NEWS & INSIGHT
ARE CEOs UNDERESTIMATING VALUABLE CMO KNOWLEDGE ABOUT MARKET CONDITIONS? SCHOOL : Macquarie Business School, Macquarie University, Australia
The question of who CEOs turn to when they seek decision-making advice is the subject of a new study from Macquarie Business School. In its analysis of more than 500 CEOs and business owners in Australia, the study found that when faced with technological uncertainty, CEOs overwhelmingly backed the advice of their chief technology officer (CTO). However, when market conditions were unclear, they didn’t consistently rely on their chief marketing officer (CMO). Furthermore, when CTOs and CMOs gave conflicting advice, for example over a technological investment, CEOs were more likely to back the CTO. The upshot is that many CEOs believe they can judge market conditions without the help of their CMOs. The study’s authors believe that this is a risky mindset because it can lead technological innovations to be pushed forwards without there being the necessary market appetite. This is a particularly pertinent point for business in Australia, where there are questions over the country’s relatively poor innovation performance, compared to other advanced economies. “We need to help CEOs draw on their CMOs’ deep customer knowledge to drive radical innovation,” reasoned Nidthida Lin, an associate professor and co-
director of the Macquarie University Innovation, Strategy and Entrepreneurship (ISE) research centre. To illustrate the point, professor and fellow ISE co-director Ralf Wilden gave the example of the Iridium satellite phone. “The technology worked perfectly, but the high price and lack of network effects, like how you could only call other Iridium users, made it a market failure. Radical innovations are as much about market acceptance as technological breakthrough.” In this sense, larger firms can learn much from the agility of startups, according to researcher Saad Khan: “CEOs must keep financial metrics top of mind, but they also need to weigh market value, such as potential demand and customer needs.” The study also found that the best innovation outcomes arose when CEOs combined internal advice with external perspectives. It therefore recommends that leaders canvas the insights and opinions of consultants, peer networks and industry experts in addition to those of their leadership teams. EB
SHARE YOUR NEWS AND RESEARCH UPDATES by emailing AMBA & BGA content editor Tim Banerjee Dhoul at t.dhoul@amba-bga.com
Ambition • ISSUE 5 • 2025 11
Made with FlippingBook - Share PDF online