Not a long time ago, C-suite meant a small, chosen set of the most influential movers and shakers in any organization such as the CEO, CFO and the COO. With recent digital disruptions and business transformations, firms have recognized the need to break down traditional functional silos by creating smaller, dedicated departments to deliver seamless customer experience across channels. Titles such as the Chief Information Officer, Chief Marketing Officer and Chief Technology Officer are now a norm and part of the cream of the crop, the C-suite.
The changing corporate environment and increasing global competition is presenting organisations with newer challenges with no historical precedence, thus pushing firms to adopt new ways of addressing them. Function such as cybersecurity was not a pain point earlier has become critical now, and bringing in a Chief Security Officer in an IT or a data-based company plays an instrumental role in keeping cyber tragedies at bay. Most of the recent introductions to the alphabet soup are an outcome of significant evolution in businesses and innovations in technology. Google has a Chief Internet Evangelist who contributes to global policy development and continued spread of the Internet while Facebook has two Chief Privacy Officers to protect user and company data.
Closer to home, the introduction of unique roles such as of the Chief Innovation Officer (CIO) by industry giants like Bharti Airtel, Panasonic India and by young start-ups like FreshMenu has made it one of the hottest C-suite roles in corporate India over the past few years.
Contrary to common belief, innovation is now not only the domain of lean and agile start-ups but also the need of the hour for bigger players to stay relevant.
Recent Inflation in C-suite
Since firms today strive to deliver a stronger customer experience, there’s been a shift toward creating leadership roles focused on customer experience with titles such as Chief Customer Officer or Chief Relationship Officer who not only play an instrumental role in developing and marketing the products but also decide how the end-product reaches the consumer and govern all interactions around it. Similarly, the importance of data mining cannot be overlooked in the current business scenario, and thus many companies now have a Chief Data Officer.
Small companies and start-ups have also jumped on the wagon, bringing in numerous C-level positions when they are probably not required. This raises questions on the prestige and accomplishment that top titles once signalled. While the ever-expanding grandeur in titles is certainly working out for some firms, being non-strategic about it can add to the confusion, and contribute to the lack of innovation and agility. With the industry witnessing an unrestrained addition to the C-suite with titles such as Chief Learning Officer, Chief Risk Officer, Chief Brand Officer, Chief Strategy Officer and even Chief Happiness Officer, the trend of new C-suite roles is exploding.
Ambiguity in roles and dilution of power
While it is true that organizations need more leaders to head specific departments in today’s complex business environment, there are also instances where the actual purpose and functionality of these ever-expanding striking designations are censured. The most perplexing aspect would be to exactly understand what a chief officer’s role within an organisation would entail as more chief-officer-acronyms are created.
The primary purpose of creating dedicated departments and assigning a C-title is to allocate tangible results-focused responsibilities to teams who will also look ahead to important futuristic trends. However, the sweeping shift in the structure of hierarchies where there is no need to create additional roles can lead to confusion among the top management as well as the middle management employees.
An organisation with too many chiefs not only dilutes the power of the CEO but also hangs on to the problem of who takes the responsibility and accountability. While the chiefs share a common singular vision for the firm’s future, it gets challenging to have everyone in the room agree with day-to-day business decisions leading to a lack of synergy amongst the leadership. In an overstaffed C-suite, where specialization has been narrowed to a pinpoint, it is easy to form new titles and departments but difficult to get work done.
For instance, a consumer goods company appointing a Chief Branding Officer along with a Chief Marketing Officer is bound to create overlaps in the roles and responsibilities of both the roles. Similarly, having a dedicated Chief Happiness Officer underscores few key responsibilities of a Chief HR Officer thus leading to duplicity in the two business functions. Some firms have a Chief Creative Officer, a Creative Director, and even an Associate Creative Director all heading the same function with a handful of team members, which blurs the actual roles and responsibilities of the department, negatively impacting the agility of the team.
A gambit to attract & retain high-level talent?
Interestingly, a lot of companies end up inflating their C-suite and adding numerous fancy titles to show a particular functional area's value and clout. For many firms, expansion of the C-suite is also a crucial hiring strategy, especially when they are hiring for senior positions in much sought-after fields with a shortage of quality talent.
Some organisations and recruiters believe that instead of conventional titles like VP or Business Head, offering a C-suite title becomes harder to decline and appears to add a lot more value to a job seekers profile.
HR departments now display a greater focus on cutting back the transactional time & money spent during recruitments, and thus title elevation, a heated battle during annual reviews, is also a good retention strategy.
When is the right time to add a new chief?
Firms adding new titles to their C-suite must ensure that these titles are specifically tailored to meet the growing business needs of a company; and not a consequence of modern office culture and offer negotiations.
Any new C-suite title addition must be geared towards helping the firm function as a strong team of true innovators iteratively and rapidly headed by a distinguishable chain of command. Every new title addition must eliminate friction between teams rather than adding to it, thus making it easier to scale organizations and create more shared value.
While, the jury it still out on the right number of leaders in a C-suite, there is no denying that rightful selection will not only enable the firms to sanction a pool of bright & seasoned minds to act as action CxO’s of their respective arenas, but also result in higher productivity, competence and superior management across all critical departments.