Growth capital governance: The CMO & organizational design

Another "state of marketing" report and CMO tenure is down to 2.5 years, or is it up to 4.2? Which got me to thinking about why certain C-suite roles even exist.

The CFO exists because capital demands stewardship. The COO because operations demand orchestration. Both roles map to fundamental enterprise requirements.

The CMO? A fascinating case study in how roles emerge from coordination needs rather than capital necessities, and what that reveals about systematic organizational design.

The reality is that shareholders don't care about marketing's organizational chart. They care about growth capital efficiency. The CMO's structural evolution isn't a personnel problem, it's a window into how companies can build competitive advantage through systematic growth capital allocation.

From capital allocator to coordination specialist

The CMO role has an interesting origin story that reveals much about how organizations lose systematic thinking over time.

Originally, marketing leadership controlled massive capital allocation decisions. Take Coca-Cola's marketing and promotions budgets, which scaled from $11,000 in the 1890s to $1 million by 1911 to $5BN in 2023, representing significant portions of enterprise revenue.

These early marketing leaders were sophisticated capital allocators, making integrated decisions across what we now fragment into separate functions: product development, pricing strategy, distribution channel investment, and customer acquisition. They understood marketing as systematic capital deployment across the full customer journey.

But over decades—accelerated by the venture-backed "growth at all costs" era—this integrated capital allocation discipline fragmented. In many firms, the 4P marketing mix was broken apart into discrete roles or functions.

The result? Many CMOs operate as promotions coordination specialists rather than capital allocators, managing campaigns rather than systematically deploying growth capital for maximum enterprise value creation.

This represents a significant loss of institutional knowledge that companies are only now beginning to recognize.

This evolution from capital allocator to coordinator deserves deeper exploration, which we'll examine in an upcoming analysis of how marketing lost its systematic thinking precisely when capital efficiency became critical.

How cheap capital masked design opportunities

For two decades, historically low interest rates allowed companies to avoid confronting growth capital allocation inefficiencies. The venture-backed growth at all costs environment enabled marketing executives to optimize for spending rather than capital efficiency.

When capital was essentially free, organizations could tolerate ambiguous accountability and fragmented decision-making across growth functions. Marketing leaders learned to optimize pipeline velocity and customer acquisition costs in zero-rate environments rather than building sustainable competitive advantage through disciplined capital allocation.

As interest rates normalized and capital efficiency became paramount, these design gaps became visible. Organizations discovered they had growth functions optimized for spending abundant capital, not allocating scarce resources for maximum enterprise value creation.

The growth capital allocation challenge

Most companies manage growth capital allocation through departmental structures rather than integrated systems. This fragmentation often reflects inherited organizational complexity rather than deliberate system design.

When growth capital allocation operates through disconnected functions (e.g., sales optimizing pipeline, marketing optimizing campaigns, product optimizing features, finance optimizing pricing) companies default to functional coordination rather than systematic capital allocation.

The go-to-market system is the firm's growth capital allocation engine. When treated as a collection of departments rather than an integrated capital system, it creates predictable efficiency gaps that coordination roles struggle to resolve.

Many CEOs inherit these fragmented structures and hire CMOs to "own growth" while maintaining the siloed architecture that makes systematic integration challenging. This creates a structural tension between coordination expectations and capital allocation reality.

Why growth capital governance remains fragmented

The CMO's structural evolution reflects broader organizational challenges with growth capital oversight:

Scope Ambiguity. Is the role responsible for brand building, revenue generation, customer experience, or corporate communications? Different organizations answer differently, producing inevitable role confusion and performance misalignment.

Capital Accountability Gap. CFOs can trace every dollar to cash flow impact with quarterly precision. CMOs often rely on proxy metrics, such as "brand awareness," engagement rates, pipeline influence, that can't withstand capital allocation scrutiny when budgets tighten.

Integration Without Authority. CMOs are asked to coordinate growth functions they don't control, with budgets fragmented across departments, toward outcomes requiring cross-functional alignment that hasn't been systematically architected.

These design gaps explain why companies continuously restructure growth functions, cycling through CMO, CRO, CGO, and other titles while the underlying capital allocation architecture remains unchanged.

The CEO's growth capital opportunity

Here's where the competitive advantage opportunity emerges: many CEOs already have potential growth capital allocators on their teams. They're just operating within coordination constraints rather than capital allocation systems.

A Simple Test: Give your CMO FP&A resources for 90 days and observe the pivot. Do they immediately request customer lifetime value modeling, working capital cycle analysis, and competitive positioning impact on pricing power? Or do they default to brand audits, campaign performance reviews, and agency relationship optimization?

This diagnostic reveals whether you have a natural capital allocator operating within coordination constraints, or whether you need to systematically redesign your growth capital architecture.

Two pathways to competitive advantage

Path A: Transform Existing Talent. If your CMO demonstrates capital allocation thinking when given the right resources, you've unlocked significant competitive potential. Support this transformation by ensuring they have direct FP&A partnership, clear growth capital efficiency metrics, and decision authority across growth investment horizons.

Path B: Systematic Architecture Redesign. If the test reveals coordination thinking rather than capital allocation instincts, you gain clarity on systematic design requirements. This insight allows you to architect growth capital allocation as deliberately as you architect financial capital management.

Both paths create competitive advantage. Path A unlocks existing talent; Path B builds systematic organizational capabilities that competitors struggle to replicate.

Building systematic competitive advantage

Organizations that solve growth capital allocation systematically don't just optimize current performance, they build competitive architecture that compounds over time.

While competitors debate marketing org charts, systematic allocators capture disproportionate market value through:

• Integrated Decision-Making. Short-term revenue optimization balanced against long-term brand equity building
• Dynamic Reallocation. Growth investments shifted across product, channels, and customer segments as market conditions change
• Capital Efficiency. Marketing investments linked directly to enterprise value creation rather than campaign performance
• Sustainable Moats. Competitive positioning that generates pricing power rather than promotional dependency

The role's future: agency over structure

The recent CMO remit of campaign coordination, brand management, promotional optimization faces structural challenges in capital-efficient environments. But the role's future isn't predetermined by market forces.

CMOs control their evolution path. Those who transform into growth capital allocators create sustainable competitive advantage for their organizations. Those who remain coordination specialists risk seeing their function absorbed by revenue leaders who think systematically about capital allocation.

Boards can accelerate this transformation by ensuring CEOs have the resources and mandate to test, develop, or redesign growth capital allocation systems. But the architectural responsibility—and the competitive advantage opportunity—sits with executive leadership.

The strategic implication

The CMO's structural evolution reveals a broader truth about organizational design: roles that emerge from coordination needs rather than capital requirements face ongoing structural pressure unless they evolve toward systematic value creation.

This isn't just about marketing's future. It's about how organizations build sustainable competitive advantage through systematic capital allocation. Companies that treat growth capital allocation as deliberately as financial capital allocation create compounding advantages that are difficult for competitors to replicate.

The question isn't whether the CMO survives. The question is whether your organization has architected systematic growth capital allocation as a competitive advantage, or whether you're still coordinating inherited complexity.

That distinction increasingly determines market success.