What's in a name?

Written by: Alexander Garrett Posted: 01/04/2019

BL61_NamesThe corporate world has witnessed an explosion of unusual job titles in recent times, thanks to the increasing complexity of organisations and the influence of technology. Whatever the name, though, collaboration is key to getting the job done 

Alfred Sloan, celebrated President, Chairman and CEO of General Motors (GM) from the 1920s onwards, is sometimes credited with having invented the idea of the C-suite. In the process of turning GM into the world’s largest company, Sloan created a new prototype for senior management, distributing the profit and loss responsibility across the managers of his key business divisions, but bringing them together regularly to decide on matters above the divisional level. 

Other companies followed suit, establishing a central leadership team that would manage the individual divisions and jointly make key corporate decisions, including investment and strategy. 

The model lasted for 60 years or so until the 1990s, when new senior job titles started to emerge that had a more functional tone. The new roles had names like Chief Financial Officer (CFO), Chief Operations Officer (COO), Chief Technology Officer and Chief Talent Officer.

Scroll forward another 20 years and the profusion of job titles at the top company level – on both sides of the Atlantic – is unprecedented, not just in diversity but in the number of individuals reporting to the average CEO. 

Look through any listing of senior vacancies and you’ll find openings for chiefs in marketing, technology, knowledge, information, creative, customer engagement, experience, digital transformation, compliance, risk, diversity – the list goes on.

And that’s not even including the more whacky titles like Chief Happiness Officer (online shoe retailer Zappos may have invented this one), Chief Heart Officer, Chief Troublemaker or Chief Storyteller.

Creeping Americanisation

So, what’s in a name – and are the titles a company chooses arbitrary or do they have a greater significance? In the UK, adoption of the C-suite is a relatively recent development and is not yet universal. 

Charles Clarke, a former KPMG Partner and now Consultant with Channel Islands executive search firm Thomas & Dessain, says: “There’s a creeping Americanisation in the language we use and, in this case, it reflects the flat hierarchy approach many US companies favour, in which everybody is chief of something.” 

Tech companies in Silicon Valley started by bright people with diverse skill sets have been instrumental in inventing forward-looking job titles. Some of those adopting similar roles over here may hope a little of the kudos will rub off, says Clarke. 

Nevertheless, he adds, it’s important to distinguish between the job title and its content. “Under the UK corporate governance code, someone who’s a statutory Director of a company has formal authority and responsibility. 

“It might help a little bit with recruitment to offer more exciting job titles, but someone looking at a job description closely would probably see through it if there isn’t genuine substance behind the implied responsibility the name gives.”

In Clarke’s view, whether you call the most senior executive the CEO or the Chief Executive or Managing Director, it’s the same role. What makes it confusing is that some organisations – especially banks – have taken the title ‘Managing Director’ and given it to less senior executives. “In the boom years, everyone wanted to sound important,” says Clarke. 

Equally, CFO is often pretty much synonymous with Finance Director and COO with Operations Director, in the sense that these are often the most senior person in that role in the company. 

Increasing complexity

However, Charlie Grubb, Managing Director for Robert Half Executive Search UK, points out: “As companies grow to a mid-sized business, you do tend to find that Director roles morph into COO or CFO. That’s because they now have bigger teams and greater complexity of leadership is required.” 

That’s when an organisation might appoint a COO, with individual Operations Directors for each division reporting to them, for example. The C-suite is not the same as the board, but it does have a similar remit to oversee the entire organisation, look forward and make those important decisions about strategy, investment and resources, rather than simply manage operations. 

President is another title that can be confusing. Malin Nilsson, Managing Director at Duff & Phelps, says: “You will often find someone with the title President or Founder when there have been two founders of the business who can’t both have the top job, or when the person who is the founder has brought in a CEO. Their role is to make sure the firm is fulfilling their strategic vision, but the day-to-day reins remain with the CEO.”

Growing role of tech

The newly invented roles that are becoming popular tend to reflect the evolution of business and, in particular, the growing role of technology. Grubb says: “A classic example is that as technology allows us to procure more services or products, it’s not through the traditional sales route and, therefore, you need someone to understand what the customer experience is.

"So that’s why you have roles like Chief Customer Engagement Officer or Chief Customer Experience Officer – it’s trying to put a focus on what’s critical to the company now, rather than what might have worked 10 to 20 years ago.”

The nature of the organisation is likely to determine which roles it will elevate to the C-suite or the executive team. A consumer goods company may opt for Chief Marketing Officer or even a Director of Branding; a firm in a heavily regulated industry would definitely need to consider putting risk or compliance in the spotlight. And technology has spawned multiple senior roles – Chief Technology Officer (CTO), Chief Knowledge Officer, Chief Information Officer (CIO) and Chief Digital Officer (CDO), to name a few.

If you’re a technology company and technology is your business driver, it makes more sense to appoint a CTO, says Clarke. If you’re a bank whose requirement is to maintain legacy systems, a CIO might be more appropriate. CDO has become popular in the past few years as the idea of digital transformation takes hold. 

What seems clear is that the roles you choose to appoint and include in your top team send out signals – both internally and externally – about where your focus lies.

Just when a growing company should expand the executive team is a moot point. “The model answer is that you should have the ideal structure from the outset,” says Nilsson, “because it sets the tone and the culture. Once you’re up and running, it’s very difficult to change people’s way of working and their reporting line.” 

However, in reality, companies have limited resources when they are smaller and people tend to wear different hats, so, inevitably, expansion of roles takes place some way down the line. 

Working together

Making it all gel is a different matter. You can have as many chiefs as you like, but if they don’t work well together and understand their own responsibilities as well as each other’s, there’s scope for it to go wrong. 

It’s like sailing, says Nilsson. “You need a skipper, who sets the course, a helmsman who’s going to keep you off the rocks and get you there, and everyone else has to know what they have to do. If you hit a stormy patch, you get through it together as a team.”

In practice, there are bound to be overlaps. “You have absolute responsibility for achieving the goals in your area,” says Grubb. “But often the complexity of business nowadays means you can’t have just one person owning it. You need a collaborative approach where you may have two or more functions working together to produce the ultimate service.” 

And finally, when you do onboard that new member of your executive team, make sure to introduce them to the Chief Induction Officer. That’s the person over there on reception, by the way.

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