stay in the role for any length of time, your decisions that you make today will come back to either bite you or support you in 6 months, 12 months, 18 months. And so you're in this way, like, in some ways, I'm kind of arguing for a CRO role, even though in many ways I don't agree with it. But it does, it does create a sense of alignment because you're having to, like, look holistically across all functions and make this decisions that support the good of the whole business.

Kathleen, this feels like a good moment to wrap it up. This has been a really, really insightful chat. I'm really glad that you were able to join me today.

Thank you. I feel like we had a spicy conversation, but hopefully people find it useful.

I think they will. We haven't had this conversation yet on the podcast, so it's nice to have your unique perspective, especially because you are talking to so many different go to market roles all the time in your role at Pavilion. For those who are watching, please do connect with Kathleen. If you're not yet in Pavilion, check it out. I've been a Pavilion member for like a year and a half now, I think, and it's a really wonderful community. A lot of great people in there, a lot of great education and events. And if you enjoyed the episode, please give it a like and a share and we'll see you next time. Goodbye.