Hail to the Chiefs

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Hail to the Chiefs

By Mark Hamstra - 03/01/2016

Topics such as sustainability, diversity, big data and e-commerce have gained considerable importance in the modern business world, so it's no surprise that many companies have assigned responsibility for these functions to top-level executives.

Clearly defining these new roles and others like them takes time, however. Companies often need to work though the challenges related to assignment of responsibilities and reporting hierarchies, for example.

"With a new position, you don't know how it's going to play out until the rubber actually hits the road," says Jose Tamez, managing general partner at Austin-Michael Executive Search. "It's one thing to put it on paper in theory, and it's another to put it in place in the practical world."

Often it takes companies a few tries to work out exactly what the parameters of a new role should be, and in particular how the new executive's role overlaps with that of other c-level positions.

"It's not only the role itself that needs to be defined, but it's the interactivity with other members of the c-suite," Tamez says.

Walmart is among the retail companies that have a top-level e-commerce executive: Neil M. Ashe, global president and CEO of e-commerce and technology. While Tamez says Walmart has done a good job defining that role, for many companies, such a role can present challenges. The function of e-commerce spans several silos within an organization, including marketing, merchandising, technology and operations.


"A chief sustainability officer makes sense now, but people would have scratched their heads if they saw that a long time ago."

–REBECCA RAY,
The Conference Board


Tamez suggests that when companies create a new role, they define it in terms of the accomplishments the new person needs to achieve, rather than the specific activities the person is responsible for.

"When job descriptions are written in the form of activities, as most of them are, it is hard to gauge how that function is performing," Tamez says. "If you write these job descriptions in the form of a list of three to five desired outcomes, for example, it's much easier to measure."

Tamez, who also runs a search firm for mobile technology talent called Mobile Search Partners, says roles tend to be much more clearly defined among pure-play mobile or e-commerce companies such as Zappos.

"At traditional brick-and-mortar retailers, those roles [around e-commerce and mobile] tend to get a little blurry," he says.

Another new role that has emerged at some retail companies is chief data officer. This also often overlaps with the roles of other members of the c-suite, including chief information officers and chief marketing officers, says Robin Copland, vice president of retail for the Americas at ThoughtWorks, a Chicago-based software and consulting firm.


"The way new titles impact a company and their customers comes down to clarity of role. With many of these new roles, that's not always easy."

–ROBIN COPLAND,
ThoughtWorks


"The way new titles impact a company and their customers comes down to clarity of role," he says. "With many of these new roles, that's not always easy."

The creation of new titles in the c-suite can be a natural evolution of existing positions, or a new way to describe expanding responsibilities, says Neil Stern, managing partner at Chicago-based retail consulting firm McMillanDoolittle. An example is the morphing of the old-school "manager of information systems" to the more modern versions of the role: chief technology officer, chief information officer or chief data officer.

"In other ways, some of the other titles have emerged to meet new business needs," Stern says. "Sustainability, as an example, was not as big an issue a decade or so ago, and now companies are recognizing the importance of this effort. The same for diversity."

Cincinnati-based Kroger named its first chief diversity officer–Carver L. Johnson–in 2006, overseeing both employee diversity and supplier diversity. The company at the time described diversity as "one of its six core values."

"In all of these cases, it takes some creativity to re-align jobs and functions, and there is never a perfect solution," Stern says.

Rebecca Ray, an executive vice president at The Conference Board in New York, says the evolution of new titles in the c-suite reflects the changing dynamics of the modern business environment.

"Who knew that [Harvard Business Review] would announce that the sexiest job of the 21st century was going to be somebody called chief data scientist?" she says. "That's a role that has come forward to address a need."

Chief sustainability officers are another example, Ray says, as companies become more focused on sustainability.

"A chief sustainability officer makes sense now," she says, "but people would have scratched their heads if they saw that a long time ago. It's reflective of a new need, or a new level of importance."

"Human capital" has also evolved over time, she says. It changed from "personnel" to "human resources" as organizations began to realize the importance of their people. Hence the eventual creation of the title "chief people officer," which Ray says she first remembers hearing being used at Southwest Airlines.

"We saw the evolution of the need to articulate the importance of people, and their ability to influence business results," Ray says. "If you have a chief technology officer and a chief financial officer, and then you also have a chief people officer, it's a way of saying, 'Here's something just as important.'"

Despite the proliferation of c-suite roles, the overall tendency in business has been for CEOs to have fewer direct reports, with each of the other members of the c-suite taking on more expansive responsibilities, Ray explains.

"That will have a ripple effect–after a while, after they have absorbed all that they can, they will start pushing that further down in the organization," she says. "People are looking to find more and more efficient ways to have c-suite leaders with a contained number of people, because it's easier to deal with complex issues. It's easier to have fewer people with broader understanding."

Sometimes newly created c-suite roles evolve over time to disperse some of their authority and responsibilities to other departments. A 2014 study by the Harvard Business Review found, for example, reports that after companies create the role of chief sustainability officer, that person initially has a broad scope but eventually relinquishes some responsibility and decision-making to leaders in other departments.

Some of the other titles that have emerged in recent years include chief ethics officer and chief compliance officer, Ray says.

Some companies–although very few retailers–have created a chief customer officer in order to centralize all functions that touch the customer, says Stern of McMillanDoolittle.

Copland of ThoughtWorks says the chief customer officer is one role that more retailers should consider creating, considering how important customer-centricity is to the retail sector.

"When you look at most of the 'chief' roles–traditional or new–within retail organizations, most are for functional areas," he says. "And yet everything you read or hear is about the importance of the customer.

"The industry as a whole is still siloed around functions and taking a very functional perspective, versus a customer perspective. For most retailers, there is no one person who's dedicated to bringing it all together. Customer experience is still largely treated as a separate function and not something that cuts across all functional areas. A chief customer officer should be the quarterback that brings all the players together."

Gary Preston, a former Ahold executive who is now senior managing partner at Preston & Partners Talent Solutions, Mooresville, N.C., says some demographic forces within organizations are at work in the formation of new "chief" titles.


"As organizations flatten their hierarchy, millennials redefine the roles, and executives look for ways to distinguish themselves from each other. 'I'm a chief' and therefore more relevant has become the new normal."

–Gary Preston,
Preston & Partners Talent Solutions


"As organizations flatten their hierarchy, millennials redefine the roles, and executives look for ways to distinguish themselves from each other. 'I'm a chief' and therefore more relevant has become the new normal," he says. "Some of this is fed by ego, and some of it is an attempt to provide non-cash compensation in the currency of corporate psychic income."

Preston cites the proliferation of titles such as chief talent officer, chief culture officer and chief omnichannel officer.

"It seems that wherever there is a niche, there is a chief at the helm," he says.

He agrees with Ray that too many chiefs in the c-suite make it difficult to manage.

"As CEOs become less enamored with too many direct reports, the pendulum will swing back to a sense of normalcy," he says.

Copland of ThoughtWorks also notes that there has been some backlash about certain titles being too "cute" or "quirky" to be taken seriously. He agrees that it also becomes a problem when the title of "chief" is applied to "everyone and everything."

"It can begin to dilute that role. But in most cases, these new c-level titles reflect roles and expertise that haven't been fully defined yet–practices that are still being developed–and that's OK," Copland says. "It's shortsighted to agree that businesses should evolve, but the people who make that business run should have the same roles and titles."

Some of the titles he has seen evolve at retail companies include chief experience officer, chief digital officer, chief innovation officer, chief listener, chief privacy officer and chief quality and product integrity officer. ThoughtWorks itself has a chief leadership officer, Jackie Kinsey.

"Love them or hate them, these new or 'unique' titles reflect how businesses are reorienting themselves around consumers' changing demands and employees' changing expectations," he says.

"It's no longer enough for certain skills or operations to be someone's second or third job. When every shopper today will tell you they are concerned about data privacy, it's not enough to just say, 'Don't worry, we have people working on that.' Consumers want to see companies taking responsibility, so having a chief privacy officer is one way to demonstrate a real commitment to that issue. Companies recognize that they need resources dedicated to innovation, digital operations, sustainability, customer insights, culture and employee relations, and with that, skilled leadership is required to grow these areas."