Chief Growth Officers
5 June 06
Don Laurie and
his colleagues at Harvard Business School and Oyster International have
been running a research study called “The CEO Agenda and Growth”
for over 12 years. They have found that a position that they
call the “Chief Growth Officer” can be effective when it is treated as a
line, rather than a staff, activity.
There have been
other executives with the “chief growth officer” title over the past
decade, but all of them have been created as staff jobs. Making the CGO
an operating responsibility represents one of the key differences
between these earlier definitions of a CGO and the one that Laurie and
his colleagues found to be essential in creating new growth.
In Laurie’s
formulation, effective CGOs have significant long-term revenue and
profit responsibility. The objective of the CGO, and his team, is to
create substantial new platform businesses that their companies can
grow. When this is successful, as it was at UPS, the leader of the new
growth platform can become the leader of the corporation.
Mike Eskew of UPS
From CGO to CEO
I had a chance
to talk with Don when he discussed his findings during our recent ICE
Summit. I asked him to describe the “do’s and don’ts” for creating an
effective CGO position. He had the following observations:
The Do’s:
-
Select a
credible, accountable executive.
This is a
seasoned senior manager with extensive line experience. Most effective
CGOs have been with the organization for many years. At Medtronic, for
example, the company’s Vice Chairman, physician Glen Nelson, became its
CGO. When he did so, he created a new line organization focused on
creating new growth platforms for Medtronic. This structure helped spur
the company’s impressive growth in the 1990s.
-
Ensure that
the CEO has direct hands-on involvement.
The CEO is part
of the framing and the reframing of the issues surrounding the growth
platform. She or he is part of the team, and they learn as they go.
-
Attract a
curious, diverse, and constructively dis-satisfied team…
… and really
believe that the team is greater than the idea. Don’s research
indicates that a company’s successful growth platform may be quite
different from the initial idea. The team evolves the idea based on
what it learns about customers, opportunities, and capabilities.
The Don’ts
-
Don’t select
an “up-and-coming” manager because your business managers don’t want
to give up a business leader.
The risks of
“young Turks” are two-fold. On the one hand, you may find yourself with
a headstrong manager who can spend millions without delivering results.
Or, conversely, there are those who will rigidly meet a designated plan
without taking advantage of new opportunities as they develop.
-
Don’t leave
the team after you appoint a CGO.
The CEO needs to
be involved as much in growing new businesses as operating the old
ones. Your company’s investment committee will look to the CEO as the
ultimate owner of the new growth platform, so he or she must have a
strong understanding of both direction and details.
-
Don’t wait
for a big idea.
The new growth
platform will be most successful if a company bets on the team rather
than the idea. Most big-company CEOs don’t have a lot of experience in
assessing an idea – they are much more experienced in assessing people
and organizations. In all the successful cases studied by Laurie, ideas
came to senior management attention in an underdeveloped form.
More
Information:
1.
Here’s the original
Fast Company job description
for a “Chief Growth Officer.”
2.
The article on Chief Growth Officers from David Meer of Marakon
Associates is
here.
3.
“Creating
New Growth Platforms,” by Don Laurie, Yves Doz, and Claude Sheer,
was published in Harvard Business Review in May, 2006.
4.
Last week’s update on New Growth Platforms is
here.
5.
Glen Nelson’s bio is
here
