CEO of Novus Laurus. Business and transformation strategist. Digital technology, film and food investor.
Whether a startup or established company, founders, CEOs and boards are adding new roles into the C-suite. They include CFO, COO, CRO (revenue or risk), CTO, CIO (information or innovation), CMO (marketing or merchandizing), CDO (digital, diversity or data), CCO (customer) and CPO (people) . Who wants the noise and turf wars that so many roles might bring to a C-suite? And who is really required?
Traditional roles were created per function. However, have you ever heard of roles like CLO (legal or logistics), CPO (procurement) or CRDO (R&D)? Someone is executing those roles. In my opinion, they are not C-level roles. This is an indication that many new C-level roles are just window dressing for the public. Many have no direct revenue responsibility and are rarely measured correctly. The C-suite is a way to ensure alignment between roles that have an influence on revenue and company longevity. And over the years, traditional C-roles have remained unchanged and unquestioned despite changing times. What roles are really required in the current business environment? How should they interact? How should they be empowered and incentivized?
As companies encountered various market forces, new roles dedicated to revenue, merchandising, digital, diversity, innovation, customer and people were born. These roles were created to report to existing roles. They never really had power or budget to do too much. Despite the “chief” in the title, many of these roles are not truly included in the C-suite. Even if roles were created with great intent, they were never clearly defined, appropriately measured or even adequately heard to make a difference.
Most CDOs (all three), CCOs and CIOs (innovation) I have met had little or no budget, were stuck reporting to someone who was not the CEO and did not really have a voice in the C-suite. Also, the CMO, CIO, CDO and CCO tenure is known to be short. Why have roles that accomplish little?
For example, the CDO (diversity) should drive internal learning about diversity, set up inclusion initiatives and recruit diverse talent. However, few CDOs have the budget or voice to cause substantial change in the workforce. All of these functions belong underneath a CPO (people) or CHRO (human resources) anyway.
The other CDO (digital) must lead digital transformation but usually ends up writing tech requirements for the CIO (information) and has no budget to build anything. Also, they are focused on the customer side, where they butt heads with the CMO. Supply-side digital transformation is either ignored or languishes as it previously did under the CIO. Even if a CDO builds, the CIO and CMO shoot things down, and digital transformation fails. Ideally, the CIO should maintain new systems built by the CDO and eventually let an entrepreneurial CDO lead IT transformation.
CMOs (marketing) represent themselves well but are really just a support function to sales and should report to a CRO (revenue) or CCO (customer). While centralizing an independent marketing department to support multiple business units makes some sense, marketing is not directly responsible for sales. It just drives traffic. Actual sales are on someone else. While the CMO (marketing) does represent customer perspectives, they are often shot down by the CMO (merchandizing) or the CRO. CMOs need to report to someone who has revenue responsibilities and should be measured by sales attributable to any traffic driven.
The CIO (innovation) is a high-risk role. Few innovations created actually stick despite business case and product management justifications. Most companies fail to get their arms around disruptive new developments. They do not have a sustainable strategy to innovate and stay relevant. Whether building new or acquiring and integrating disruptive companies, quick and consistent improvements remain elusive as they focus on the near term. The CIO has to be given budget based on business cases and revenue responsibilities for the innovations realized. Both CIOs and CDOs need support managing internal change.
Even flourishing companies must constantly understand, cultivate and communicate with customers. An appropriately empowered and sales independent CCO must bring customer perspective and related customer engagement to the C-suite.
Many companies might be doing well as they stand. However, other than external business and market factors, it can be the existence of appropriate roles and relationships within the C-suite that determines company success and longevity. Revenue dies if it isn’t a top priority, and pursuit of revenue dies if it is not adequately supported. Further, revenue and entire companies die when competitors disrupt. Three important perspectives need constant oversight and nurture: ramping revenue, customer perspective and innovation.
Startups: When companies are finding their first large revenue streams, the founder undertakes most roles. The first two roles to add on can be for sales and customer perspective. Marketing, sales and production should be informed and driven by independent clarity on customer needs and behavior. A founder should institute a winning culture by either owning it or hiring a CCO. The head of sales or CRO is next but should only be hired after a lean sales cycle has been established. A COO for production needs to be added only after ensuring sales momentum. Some startups are founded with a CTO. However, CFO and other roles can be added later.
Established Companies: Most large companies have fallen behind on digital or innovation or both. The C-suite needs to be reconfigured. Add a CCO to represent ever-changing customer behavior and engagement. Create a CDO/CIO relationship where the CDO can independently build digital that is later maintained by the CIO. Next, empower a CIO (innovation) to navigate the company ahead of the current market. Give them budget and authority to plan, justify and manifest innovations for the long term. Large companies also fail to be nimble due to a lack of change management. It is probably time for a CCO (change). The CPO can report to the COO, and the CMO can report to the CCO. They probably do not need C-roles or seats in the C-suite.
In general, I believe an ideal C-suite should have a CEO, CCO, CRO, CDO (digital), CIO (innovation), COO and CFO.