The C-Suite has swollen in recent years. Those who get to put the word 'Chief' on their business card may be happy about this, but it rarely does much more than load an organization's leadership board with unqualified people in pointless positions, making the decision-making process cumbersome and sacrificing agility at great cost to the company.
The causes of this bloating are complex and it is often hard to tell how necessary the roles are. One of the primary drivers is stagnating wages, which have seen some companies use elevation to the C-suite as a way to retain staff in lieu of raising their pay. Millennials, in particular, see it as a carrot. In Kantar's report, ‘Redefining the C-Suite: Business the Millennial Way’, which surveyed more than 2,300 leaders and Millennial managers, seven in ten US Millennials (70% vs 63% of US Gen Xers), defined as those born between 1980 and 1996, said that a C-Suite role is attractive to them. This has, however, led to the introduction of some particularly frivolous sounding job titles, many of which hold little actual sway. And rather than provide people with more job security, these fluffy titles actually just make them more expendable. As The Economist put it: 'Companies might hesitate before sacking an IT adviser. But what about a Chief Scrum Master? The essence of inflation, after all, is that it devalues everything that it touches.'
While this may be true though, a number of new C-Suite positions are genuinely becoming integral. New technologies such as AI are having such a major impact that it makes sense to introduce executive level representation to own implementation, while certain areas of business have been neglected should be properly exploited. We've outlined five such titles set to grow in prominence over the coming year.
Chief HR Officer
Employee wellbeing is increasingly moving to the top of the corporate agenda. Millennials now make up a third of the workforce and they are looking for more than just pay from their employer. They want flexible hours and support outside of work, they want career progression and for their employer to do good in society. Keeping staff happy is now far more complicated than simply throwing some money at them, and, unfortunately, it is also far more important. Unemployment levels are at just 4.1%, and HR leaders are experiencing the most significant skills shortage since 2001. The issue is particularly pronounced in the tech sector, with research from the nonprofit Computing Technology Industry Association (CompTIA) that surveyed 600 top business and tech executives in the US across a range of industries finding that 'at least eight in 10 US businesses are being negatively impacted by the lack of technology talent.'
Human Resources needs a seat at the executive table, and it is getting it. KPMG analysis of the CHRO role in FTSE 100 companies from September 2011 to September 2016 found that the proportion of CHROs who sit on executive committees rose from 68% in 2011 to 70% in 2016. A Korn Ferry Institute study, meanwhile, found that increasing investment in aligning HR practices with business objectives as a CHRO resulted in a 7.5% decrease in employee turnover and, on a per-employee basis, $27,044 more in sales, $18,641 more in market value, and $3,814 more in profit.
Chief Information Security Officer
The role of CISO was invented by Citibank in 1995 but it is only just really being appreciated. The last year has seen a number of major hacks, with organizations from Equifax to Uber being infiltrated by bad actors and suffering huge financial and reputational damage as a result. Organizations are still struggling to deal with the constantly evolving threat. Too often they are failing to put in place an effective strategy until after the damage has already been done, and with the influx of often poorly secured connected devices set to flood into businesses over the coming year, the problem is only set to get worse.
As a result, the CISO is growing in importance. Senior management knows that information security is a risk issue and it needs a guardian with intimate knowledge of how the threat from hackers is mutating, how they behave, and the solutions available. In 2017, we saw the likes of Lyft, Staples, and Delta add a CISO to their ranks for the first time, but each of them only did so after having suffered a data breach. Enterprises of all sizes need to get ahead of the game - even smaller enterprises who may think that they have more basic requirements for operational security and it could be an unnecessary cost. A hack could happen to anyone, and with a study conducted by the Ponemon Institute in 2016 finding that the appointment of a CISO reduced the cost of a breach by $7 (£6) per record, it is foolish to leave yourself vulnerable.
Chief Sustainability Officer
By 2020, Millennials will make up nearly 50% of the workforce and represent 30% of total retail sales. In surveys of Gen-Yers by Deloitte, 87% said they believe that 'the success of a business should be measured in terms of more than just its financial performance,' while they were also the most willing to pay more for products and services seen as sustainable or coming from socially and environmentally responsible companies.
Companies have had someone overseeing sustainability efforts for many years, with the position steadily growing in importance as it has entered the public consciousness. The role only reached the C-suite, however, in 2004, when Linda Fisher was appointed 'Chief Sustainability Officer' of DuPont. Since then, major brands including Kering, Mars, and Unilever have introduced the role.
The Financial Times defines ‘business sustainability’ as ‘a process by which companies manage their financial, social and environmental risks, obligations and opportunities’, with these often referred to as ‘profits, people and planet.’ The Chief Sustainability Officer monitors all of these. They deal with environmental issues such as water and energy use, as well as improving working conditions in their own organization and throughout the supply chain, creating better safety procedures and ensuring responsible sourcing. They are on the C-suite to promote understanding of how trends, risks, and opportunities over the mid- to long-term will impact business strategy and can ensure that they are included in decision-making processes.
Tim Koller, a leader of McKinsey & Co.’s corporate finance practice, notes that. 'If the forces in the world that relate to sustainability are going to be material to a business, it’s management’s job to take a longer view and figure out what to do about them. Because eventually, these things will affect cash flows.' The companies best at sustainability have it ingrained through their business, they put it at the heart of every decision. The Chief Sustainability Officer needs to make the company look like it is doing something, but it also needs to ensure that actually is, and to do this they need to be taken seriously.
Chief Growth Officer
The CGO is now a position in organizations as prominent as Coca Cola, Mondolez, and Colgate-Palmolive. Coca-Cola has even replaced its Chief Marketing Officer (CMO) role with a CGO, in a move that suggests it may not just be a trendy buzzword, and CMOs may be looking down the barrel of extinction in the coming years.
The responsibilities of a Chief Growth Officer (CGO) are varied, sitting across four key activity areas of the business - marketing, sales, product, and finance. These areas must work together effectively if an organization is going to generate profit, and with each department now expected to strategically contribute to company growth, they often end up working at crossed purposes or working on similar initiatives from only slightly different angles without knowing another department is working on it. The CGO has a unique view of each department, allowing them to align often conflicting agendas and better collaborate. For example, the first thing Mark Clouse did when he became CGO at Mondelēz was take inventory of initiatives across the company and eliminate repetitive or conflicting ones, which were approximately 20% of the total number. This is not a unique problem, it is one experienced at organizations of all sizes. CGOs are growth-focused brand builders, trusted CEO advisers, and internal connectors who align conflicting agendas.
Richard Stein, CGO at financial recruiting specialist Options Group, explains that, ‘The CGO role is growing and it’s rising in popularity, especially among professional services firms that understand client needs and who want to be front and center to achieve long-term revenue growth and stay competitive. The CGO is free to challenge the status quo in order to discover new pathways to growth. But the position holder also leads their organizations to a heightened sense of responsibility and purpose.’
Chief AI Officer
The importance AI will have in coming years is not in question. It will cause upheaval at almost every level of society, from the world of work to how we travel. According to a global survey of 260 large organizations conducted by market research firm Vanson Bourne on behalf of Teradata, a data and analytics company, 80% of enterprises are investing in AI and one in three 'believe their company will need to invest more over the next 36 months to keep pace with competitors.'
The argument that there should be an expert at C-Suite level to help companies fully exploit AI is persuasive. Many companies were caught short by the rise of the internet, assuming that it was either a fad or that their own limited knowledge would suffice. They soon went out of business as a result. Early AI adopters will - as early internet adopters did - have a tremendous competitive advantage. Those who go even further and take an ‘AI first’ approach, putting the tech at the heart of their strategy moving forward, will likely see even greater success.
Chief scientist at Baidu Research and AI guru Andrew Ng, for one, argues that a Chief AI Officer (CAIO) can fill a number of important functions necessary for ensuring that an organization is well positioned for adoption. They can take a view across the entire company to best understand its potential application in each department and the scale of the implementation challenge, designating AI expertise and technology from a centralized team according to need. A good CAIO will set out a roadmap around how to integrate AI with the company's overall strategy and fight to ensure resources are available where required, developing more knowledge about how AI works, which should help when selecting the right technology and not get bamboozled by the many salesmen trying to convince you that you have a need you really don't and that their product will solve it, which often it won't.
The lack of AI talent means that finding a CAIO will not be easy, and the majority of firms it is still not necessary. But at organizations mature enough in their data efforts, it should prove vital.