The common chiefs today are the CEO, COO, CFO, CIO, and financial services firms have their CRO (risk).
Recently emerging have been the CMO (marketing, manufacturing, morale, or mission - take your pick - they're all in use!), CTO (chief talent officer - see also morale officer above - it used to be called HR), CRO (research or risk officer - also known as the CTO - technology), CSO (service / service delivery or supply), and CGO (growth).
Meanwhile, the CRO (risk) is evolving into several different roles depending on the nature of the firm. There can be the Chief Reputation Officer, the Chief Sustainability Officer, Chief General Counsel, Chief Compliance Officer, and Chief Corporate Responsibility Officer; to name just a few of the current titles being used.
And every time new chief's title is proposed, it is based on the same rationale: "This strategy is so important, it must report directly to the CEO!
What is the reason for the proliferation of chief titles in organizations? We think it is because there is a system of strategies to be managed in any business.
Structure follows strategy
Dr. Chandler told us in 1962 that structure follows strategy. Unfortunately, he didn't tell us why. He just described how he saw large businesses organize themselves around strategy. Unfortunately, there was no common definition of the term strategy. There still isn't.
And worse still, strategy is thought to be one "thing", usually a way to achieve competitive advantage or create value. This is a hangover from a different kind of strategy; military strategy thinking. In the military, strategy is all about the attack.
Hard to build an organization structure around vague concepts like value or advantage.
Henri Fayol identified six on page one of the first book written on strategy, General and Industrial Management. Peter Drucker identified two more, growth and business definition, in The Practice of Management, 1954.
These 8 strategies represent the basis of the strategic plan and are the basis of all organization design.
Strategy is a System
But organization design reflects more than just a number of strategies. It also reflects the priority of strategies within any given organization.
The priorities comes from the fact that strategy is a system. Not only are 8 strategies common to all organizations, there are also 3 types of strategy that characterize the strategy system in any organization.
One of the eight strategies is the dominant and strategy and leads the other seven. We call the lead strategy the Alpha. We think it sets the dominant culture of the organization.
Influencers are the three strategies that most guide and constrain the implementation of the Alpha and the third category of strategies, the Enablers, being the remaining four strategies.
Any of the 8 strategies can be the Alpha. For banks, it is typically Financial Management. For insurers, pension funds, and all regulators, it is Risk. For many retailers, it is Marketing/Sales. For many technology companies, it is R&D/technology. The Alpha is the single-most important strategy in the system. Think of all the companies that got into trouble because the CEO's skills didn't match the skills required to manage the Alpha. Think of a banker in charge of a retailer or a marketing guru trying to run a regulator.
And the next 3 strategies, the Influencers, are the second-most important. Consider a bank with Financial Management as Alpha. Typically Risk, Technology (being primarily information systems) and Marketing will be the Influencers. Now look at the org chart for a typical bank and you will see these roles are managed usually managed by a "Chief".
So expect to see the role of chief become common for every one of the 8 strategies in any company of size.
Or, as we like to say, "Anyone who has run a business knows you have to wear 8 strategy hats."
For more on strategy as a system, see The Alpha Strategies: Understanding Strategy, Risk, and Values in Any Organization