FIRST there was the CEO, created out of age-old organisational designations like president, managing director, proprietor and so forth. It seemed to be a rather clear cut and compact definition of the job and the term caught on very quickly in corporate circles the world over. Then came the title of CFO, which gave a whole new dimension to the finance and accounts function, elevating its chiefs to a distinctly higher plane. And then there was the soft murmur of the COO, chief operating officer, which did create a bit of confusion initially since the original definition of CEO had been “the executive responsible for the company’s operations”. It ultimately served to lift higher the already exalted title of CEO - they were now visionaries, above mere operations.
Today, the managerial Csuite’s expanding day by day, with every other alphabet finding a place in between the “C” and the “O” and collectively, they’ve come to be called the CXOs. In alphabetic order, there’s the CAO, which stands for chief administrative officer in most places, but means chief actuarial officer in the insurance industry. CPOs started off as chief purchase officers, but the term is now being appropriated by HR heads, who are increasingly being called chief people officers. CFOs are still mostly chief financial officers, though in BPO outfits like Wipro Spectramind, it could also stand for chief fun officer. And at the Aditya Birla Management Corporation ( ABMC ), even the CEO title has been appropriated in part by a chief education officer, who is in charge of the 33 schools run by the group.
The Aditya Birla group already has designations like CMO - which here stands for chief manufacturing officer and not chief marketing officer - and ABMC director Santrupt Misra is currently implementing a programme to rename the HR heads of all group companies as chief people officers. “We’re doing this because a lot of people have forgotten that HR is about people,” he says, “Sometimes, when an organisation is restructuring and gets new people, such innovations are done to accommodate their aspirations for a distinctive and more contemporary role and title. This has been a North American trend and it has no downside to it.”
At Zensar Technologies, CEO Ganesh Natarajan has created six CXO titles, ranging from the conventional COO and CFO to new-found ones like chief technology officer, chief information officer, chief knowledge officer and the very latest - chief strategy officer, recruited a few months ago. The new CSO is in charge of, among other things, merger and acquisition opportunities and restructuring the company into strategic business units.
“These are aspirational titles,” says Natrajan, “Younger people can’t expect to become CEO soon, but they can aspire to become CXOs in their function. For example, when the CIO of Ciscorecently visited us, everyone in that department was hugely inspired. He’s a legendary CIO.” Rising To C-Level.
ZENSAR’S CXOs are not all equals - the COO and CFO are a rung above CTO and CIO, who in turn are above the CKO and CSO - but they’re all members of the company’s Management Council and are thus participants in every strategic decision. Dhruv Prakash, director at HR consulting firm Hewitt Associates sees this as one of the main plus points of the CXO trend. “It’s helped companies bring younger, brighter managers with skill sets in areas of emerging importance to strategic positions,” he says, “This system of designations also communicates to the organisation what is critical to the success of business strategy. An interesting example is Shoppers Stop’s CEO Nagesh calling himself chief customer care officer or something similar.”
One of the reasons for the explosion of CXOs is that corporates are constantly coining new titles to fit the needs of their business. Crisil CEO R Ravimohan currently has five CXOs, including a chief rating officer, which is a function central to the company’s business. “CXOs appeal to my structured way of thinking — it’s a neat way of doing things,” he says.
The CXO phenomenon has certainly helped deflect the attention that was previously focused on the CEO, creating a League of Extraordinary Gentlemen where there was once a Superman. But a problem with creating too many CXO designations is that expectations are raised. It’s no longer just the COO and CFO who are aiming for the top job - each and every CXO attending the strategy meeting suddenly has secret ambitions of changing his or her middle letter to an E.
Four of Crisil’s CXOs are also executive directors on the board, while its chief technology officer, a more recent post, is at the next level. And all of them are being groomed for general management responsibilities beyond their field of specialisation. Chief risk officer Roopa Kudva, for example, looks after the HR function, while chief economist Subir Gokarn looks after franchise development.
Ravimohan says all his CXOs are potential CEOs. “The CXO structure gives the board a better view of the talent available within the organisation, so they don’t have to look outside for the next CEO. We want our CXOs to have exposure beyond their own departments so that they’re accepted throughout the organisation.”
India Inc is rife with stories of individuals who are now rising from unconventional fields to emerge as potential CEOs of major companies. The CTO especially is a creature whom everyone is watching closely.
“Most companies, especially MNCs, know that remaining at the cutting edge of technology is crucial to their success,” says Saraswathi V, president of head hunting firm CEO Search Global, “Since CTOs have a major role to play in understanding technology trends and educating delivery teams within the organisation, they are being given business responsibilities and are emerging as CEO candidates.”
Could it be that we may soon have a chief people officer being promoted to head a Wipro or a chief legal officer becoming the CEO of L&T? “You need to open the bonnet and look deep inside to figure out the function that dominates the business and is most likely to produce the next CEO,” says Arjun Erry of Hunt Partners, “It’s not so obvious that an engineering company’s CEO should be an operations guy or a banking CEO should be from finance.”
Of course, there are those who are sceptical about the whole CXO trend, pointing out that inarticulate young CIOs and CTOs with scant people skills and little understanding of the market have no business sitting in at strategy meetings. A recent article in The Economist reports that in the case of 70% of European firms the heads of
the purchasing department report directly to their boards. “People who used to buy copiers and ball-point pens,” the article says caustically, “now talk strategy with directors.” The article also reports that the title of COO is on its way out, with a recent study of 300 quoted American companies showing that 20% of them had abolished the position between 1986 and 1999.
Is the COO as a species actually fated to disappear or will it just mutate into something more contemporary? The evolution of the CXO, it seems, is an ongoing process.