‘Secret weapon’ a competitive advantage
The world of business changes fast and companies must regularly change organizational foci and designs to adapt. The 1980s and 1990s saw a rise in operational efficiency and cost containment, giving rise to such management tools as Six Sigma, lean and strategic sourcing.
The 2002 Sarbanes-Oxley Act brought on a new era of fiduciary control. More recently, the markets and, as a result, CEOs have turned their focus to growth. But truly sustainable top- and bottom-line growth can only come through integrated, customer-centric and market-facing business strategy and execution. The integration begins with a structured, informed approach to innovation, continues with the development of value-creating offerings and, ultimately, ensures value delivery through superior commercialization skills.
One of the toughest challenges in building a sustainable growth platform is making sure all the working parts work together harmoniously and synergistically. Few organizations inherently have the incentives, processes or, most importantly, the leadership to harness the full power of internal assets and drive sustained commercial success. As result, too many great ideas fail to translate into success, succumbing to organizational inertia, functional silos or a lack of executive attention.
As a result, there has been a dramatic increase in organizations identifying the need for a single executive leader, at the right hand of the CEO, whose sole job is to drive growth and ensure integrated commercial success — a chief commercial officer (CCO). Our research shows more than 200 CCOs have been appointed worldwide since the title appeared a decade ago in the corporate community. And more than one-half of all CCOs were named in the last three years, with more than 50 of those appointments in 2008 alone. Globally, Europe has led the way, though North American corporations are quickly catching on.
Skill requirements for a CCO
As the role of the CCO centres on developing and driving an integrated commercialization vision and engine for an enterprise, it requires a unique blend of skills and perspectives that include the:
•‑business strategy and acumen of a senior-line executive with profit and loss experience
•‑technical expertise of a product development and innovation leader
•‑market understanding and insight of a top marketer
•‑customer relationship focus and deal savvy of a sales leader.
In effect, the CCO is a highly experienced executive who understands every potential lever of growth and has the integrative ability to drive the portfolio of functional capabilities to produce maximum results. As such, a CCO must be an exceptionally strong leader who is equally adept at setting corporate strategy and ensuring the implementation success of the initiatives, processes, incentives and resources required to deliver desired in-market results.
Challenges ahead
The variety of starting points from which this role has evolved, however, suggests a potential pitfall for the CCO. Different industries have different cultures: Consumer goods companies have long been marketing-driven, just as industrial companies are typically sales-oriented and technology and life sciences companies have strong product development cultures.
CCOs must negotiate the politics of these strong cultures, maintaining appropriate balance and integrating them into a smoothly functioning whole. They must wear many hats confidently, look at the commercialization process holistically, have experience with and thrive on the responsibility of a general manager role and have the capacity for long-term, strategic planning.
The best-in-breed CCOs are quickly becoming a secret weapon, creating significant competitive advantage because of their purview and control of the entire commercial process. Those we admire most are skilled at deepening their organization’s capacity to discover untapped market opportunities and ensuring a sustainable value proposition is developed for both their established brands and new products.
They know which marketing levers must be pulled and are adept at leveraging customer relationship managers to create a powerful strategic and executional alignment of sales and marketing. Finally, they are able to help craft and drive the commercial agenda not just for the next quarter or the next year, but for the next three to five years, and more.
That may sound like a tall order but the role of the CCO is clearly filling a need in a globally competitive, growth-oriented marketplace. The visibility and success of this role will only increase as its value becomes more apparent.
John Abele is the global managing partner of Heidrick & Struggles’ marketing and sales officers practice, conducting senior-level search assignments in a variety of sectors. He can be reached at [email protected] or (216) 357-2135. Jane Stevenson is a partner with Heidrick & Struggles’ marketing officers and sales officers practice, focusing on searches for CMOs, CEOs, boards of directors and their direct reports. She can be reached at [email protected] or (404) 682-7309.
