Why HealthTech CMOs Lose Their Jobs

Article by | November 4, 2021 HealthTech, Positioning and Messaging

The median tenure of the Chief Marketing Officer position has shrunk to its lowest point in more than a decade—25.5 months—according to Spenser Stuart’s 17th Annual CMO Tenure Study. I hand-curated a list of 234 of the highest-ranking marketing executives at HealthTech companies and found the average to be 26.6 months. Compare that with the average CEO tenure (6.9 years) or the average C-Suite tenure (4.9 years).

Why do CMOs have such short tenures? What can you do to lengthen your tenure and grow your company?

The article headlines trumpeting the news spin the reasons as negative:

CMOs: Your Days are (Still) Numbered

CMOs: You Have 23 Months to Live

Chief Marketing Officer Is The Most Dangerous Title Around

What’s really going on? A number of reasons—positive and negative—bubble to the surface. Let’s look at four.

1. CMOs Move On—Like All Employees

CMOs move on because tenure, in general, has shortened. Americans have more past jobs on their résumés than ever before. LinkedIn reports that those fresh out of college have twice as many jobs in their first five years than those who graduated in the 1980s. That trend continues during the professional years. Workers expect to work for as many as 15 companies in their lifetimes.

CEO tenure has shrunk, too. Korn Ferry, a global organizational consulting firm, reports that in 2016, CEOs stayed in their positions for eight years; now only 6.9. {They’ve produced a helpful chart broken down by industry.)

HealthTech CMOs move on because the tech industry is notorious for high turnover. In fact, it ranks the highest at 13.2% annually. With healthcare cracking the top ten (9.4%), employee churn in HealthTech is not a surprise.

Technological expertise changes rapidly. Workers have to move to keep pace with growth. Even though marketing principles are more timeless, applying them to ever-changing technology can be just as difficult as learning the technology itself.

Talent in the tech sector is also lured away by greater compensation (including an abundance of quirky perqs like relocation expenses, free childcare, and dietitians on retainer) and high demand.

2. HealthTech CMOs Lose Their Jobs Because They Fail to Earn the Buy-In from the Rest of the Executive Team

If a HealthTech company is overly focused on its product and not the market, a CMO might lose the battle early. 

Digital transformation in healthcare has accelerated during the pandemic, but the thought process of leaders hasn’t. Many sales-first organizations still think that deals are best forged over cocktails or on the golf course. Digital buyers are more likely to have eliminated the majority of options before you even know they are shopping. [John Farkas explains in this video.]

Kat McDavitt has felt this disconnect both as a CMO and as a consultant to dozens of leadership teams: “C-Suites are not educated on the power and nuance of marketing. There is both an art and a science to marketing that isn’t obvious. It’s very easy for functional leaders to judge what they can see—so without education, the marketing function is at risk of being boiled down to sell sheets, PowerPoint templates, and advertisements.”

McDavitt is the founder of Innsena and principal advisor and head of the consultancy’s public affairs and market access practice. She previously served as Chief of External Affairs and Chief Marketing Officer for Collective Medical/PointClickCare.

“Unfortunately without a CMO who is willing to educate their leadership team,” continued McDavitt, “marketing can be seen as a shared service production shop. It’s on us as marketing leaders to explain the why behind the press release, the strategy behind the messaging in the ad campaign, and why those lead scores don’t matter if the sales team can’t execute and convert.”

Golden Spiral CEO John Farkas is much more pointed. He says, “If you’re a CMO and you’re not revenue-minded, you’re an interior decorator. You’ll spend time picking out new brand colors and designing a new logomark. That’s not marketing. That’s not going to grow your company. You’ve got a problem.”

3. CMOs are Fired Due to Pressure to Perform

Too many CMOs come into the role with a mandate. The leadership team might believe in and understand marketing, but they want and need quick results. The pressure could be coming from investors, a growing burn rate,  or two previous quarters of lagging sales.

The CMO takes the job and accepts the challenge to raise revenue and market share. The new chief is celebrated on the front end as a hero but will soon be whispered about as a pariah if the numbers aren’t met.

Sometimes, these CMOs reach for tactics and quick wins instead of dealing with the core identity issues the company faces.

Pressure can be positive. A HealthTech CMO who asked not to be named said,  “Pressure is a force that helps me continuously bring into focus the activities that will drive the most impact for our clients and ultimately our business. Where I feel the most pressure is not only in shaping how the market views us, but also in responding to shifts in customer/market needs, priorities, and investments.”

Kat McDavitt has also felt pressure and asked similar questions. “I feel the most performance pressure around the art of marketing.  It’s also the most consistently difficult area of marketing to measure. Does the industry have a positive perception of my product? Do my prospects know what my company does? How does my brand motivate my audience to act? There are ways to discover the answers to these questions, but they can be costly to uncover. Leadership teams committed to understanding and pushing the art of marketing are difficult to find but I consider that commitment another indicator of future success.”

These CMOs have responded to the pressure well. Many others don’t. The key to overcoming the pressure points and keeping the job is in the fourth point.

4. CMOs Lose Their Jobs Because They Never Get Market Positioning Correct

John Farkas likens some companies’ marketing to putting brown drops in a brown pool. There is nothing about that action that will help a company stand out. This overwhelming brownness could come from:

  • An over-concentration on the technology instead of the customer
  • No clear value proposition
  • An inability to differentiate from the competition

Mark O’Brien, CEO of Newfangled has been working with marketing executives for 26 years. He says, “If I don’t believe in their positioning at the end of our first year of working together, there won’t be a second year. Results don’t come without clear positioning.” O’Brien’s specializes in helping experts market their companies.

Often, getting positioning right takes objective eyes and ears. At Golden Spiral, our first job working with a new client is to help them see their way to it. We turn clients away who don’t have the passion or willingness to drill down far enough to find their way to positioning.

Getting positioning right is essential once you set sail with your marketing plan. John Farkas warns that the doldrums are ahead for every marketing campaign. “You’re heading from zero to something. You think you know what that something is, but the journey “from-to” is nerve-wracking. You’re bound to hit the doldrums. How you respond when you get there matters.”

“When you develop solid positioning for your company, you are bringing a unique perspective to your market,” Farkas continues. “If it is based on real-world problems that actual people have—and know they have—you will survive the doldrums and build your business.”

If you clearly understand your market and have an empathetic understanding of your buyer, you can rest in the confidence your buyer will respond. Otherwise, your career might disappear along with tens of thousands of marketing dollars.

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