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20 November 2010

Too Many Chiefs

Tag(s): Leadership & Management

In his book Chief Culture Officer: How to Create a Living Breathing Corporation Grant McCracken argues that corporations have deeply anticultural instincts operating within. They wish to believe that they are fully rational enterprises speaking to fully rational consumers. But the notion of rationality is always defined too narrowly.  He blames Adam Smith for this. He said in effect: “To understand this thing called a market, we need two parties engaged by interest, in an act of exchange…and that’s all. The social and cultural context we can leave aside.” So McCracken’s solution is to appoint a Chief Cultural Officer who will be the guardian of all things cultural and safeguard the corporation from its excessive rationality.

Do we really need all these chiefs?

The position of a Chief Executive Officer is clear. He is the highest ranking executive officer of an organisation reporting to a Board of directors. The Board will normally have a Non-Executive Chairman who will have the responsibility of hiring and firing the CEO. The only complication arises if for some reason the Chairman’s role is also seen as Executive in which case it will be necessary to clearly delineate the responsibilities of the two officers. In my opinion this is undesirable as it is likely to lead to confusion and technically must mean that the CEO is not the Chief Executive Officer. In some corporations the roles are combined in one but the Combined Code in the UK specifically recommends companies not to do this without very good reason.

The position of the Chief Financial Officer is also clear though it is less clear why he should not still be called the Finance Director. If we call him the Finance Director then it would be clearer that he is on the Board. The CFO will probably be on the Board but his title does not say so.

Some organisations deem it necessary to appoint a Chief Operating Officer (COO). His responsibilities are not clear from the title and will need to be carefully defined. In such organisations the CEO will probably hold strategic decisions for himself with the Board and delegate the execution of much of the strategy to his COO. In the vernacular such individuals are likely to have the character of a “fixer”.

A technically led company might appoint a Chief Technical Officer (CTO). In the past he would have been content with the title of Research and Development director but for some reason now prefers the label of CTO. Perhaps it implies greater seniority but that cannot really be true as the R& D director would have carried out the same functions and hold the same responsibilities.

Increasingly corporations are designating a Chief Marketing Officer (CMO). My marketing colleagues feel that they do not get enough presence in the Boardroom and so the CMO is more likely to get on the Board. However, in my model organisation the CEO will be the Chief Marketing Officer. When I was Managing Director of Sony UK I used to say that I was the Sony brand manager, among other things.

Many organisations have created the role of Chief Information Officer (CIO) who will oversee the management of information technology in the business. Clearly this responsibility has expanded to an enormous extent and perhaps clarifying where ultimate responsibility for directing all this traffic sits is worthwhile.

Now since Human Resources will have been involved in the creation of all these chiefs they are not going to be left out and sure enough we find some are called Chief Human Resources Officer (CHRO)  a corporate officer who oversees all HR and industrial relations operations for an organisation. For the sake of variety they might also call themselves Chief People Officer or Chief Personnel Officer.

The Chief Strategy Officer (CSO) has also recently emerged. Large corporations have long had a planning and/or strategy function and it might seem inevitable that the head of this department takes on a grand title. However, again I would expect the CEO to be the chief of strategy if not the Chairman. There is a risk of dilution of responsibility, accountability and clarity in handing out such titles.

So how many such titles have proliferated. Well in researching this blog I came across the following: CAO: Chief accounting officer · Chief administrative officer · Chief analytics officer · CBO: Chief brand officer · CCO: Chief channel officer · Chief commercial officer · Chief compliance officer · Chief communications officer · Chief culture officer ·  CDO: Chief data officer · Chief detail officer · CEO: Chief executive officer · CFO: Chief financial officer · CHO: Chief human resources officer · CIO: Chief information officer · Chief information security officer · CKO: Chief knowledge officer · CLO: Chief learning officer · Chief legal officer · CMO: Chief marketing officer · CNO: Chief networking officer · COO: Chief operating officer · CPO: Chief people officer · Chief personnel officer. Chief procurement officer · CRO: Chief risk officer · CSO: Chief science officer · Chief strategy officer · CTO: Chief technical officer · CVO: Chief visionary officer · CWO: Chief web officer  

In the public sector there are even Chief Officers which might seem admirably concise. This applies to not only police forces but also local council executives. But I am not sure we can learn much from the public sector. In the armed forces titles are clearly delineated but have lost any sense of relevance as the forces have been steadily eroded.  In 2008 it was reported[1]that “The number of admirals serving in the Royal Navy now outstrips the number of warships in the Fleet, new research has revealed. “  There were currently 41 admirals, vice-admirals and rear-admirals but with constant cuts the number of fighting ships in the Navy now stood at just 40. Since 1997 the Royal Navy had been steadily eroded losing one aircraft carrier, six frigates, four destroyers and three submarines. The 41 admirals would draw an estimated salary of £6.7 million which would have funded 420 able seamen at a time when the Navy had a substantial shortfall.

But W.S. Gilbert foresaw this in H.M.S. Pinafore when he wrote:

“Stick close to your desks and never go to sea,

And you all may be Rulers of the Queen’s Navee!”

At school in America in a stage version of The Wizard of Oz I played the role of the Chief General of 24 Generals. We had just one enlisted man in our army.

Copyright David C Pearson 2010 All rights reserved



[1]Daily Telegraph 24 September 2008 Thomas Harding, Defence Correspondent

 




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