CMO Huddles

When Success Isn’t Enough: CMOs Facing the PE Firm Gauntlet

June 25, 2024 5:00 PM | Anonymous member (Administrator)

“I got PE’d” shouted an agitated veteran CMO of a $420 million tech company.

“Go on,” I said.

“You know this isn’t my first rodeo, I’ve got a proven process for connecting marketing to revenue and Marketing made its pipeline targets every quarter this year despite a 23% budget cut,” shared the CMO. “But that wasn’t enough for our PE firm, Sales missed their target by a few thousand, and then suddenly the axes came out, and now I’m on the street,” the CMO declared, “So, yeah, I got PE’d!,” they sighed.

A Common Issue Among CMOs

If this was an isolated incident I would have let it pass. But it’s not. I’ve heard a version of this story at least 5 times in the last 3 months from highly effective CMOs. From CMOs who’ve built measurable, scalable, and predictive revenue growth engines. From CMOs who have helped reposition their company after mergers in a way that resonated with employees, kept current customers, and attracted new ones despite the behind-the-scenes chaos of platform integration. From CMOs who have helped their companies grow 2x, 3x, and even 4x in one case.

The PE Firm Dilemma

I won’t try to get in the heads of the PE firms though I can’t help but wonder, “In what universe does relentless cutting of budgets and talent lead to growth?” I realize that not every PE firm takes a “slash and burn” approach but it sure seems to be the rule rather than the exception right now. [I hope to hear from some PE firms that have a more enlightened operating model.]

Strategies for CMOs in PE-Owned Companies

As an advisor to CMOs, this is a moment of reckoning especially for CMOs who work for PE-owned companies. Not that you ever got comfortable but it’s time to set your paranoia meter to 10:
  • If you haven’t already, track what is going on at the other portfolio companies.
  • Have an open line of communication with your fellow CMOs – take the lead and set up a WhatsApp group with them.
  • When cuts happen at another company, get the details, look for patterns, and play out how a similar cut would impact your business. And if something is working at one of your sister companies, test it for your business.

Since you know efficiency is king, queen, and rook, make these moves before being asked:
  • Optimize your lead capture funnel. If you aren’t doing A/B testing on every aspect of your nurture stream, get on this. There are partners out there like Spiralyze who can run proof-of-concept tests on their nickel and only charge you if they deliver. 
  • Re-audit your tech stack and trim all but the measurable value creators. Put the onus on the vendor to prove their worth.

Rebuilding Your Network

No matter how hard you work and how successful you might think you are, the axe may still drop.
  • Rekindle old friendships with former colleagues and bosses.
  • Make new friends. Join a community [CMO Huddles comes to mind ].
  • When a recruiter calls, take it and introduce them to at least 5 high-quality candidates. If you don’t know 5, then reread this paragraph!

Enhancing Your Personal Brand

Stop ignoring your personal brand.
  • Get out there. Guest on podcasts.
  • Write provocative posts that reinforce your unique point of view.
  • Create a video series. This exposure will be good for you and deliver added PR value for your company [even if it is self-serving, it doesn’t have to look that way].

Final Advice

Finally, make sure the next company that hires you is owned by an enlightened PE firm.

Written by Drew Neisser

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