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Knowing When to Pivot, Persevere, or Stop

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You’ve got to know when to hold ’em

Know when to fold ’em

Know when to walk away

And know when to run…

– Kenny Rogers, chorus from The Gambler

The concept of “making a pivot” has become popular to use when talking about business growth strategy, but I have found it is commonly misunderstood. Moreover, there is often confusion about when to consider it, and how to evaluate the alternatives.

This article will explore the meaning and purpose of making a pivot, and the two common alternatives of persevering, or stopping.

Defining Business Pivot

In some respects, business is like the game of poker. It is full of uncertainty, some things are in our control and others are not, we learn from experience, and there are multiple players all trying to win. Your strategy is how you choose to handle all of those elements in order to create a winning hand. Over time, expert players learn when to double-down, hold, fold and when to walk away to realize the greatest odds of success.

Poker is a great metaphor for the concept of “pivot or persevere,” which comes from Eric Ries classic book, The Lean Startup. His definition of a pivot is a change in strategy without a change in vision. In the book, he goes on to explain, a pivot is a “structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.”

It is important to note that while a pivot is a change in strategy, it does not necessarily need to be a complete change in direction. In fact, pivoting is often about looking at what has worked, and seeing how you can make refinements or refocus your efforts using those insights. As Ries notes, “keep one foot rooted in what we’ve learned so far, while making a fundamental change in strategy in order to seek even greater validated learning.”

Where Pivot Fits in Growth Strategy

The search for Product/Market Fit is a structured process where a growth leader gains validated learnings by sharing a minimum viable product with prospects and listening to the feedback.

How does this work in practice?

Growth leaders and company founders always have a vision. To achieve their vision they need to define a strategy and objectives to get there. Classic strategic planning theory dictates that the chosen strategy can change over time (or with new learnings from the market) but the vision should remain the same. When deciding to make a pivot, the target market or the value proposition (features and benefits) of the product or service might change, but the vision for the problem to solve does not. Each pivot creates a new set of assumptions and features to validate, and the process repeats.

The objective for each cycle of this process is for growth leaders and their teams to make a decision by asking a simple question: Should we pivot, persevere, or stop?

  • Pivot: If all the feedback is negative (or even worse, indifferent) and the data does not support the leap of faith assumptions, then it may be time to pivot. As the definition states, this means to try a different strategy in pursuit of the original vision.
  • Persevere: If each experimentation cycle seems to be more productive than the last, meaning there are lessons gained and the data supports the leap of faith assumptions, then the obvious next step is to persevere for another round of refinement.
  • Stop: In extreme cases, typically driven by complete failure to validate any of the leap of faith assumptions, or running out of cash to continue funding the search for Product/Market Fit, growth leaders or company founders may conclude there are no other pivots to make and it is time to stop. The decision to walk away is never easy, but sometimes is the only rational decision left.

The 10 Most Common Business Pivots

Just as every business and solution offering is different, so are the potential business pivots. However, there are some common themes. Here are the ten most common business pivots as highlighted in The Lean Startup book:

1. Zoom-in pivot

In this pivot, a single feature of your product becomes the whole product. This might be because one specific feature gets significantly more traction than the rest of your product. In these cases, channeling your resources into that feature alone can allow you to get your product onto the market much more quickly.

2. Zoom-out pivot

This pivot is the exact opposite of the first example: Your current product becomes a single feature of a bigger product. In this case, it means you have established that there is an interest in your product, but there is reason to believe that it needs to be a part of a larger, more developed product in order to be successful.

3. Customer segment pivot

Based on your field research, you conclude that your product should be targeting a different type of customer. This comes from discovering that your product interests a different audience to the one you were originally pushing it to. You might not need to change your product much at all – only your customer persona.

4. Customer need pivot

Your solution is refined based on a greater understanding, or new revelations, about your customer’s needs. Sometimes this pivot is driven by the discovery that the problem you’re solving is not important enough to your customers, or they are unwilling to pay for it.

5. Platform pivot

This pivot refers to a change from an application to a platform, or vice versa. Most often, startups that aspire to create a new platform begin their journey by creating a single application as the foundation.

6. Business architecture pivot

This pivot was inspired by concept that a business can either be high-margin/low-volume (complex systems model, common in B2B solutions with complex sales cycles), or low-margin/high-volume (volume operations model, common in B2C solutions). Some organizations choose to pivot by switching architectures.

7. Value capture pivot

This pivot reflects a change in the way you make money from your product. An example of this pivot would be changing how you charge by switching to a subscription business model from a sale-by-sale e-commerce model.

8. Engine of growth pivot

In this pivot, you make a change in your growth strategy in order to achieve faster or more profitable growth. Most startups use one of three primary growth engines: (1) Viral growth, when current users recommend other users. (2) Paid growth, when you spend marketing budget on acquiring new customers. (3) And sticky growth, which is focused on customer retention and maintaining a low churn rate. In this pivot, you decide to change from one of these growth engines to another.

9. Channel pivot

In the Channel pivot, you change how and where you sell your products and/or services (for example, in stores, online, through partners, in-app, etc.) This pivot is typically in response to the learning that the same solution can be delivered more effectively through a different channel. In many cases, this will drive changes in the price, features, and competitive landscape of a product.

10. Technology pivot

In this pivot, you decided to change the technology that your project is built upon. This is often a result of learning you can achieve the same outcome with a different lower cost and/or better performing technology.

As you can see from these ten examples, business pivots can take many forms. Which pivot you choose will ultimately be driven by what you have learned from your market experiments.

The bigger challenge for growth leaders is determining when to pivot.

To Pivot, or Not to Pivot?

Deciding whether to pivot, persevere, or walk away is one of the classic entrepreneurial dilemmas. It is one of the most difficult decisions any growth leader, or company founder, will ever have to make.

Asking the honest question of “should we make a pivot?” is sometimes painful, but always important.

Making the pivot decision can be very stressful and difficult for teams to evaluate. To avoid the trauma, many growth leaders and company founders wait too long to consider a pivot, sometimes with dire consequences.

One easy way to avoid this “fire drill” is to schedule regular Pivot/Persevere decision-making meetings in advance. A best practice suggestion is to do this no more frequently than once a month, but not any less frequently than once a quarter.

The agenda for this meeting is simple: Ask yourself, and your team, what evidence do you have that your current strategy is getting you closer to achieving your vision? Are you making sufficient progress to believe that your original strategic hypothesis is correct, or do you need to make a major change?

If your product experiments are helping you make progress towards validating leap of faith assumptions, and the feedback you are receiving is resulting in material improvements to the product offering, then it makes sense to continue.

If there is no evidence of making progress, or it is insufficient, then a pivot may very well be the best course of action. In the words of Eric Ries, “If we’re not moving the drivers of our business model, we’re not making progress. That becomes a sure sign that it’s time to pivot.”

Sometimes all you need is more patience, additional capital, or a larger audience. Other times, you might need to make a strategy change. In these scenarios, you might have the right product but you are targeting the wrong customers, it’s too expensive, lacks essential features, or doesn’t solve the right problem. This is when you pivot, or if you cannot see any viable path forward, you choose to stop and walk away.

Danger Zone for Growth Leaders

There may be no bigger destroyer of creative potential or financial capital than the misguided decision to persevere in the face of negative or neutral market feedback.

Instead of pivoting, or walking away, some growth leaders are tempted to stay on course and try to power through the obstacles. By refusing to make a decision, or embrace market feedback, they run the risk running in neutral. This is a dire situation where they are neither growing enough nor dying – just consuming scarce human and financial capital, but not making progress.

Growth leaders and their teams should take comfort in the realization that failure is a prerequisite for learning. In this context, making successful pivots will put them on the path towards a commercially viable solution offering.

This is the reason that many successful entrepreneurs and corporate growth leaders who have decided to make a pivot will tell you that their only regret was not making the decision earlier and quicker!

Conclusion

If growth leaders take only one lesson from the economic turmoil of the last 24 months, it is that we are living in complex VUCA business environment. The best path forward is to develop a growth strategy, and then move quickly to execute it. This market-facing activity will sometimes result in the need to re-evaluate the plan.

The decision of whether to pivot, persevere, or stop challenges every growth leader and business founder at some point. Making a good decision regarding whether or not to pivot your business strategy can be the critical difference between success and failure.

-Onward

About the author: Kimball Norup is the founder of 1CMO Consulting, a business strategy and growth advisory firm based in Sonoma, California. To read prior articles, or sign up to receive future ones by email, click here.

Nine Things That Can Sink Your Growth Strategy (and Your Company)

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Nine things that can sink your growth strategy

“You may not be able to control the waves of change, but you can build a different boat.”

– General Stanley McChrystal

As any seasoned entrepreneur or senior executive will quickly tell you, there are many things that can sink your growth strategy, and ultimately your company if you are not careful.

While it is almost impossible to predict the future, you can prepare for some of the most common growth challenges. It starts by recognizing factors that could negatively affect the growth trajectory of your organization, and then thinking strategically about your options for responding.

For those organizations, and leaders, who successfully navigated through the nightmare of 2020 there were many such learning opportunities. It was a year unlike any other, and for growth leaders it offered many lessons on how to survive and thrive in a true VUCA environment.

In this article, I will share a few of the more common challenges that I have witnessed.

Learning from the Example of Others

If you are really paying attention as a growth leader, you can learn many valuable lessons by observing the failure of others.

By understanding the elements that contributed to the failure, and identifying if they exist (or could potentially emerge) in your operating environment, you can make plans to prevent these challenges from derailing your organization.

The best part of this strategy? You do not have to endure the pain and suffering yourself!

Nine Common Growth Challenges (and how to avoid them)

Here are nine of the most common growth challenges, and suggestions on how to avoid them in your organization:

  1. No vision – A key element of strategic planning is to define your Envisioned Future. Without a defined vision and long-term goals, your organization will be aimless. During the pandemic, many organizations panicked but ultimately found their footing and a path forward. Some leaders reverted to “survivor mode” and did not uphold their envisioned future, losing sight of where they wanted to go, and likely losing the confidence of their team in the process.
  2. Strategy not aligned with core ideology – Most successful organizations have defined their Core Ideology (mission, values, and purpose.) In the past 12 months, many organizations failed to align their internal and external actions with their stated purpose and values. This misalignment might not show any immediate effect, but it creates a crack in the foundation that will only grow over time. The best growth organizations are consistently true to their purpose and values, in good times and in bad. Many organizations have some form of “honesty” and “integrity” in their stated corporate values…a great question for growth leaders to ask is, “Did our actions align with our values in the past 12 months?”
  3. Neglecting talent – Growth leaders recognize that most problems are ultimately people problems. As a result, they focus on getting the right people on the bus, sitting in the right seats. During the pandemic, many organizations downsized to protect their bottom line. While necessary to some degree, many organizations will discover they cut too far and are now unable to capitalize on a recovery ahead of more strategic competitors who kept their talent intact.
  4. Poor situational awareness – Let’s be honest, almost every organization was completely blindsided by the global pandemic. Very few saw that disruptive force coming. However, by paying better attention to their operating environment and developing better situational awareness, growth leaders can begin to anticipate other potentially disruptive forces.
  5. Lack of a plan – The side benefit to developing greater situational awareness, is that growth leaders can do scenario planning with their teams. While it is okay to be surprised, there is no excuse for being unprepared. Successful growth leaders are always asking questions like, “What is the worst case scenario?” and “How would our organization respond to that?”
  6. Failure to take decisive action – Successful growth leaders have a strong, and consistent, bias for action. During the pandemic, many organizations hunkered down, hitting the pause button on executing their growth strategies. While some slowdown was prudent – and in many cases necessary – to completely stop created a huge loss of momentum, and ultimately sent an inconsistent message to the market. Many of these organizations likely will not recover from the resulting loss of talent and market traction.
  7. Failure to pivot – Closely related to taking decisive action, is knowing when something is not working and it is time for a change. Growth leaders know that sometimes the best way to get through an obstacle is to chart a new course and go around it! They innovate new products or services, enter new markets, or find new ways to position what they are selling. In the startup world this is call a “pivot” and it is a vital life skill for any growth leader. The organization either adapts or dies as a result.
  8. Lack of liquidity – There is an old business finance rule that “cash is King.” In truth, it is King, and Queen, and probably the entire royal court. Liquidity is the fuel for any organization, and without it, the organization will likely fail. The obvious connotation of liquidity is money, but it also applies to people, and capacity. Every growth leader must ensure the organization has the required resources necessary to execute its growth plan.
  9. Failure to communicate – Finally, successful growth leaders are exceptional communicators. They have an open, honest, two-way dialogue with all their constituents – both internally and externally. They do not fall victim to the temptation of putting lipstick on a pig. This clear and consistent communication not only serves as a vehicle to share strategy, it also provides a continuous feedback loop, builds trust, and ultimately helps to sell whatever solutions the organization is providing.

Conclusion

The pandemic has taught us that if you do not take the time to imagine the worst, you might not be prepared when disaster strikes. Bad things come in many shapes and sizes, and they do happen. Even to the best organizations.

By thinking about these common growth strategy challenges ahead of time, growth leaders will have a big head start on how to avoid them. Others in the market might stick their heads in the sand and hope their challenges will go away. But not growth leaders.  They confront adversity head on.

The good news – you can learn from the experience of others and prevent them from happening in your organization.

The bad news – if you ignore them, they can be catastrophic.

-Onward

The Core DNA of a Growth Leader

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“A leader’s job is to look into the future and see the organization, not as it is, but as it should be.”

– Jack Welch

In order for an organization to grow, someone needs to take charge of growth and lead the effort.

This is the job of the growth leader.

A growth leader can have many different titles within the organization. Most often, it is the CEO, President, CSO, Head of Growth, or Chief Marketing Officer who is responsible for driving growth for the organization.

However, the job title alone does not guarantee competence or success. The title does not define the capability of the growth leader. Rather, it is how they think and what they do, which ultimately makes a growth leader successful.

In my experience, the best growth leaders share some common characteristics. I call these attributes the core DNA of a growth leader.

What are they? Read on…

Have a Growth Mindset

Having the right mindset can dramatically affect your habits, attitude, and actions. Your mindset will have an outsize influence on your ultimate success.

A growth leader is never happy with the status quo. They do not acknowledge any limitations, and are always thinking about how to evolve and grow the organization.

They are hardwired to view the world as “glass half full” by default. This is a growth mindset.

In my experience, the best growth leaders are passionate about growth, and this passion is infectious. They build teams, and organizations, that are hyper-focused on growth.

Focus on Talent

Growth leaders know that almost all problems in business are people problems. By extension, growth leaders also know that all solutions in business are also people solutions.

Successful growth strategy is largely determined by the people on your team.

Growth leaders relentlessly focus on attracting, developing, and retaining the best talent for their organization.

They know it is critical to have the right people on the bus, sitting in the right seats. They also take swift action to get the wrong people off the bus.

The best growth leaders also focus on creating new opportunities and providing professional development for their team. These leaders make every effort to coach and develop talent. This includes identifying the unique strengths of each team member, offering constructive feedback to help them improve in weaker areas, and presenting opportunities that not only leverage individual strengths but also benefit the business as a whole.

The benefits are many. With a growth mindset, leaders can develop a high performing workforce while also boosting morale and the bottom line.

Lead from the Front

Growth leaders know that scaling an organization is a team sport. They cannot do it alone.

They also know that every ship needs a captain, someone with a steady hand on the helm who leads from the front.

Growth leaders get out of the building and into the market. Growth leaders love to get dirty alongside their teams.

Acknowledge Unknown Unknowns

The best growth leaders accept that there are many unknown unknowns. They realize that they cannot possibly know everything, nor can they predict everything. However, that does not mean they should ignore potential disruptive forces.

They acknowledge that we are operating in an increasingly VUCA (volatile, uncertain, complex, ambiguous) business environment.

This unknown dynamic is not always comfortable, or fun. However, it is real and very likely not going to disappear. This uncertainty is a given, so growth leaders make plans to deal with it.

One proven solution for growth leaders and their teams is to develop deep situational awareness of their operating environment. This will help them identify potential disruptions before they happen. Over time, they will gain confidence in “seeing around corners,” or predicting, which events have a higher probability of happening.

Armed with this insight and analysis, growth leaders can then start to do scenario-based planning as part of their management cadence.

Disciplined About Strategic Planning

Growth leaders know that it is not very often you can shoot from the hip and be successful. Instead of a tactical and reactive approach, growth leaders take a disciplined approach to strategic planning.

Growth leaders seek to identify and bridge the strategic gap between Core Ideology (mission, values, purpose) and their Envisioned Future (vision, objectives) for the organization. They do this by creating a strategy and comprehensive action plan to get there, then taking consistent action.

True to Their Values

Growth leaders help define and evangelize the values of their organization. They also genuinely demonstrate these values each and every day through their words and actions.

Many organizations have some unique values, but there is absolutely no reason that honesty and integrity should not be on every organizations list.

Misalignment between an organization’s stated values and actions is a key predictor of failure.

Think Like a Scientist

Growth leaders are confident, and smart enough, to acknowledge they do not know everything.

What sets them apart is they do not attempt to hide it. Rather, they embrace gaps in their knowledge, and take a disciplined approach to learn more.

They are always in learning mode, and intuitively understand that lessons can come from the most unexpected people and places, if you are receptive to them.

Growth leaders are always asking questions like “why?”, “how?”, and “what if?” in an attempt to unlock more growth, at a faster rate, for their organization. They think like scientists and set up contained experiments to prove or disprove their theories.

Learn from Failure

Failure is part of the game regardless of your industry or role, or prior success. No individual, or organization, wins 100% of the time.

However, what sets growth leaders apart is they do not let failure define them. A key part of a growth mindset is combatting the impulse to wallow in self-pity and self-deprecation and instead make every effort to learn quickly from failure in order to grow.

With a growth mindset, leaders are able to analyze poor behaviors or tactics, identify what contributed to their failure, and make deliberate changes to achieve better success in the future.

This relentless line of inquiry does not always yield positive or useful results. However, it does get you much closer to a better answer over time. As Thomas Edison once said, ““I have not failed. I’ve just found 10,000 ways that won’t work.”

MFGSD!

Last but certainly not least, all growth leaders share one common attribute – they have a strong bias for action. They embody the MFGSD ethos, and instill it in their teams.

This relentless focus on execution is perhaps the most important element of a growth leader’s DNA.

Until someone takes action, nothing will happen.

-Onward

Get the Right People on the Bus First

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“It is better to first get the right people on the bus, the wrong people off the bus, and the right people in the right seats, and then figure out where to drive.” – James C. Collins

Early on in my career, I learned a valuable business lesson from my father when he shared this pearl of wisdom with me:

In life, almost every problem is ultimately a people problem.

If I am being honest, the true gravity and impact of that statement was largely lost on me at the time. Furthermore, I cannot even remember the event that triggered the conversation. However, over the years (and all my successive senior leadership roles across a number of organizations) the absolute brilliance of his advice became readily apparent.

All problems are ultimately people problems.

By extension, all solutions are also dependent on people.

Why? Because in any organization it takes people, working together, to solve the problems and come up with solutions that serve clients/customers/constituents.

Whether you call them your people, your team, your coworkers, your colleagues, your talent, or even your workforce…people are the key ingredient for success in any organization.

The Bus Analogy from Good to Great

One of my all-time favorite business strategy books is Good to Great, by Jim Collins, where the author and his team researched a number of organizations in an attempt to decipher the “growth DNA” of great companies.

They had expected to find that the first step in taking a company from good to great would be to set a new direction (defining a new vision and strategy for the company) and then getting the organization committed and aligned behind that new direction.

What they found was quite the opposite.

They discovered this common pattern: Those executives who ignited transformations from good to great did not first figure out where to drive the bus (their metaphor for the organization) and then get people to take it there.

Instead, they first got the right people on the bus (and the wrong people off the bus) and then figured out where to drive it. These leaders essentially said, “Look, I don’t really know where we should take this bus. But I know this much: If we get the right people on the bus, the right people in the right seats, and the wrong people off the bus, then we’ll figure out how to take it someplace great.”  

Three Simple Truths

Collins also found that these so-called “good-to-great leaders” understood three simple truths:

  1. If you begin with “who,” rather than “what,” you can more easily adapt to a changing world. If people join your organization primarily because of where it is going when they joined, what happens if you need to change direction? You then have a problem. However, if people are on the bus because of who else is on the bus, then it is much easier to change direction.
  2. When you have the right people on the bus, the problem of how to motivate and manage them largely goes away.  The right people do not need to be tightly managed or fired up; they will be self-motivated by the inner drive to produce the best results and to be part of creating something great.
  3. Finally, if you have the wrong people, it simply does not matter whether you discover the right direction; you still will not have a great company. Great vision without great people is irrelevant. In fact, as many of us have witnessed in our careers, the wrong people can be a cancer on the organization that will literally kill it from the inside out.

Connecting People to Your Strategic Plan

When starting out on their growth journey, many organizations unfortunately begin on the wrong foot.

It is a common trap for growth leaders to be so focused on the “what” that they neglect to think through the “who.” What do I mean by this?

In the world of growth strategy, execution begins with great leadership. Great leaders have the ability to attract, retain, and grow the talent needed to get the work done. They also instill a bias for action (MFGSD!)

Growing an organization, no matter the size or industry, is always a team sport. You will never reach your destination without the right team in place.

Expanding upon the “right people on the bus” analogy, here is my quick and dirty playbook for how you can connect people and your strategic plan for growth:

  1. It begins with a roadworthy bus. (Ensure your organization and product(s)/service(s) are ready to go to market. Do your values as an organization line up with the value you deliver to customers?)
  2. Make sure you have the right bus driver. (Does the leader of your organization have the experience, passion, and energy to lead the charge?)
  3. Next, get the right people on the bus. (This is your core leadership team.)
  4. Followed by getting the wrong ones off the bus. Quickly. (One of the most important, and difficult challenges for leaders is to take quick and decisive action on those who do not belong on the bus.)
  5. Next, make sure everyone is sitting in the right seat. (Do you have the right people in the right roles.)
  6. Now, as a team, you can think about your destination. (What is your envisioned future? What are your long-term objectives?)
  7. Followed by, plotting your ideal roadmap to get there, along with planning for any unexpected detours you might encounter along the way. (This is where you define your chosen strategy and create a robust plan.)
  8. Start driving! (Now it is time to get out of the building, and get dirty.)

Great People Achieve Great Results

Growth leaders embrace the concept that all problems are people problems, and all solutions require people.

The best leaders focus on building a great culture, one that attracts and retains the talent they need to execute their growth plans. They know that great people will achieve great results.

A roadworthy bus, with the right driver, and the right people on the bus, sitting in the right seats, is a great start to reaching your desired destination.

-Onward

The Value of a Fractional CMO

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“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”   —Sun Tzu

The responsibility for developing go-to-market strategy and ensuring sales alignment belongs to the Chief Marketing Officer (CMO).

High performing companies know that marketing enables sales, and that this strategic partnership is a proven ingredient to driving sustained growth. So, clearly, having a CMO on the leadership team is important for any organization that wants to grow. However, it is not an easy job to fill or perform. There are a number of common traps making it difficult for CMOs to be successful.

Adding to the challenge, there are also many different archetypes of the CMO role. This can make it hard for organizations who want a CMO to find the right one – the marketing professional whose background and experience match what the organization needs to thrive.

Despite all these challenges, progressive leaders of organizations often decide they need the expertise of a Chief Marketing Officer but then discover they cannot justify, or afford, to hire for a full-time role. Are they simply out of luck?

Fortunately, there is an emerging solution. Organizations can engage the services of a fractional CMO.

What is a Fractional CMO?

The concept of a fractional executive is not new. For years, companies have been bringing in seasoned experts to fill interim roles or do projects on a flexible basis. This type of role is becoming more common across all the traditional C-suite and senior leadership positions, including the CFO, VP Finance, CHRO, CIO, and increasingly the Chief Marketing Officer (CMO).

A fractional executive is a functional leader contracted to take a part-time or fixed-term position with a client organization. They are often very experienced former executives who want more flexibility in their working life, enjoy consulting, and like having a variety of clients.  

A fractional CMO, as the name implies, provides all the strategic value that a full-time Chief Marketing Officer brings to the table. They perform the executive function of a CMO without forcing the client company to commit to the full-time salary and burden of a person in that role.

Perhaps the best way to think of it is as a flexible, part-time CMO. To borrow a technology term, you might call it CMO as a service. 

Is a Fractional CMO Different From a Marketing Consultant or Agency?

The short answer is “Yes” – a fractional CMO is different from a marketing consultant or agency.

How? Well, it comes down to the difference between strategy and execution. A fractional CMO will develop a comprehensive strategy and execute, whereas consultants or agencies have their own business model bias:

  • Marketing Consultants – Consultants are the experts you engage, typically on an hourly or project basis, to develop a strategy or perform a specific tactic. Once the solution is developed, either you are on your own to execute the plan, or the service is narrow and not a comprehensive marketing solution.
  • Marketing Agencies – Agencies, on the other hand, typically give away the strategy so that they can sell you their services. The more services they provide, the more money they make. This creates a conflict of interest that is difficult to sort out if you do not have an experienced marketing leader on the team.

A fractional CMO is that experienced 360-degree marketing leader who you want on your leadership team!

They will work directly with the CEO and other functional leaders to develop a growth strategy, and a plan to execute it. The fractional CMO then takes ownership of the growth plan to manage the marketing program and team. Since the fractional CMO is not in the business of selling services, there is no bias in their recommendations – there is no risk that they will recommend marketing tactics that are not suited for the business.

What Does a Fractional CMO Do?

In short, a fractional CMO does everything a full-time chief marketing officer would do. They are the senior executive responsible for growth strategy, marketing execution, and for ensuring alignment with sales.

Great fractional CMOs will also get their hands dirty. In collaboration with the CEO and the Sales leader, they will take the lead on developing a growth strategy and plan. Depending on the needs and capabilities of the marketing team, an experienced fractional CMO will roll up their sleeves and dive into those areas or activities where they can add the most value. Powered by a strong bias to action, a fractional CMO always leads the implementation and achievement of the growth strategy.

The Value Proposition for a Fractional CMO

There are many benefits to having a Chief Marketing Officer helping define the future and drive the growth of your organization. However, not every organization can afford or justify having a full-time salaried executive like a CMO on the executive team. These organizations can benefit from a fractional CMO who will deliver much of the same value proposition with lower risk and less cost.

Significant benefits from engaging a fractional CMO include:

  • Results – A fractional CMO will deliver measurable results. The statement of work (SOW) that the CMO and CEO define together will define the deliverables and KPIs that marketing owns. The fractional CMO will ensure that marketing delivers the results you need.
  • Experience – A fractional CMO brings a depth and breadth of experience that typically spans across many roles and industries. This is often much greater than what your organization could recruit on your own.
  • Cost Effectiveness – Because you are not paying the salary and benefits of a full-time high-caliber executive, there is reduced overhead cost to have a CMO on your leadership team.
  • Expertise – An experienced fractional CMO will have expertise across a number of marketing strategies and tactics. They will bring with them an extensive toolset of best practices.
  • Flexibility – Fractional CMO engagements are structured to provide the organization with the flexibility to quickly ramp up or down depending on what the business needs and can afford. This just-in-time approach to staffing an executive position is very attractive to many organizations in times of uncertainty.
  • Strategic Impact – A fractional CMO will hit the ground running. With a clear SOW and a mandate to transform marketing, they will cut through political red tape and internal hurdles, in order to drive growth. This accelerated time to productivity helps to deliver results quickly.
  • Marketing Leadership – Providing marketing leadership, oversight, and mentoring for the go-to-market team is a big part of what a fractional CMO can deliver.
  • Strategic Advisor – A fractional CMO will also provide the CEO and other leaders with unbiased strategic counsel by leveraging their experience and “outsider” perspective. This is a valuable point of view which internal teams often do not have access to.
  • Improved CEO Focus – Many CEOs get distracted by managing the marketing function, and managing marketing/sales friction. An experienced fractional CMO is a self-managing executive that will lighten the CEO workload by managing all aspects of the marketing department. This frees the CEO up to focus on other important aspects of the business.
  • Accountability – A properly structured fractional CMO engagement ensures that the CMO develops the growth strategy and implements the marketing plan. There is a built-in accountability for performance and results.

Common Use Cases for a Fractional CMO

As you can see, there is a significant value proposition for engaging a fractional CMO. What might be less clear are the common situations, or use cases, where a fractional CMO makes the most sense. Here are a few:

  • Emerging Growth Company – For smaller organization that have big growth plans (yearly revenue between $5-50M) engaging a fractional CMO will free up capital to bring on experienced implementers and accelerate growth.
  • Leadership Vacuum – Perhaps because of an executive departure, or by virtue of rapid growth, the marketing group is suffering from a lack of vision or leadership. In many organizations, marketing is an after-thought behind sales and thus largely ignored, delegated to a well-intentioned but inexperienced staffer, or handed off to outside agencies who have their own agenda. In either case, the marketing function and potential for growth go sideways without a capable leader. An experienced fractional CMO can create or rebuild a marketing organization, and provide mentorship and growth opportunities to the team.
  • No Growth Strategy – The senior leadership team and board of directors want growth, but are not sure how to develop a strategy or plan to achieve it. This is a common situation for an experienced fractional CMO to come in and take the lead.
  • Missed Market Opportunities – The organization consistently lags industry growth. New products or services have failed to launch effectively, and languish as a result. Aggressive competitors are consistently winning deals that the company used to win. These are all signs of a failing strategy (or lack of one!) A seasoned CMO is the answer.
  • Lack of ROMI Clarity – The company invests in marketing tactics like tradeshows and search engine ads, but has no idea what drives new business. This lack of insight and metrics means the company has no idea of its marketing ROI (ROMI). An experienced CMO will ensure this gets fixed.
  • Marketing / Sales Divide – Another common ailment in many organizations. In cases where marketing and sales are misaligned, or entirely dysfunctional, an experienced fractional CMO can quickly get things back on track. In the best run go-to-market organizations, marketing enables sales.
  • Change Management – There are cases where a CEO, board, or private equity company want to get an honest assessment so that they can affect change on the go-to-market organization. This is a perfect use case for a fractional CMO to parachute in, triage, and rebuild the marketing function.

Three Possible Actions…

When confronted with the strategic imperative to grow the organization, leaders can take three possible actions:

  1. Do nothing – Sadly, this is the most common path. Instead of investing in marketing leadership, the decision is to continue down the same path, expecting a different result. The poor results are entirely predictable, and preventable.
  2. Go sideways – Due to fear, uncertainty, and a lack of conviction, some leaders hand off marketing to a junior member of the marketing team. This well-intentioned and convenient solution generally does not yield much growth by way of results. After kicking the can down the road for a while, thoughtful leaders revisit the decision and bring in a seasoned marketer to define strategy, tactics, and execute.
  3. Go forward – Strategic leaders recognize the value of delegating the creation and execution of a growth plan to an experienced CMO. If they cannot justify a full-time CMO, they will engage a fractional one.

Getting Started with a Fractional CMO

A fractional CMO is a part-time CMO who delivers full-time strategic results. As an experienced CMO, they will not only develop growth strategy, but also own execution of the plan.

Regardless of the use case that causes an organization to consider engaging a fractional CMO, they will deliver significant value – from developing strategy, to aligning marketing and sales, to mentoring a marketing team, to market positioning and messaging.

Every growth organization needs a CMO…and with the fractional CMO option, there is no excuse for not having one.

-Onward