The rise in importance of the chief commercial officer (CCO) is yet another example of how rapidly the business world changes and how companies who aim to excel must adapt to meet those changes.
The operational efficiency and cost containment of the 80s and 90s gave rise to such management tools as Six Sigma, lean, strategic sourcing, and others. 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.
Senior executives often tell us that the toughest challenge in building a sustainable growth platform lies in making sure that all the working parts in the system work together harmoniously. Few organizations have the incentives, processes, or the leadership to harness their internal assets and drive sustained commercial success and, as result, too many great ideas fail to translate into top and margin line success.
Consequently, we’ve seen 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 to ensure integrated commercial success – the chief commercial officer (CCO).
While the role of the CCO is still emerging, the trend is clear. Our research shows that more than 200 CCOs have been appointed worldwide since the title appeared a decade ago. But the rate appears to be increasing dramatically, with well over half of all CCOs being named in the last three years and over 50 of those appointments in 2008 alone. Globally, Europe has led the way, though North American corporations are quickly catching on.
CCOs can be found across a wide range of industries, with a slight majority in technology oriented organizations, where product development is a key driver and is often informed by rapidly changing industry dynamics and a high demand for robust customer relationships.
The CCO understands the workings of every potential lever of growth open to the company and knows who has the integrative ability to drive the portfolio of functional capabilities to produce maximum results.
Typical CCOs comes from marketing and/or sales management and have risen to roles that incorporate P&L ownership of a business or division. Above all, they have had significant experience interfacing with customers either in sales roles or as influential participants in the customer relationship management and/or selling process.
Business-to-business (B2B) companies are finding that a CCO who can effectively oversee the process has become an essential part of this key executive’s role.
Because of the proliferation of both online and offline sales channels and the need to manage the customer relationship at multiple touch points, sales is no longer the direct relationship game it once was; rather, sales leaders have become more analytical and consultative, focusing less on ‘selling’ and more on generating top-level value creation and ‘win-win’ deals while coordinating the customer contact portfolio.
The variety of starting points from which this role has evolved, however, suggests a potential pitfall for the new CCO. Different industries have different cultures. Once put in charge of the entire commercial spectrum, CCOs must negotiate the politics of these strong cultures, maintaining appropriate balance, and integrating them into a smoothly functioning whole.
This can be achieved by an executive who can wear many hats confidently, who looks at the commercialization process holistically, who has experience with and thrives on the responsibility of a GM role, and who has the capacity for long-term strategic planning.
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 can ensure that 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 today’s complex, globally competitive, growth-oriented marketplace. We expect that the visibility and success of this role will only increase as its value becomes more apparent worldwide.