Today, I had the privilege of participating in a Focus.com round-table with Craig Rosenburg and Carlos Hidalgo (both wickedly smart and insightful folks). The topic was Building The Ultimate Revenue Machine. It was a fun discussion, you may enjoy listening to it.
With that as a preamble, during the discussion, Craig asked what we thought of the term Chief Revenue Officer. To tell you the truth, I’d never thought about it before, I’d never really taken it terribly seriously. Apparently, it’s coming more in vogue, though I’m a little confused about why. I later “Binged” it (Mr. Ballmer, you can thank me later) , and saw some software companies, consultants, and marketing firms talking about it. While the issues they talked about and the tools could present great value, I’m confused by the need for a new C-Level Officer accountable for the Revenue Generation Process.
See, I kind of thought everyone in the organization had some level of accountability for revenue generation. Just to check, I started making the rounds of some friends. Naturally, all the VP’s of Sales that I called said they were measured on sales, orders, revenues. They felt a high level of accountability for revenue generation. I spoke to a friend who is CMO of a very large technology company. He felt he and his function had a high degree of responsibility for revenue generation. His folks were chartered with creating visibility, awareness, and demand. They wanted to attract customers to what over the best point of purchase was appropriate (field sales, inside sales, partners, eCommerce). He felt they had a strong role to play in revenue generation and held his people accountable for supporting the company’s revenue plan.
A few of my friends or VP’s of Product Marketing and Management. When I spoke to them, they became almost vehement. Each said, they were responsible not only for revenue but also for profitability. They had to develop product plans, product marketing programs, road-maps, pricing strategies, and all sorts of things to maximize share and revenue within their target markets. They were chartered to find new product and new markets that would create additional revenue streams for the company.
Believe it or not, I actually have friends who are VP’s of Manufacturing, Engineering, Customer Service, and CFO’s. Each one felt they had very clear roles in revenue generation and supporting revenue generation. I won’t take the time to tell their stories here, but they were very compelling and each felt a high degree of accountability.
So I was left wondering, where does the Chief Revenue Officer fit, what is that person’s role and accountability? What did it mean to all the other people I spoke to who felt very strongly that they had a role in Revenue Generation.
I decided to call a few friends of mine who are CEO’s. I asked their views. They each clearly stated their Boards, Shareholders, and Investors held them accountable for Revenue Generation (and each politely reminded me not to forget about Profitability). One good (CEO) friend delicately reminded me that he had just been relieved of his job by the board because he had not met the revenue expectations of the “street.” (a long story).
All of this feedback made a lot of sense to me. I had always been under the impression that most companies existed to provide products and services that created value for their customers, who in turn paid for those products and services. Generating revenue is what companies are all about. Everyone in the organization has some role in revenue generation. If they don’t perform in that role, then revenue (and profits) are impacted. Sales people don’t get orders, no revenue. Marketers don’t generate demand, no revenue, Product managers don’t bring great products to market, no revenue, manufacturing doesn’t build and ship products, no revenue, finance doesn’t bill and collect, no revenue, and on and on and on.
So if we are to have a Chief Revenue Officer–I guess that’ the person that would be at the top of all the functions that impact revenue generation. It’s beginning to sound a lot like a CEO, but why do we need another title?
Organizations are complex enough, we don’t need to confuse how they work we need to simplify. I don’t think we need to add another function, another layer of management, another level of complexity. Wouldn’t we be better served by helping each person in our organizations understand their role in revenue generation, and how they need to work with others in generation revenue?
Am I missing something?
Hi David – I always enjoy your posts and find them thought provoking. Things like this new title always make me suspicious that a consultant somewhere has a need to blog or consult but has no true value add to offer their reader/customer. The new title is an attempt to create a buzz – unfortunately, no honey!
Maybe I’m just cynical on a Monday morning. Dave
David, thanks for the comment. If people like you find the posts thought provoking then I am achieving my objective–I really appreciate the feedback.
It’s hard not to wonder about lots of this stuff you see, and not being a little cynical. While I don’t like to criticize things like this, I think it diverts the discussion from the critical issues about business performance.
Thanks for joining the discussion.
The results of your inquiry about revenue accountability are no surprise to me. However there is a difference whether people feel accountable for revenue or they have the ability to synchronize the activities of their silo with of all the other silos towards optimal revenue generation.
For example, it is therefore not the question whether the VP Sales and the VP Marketing see their role in revenue generation. It is however essential that their acts are synchronized towards generating optimal revenue for the company. Given all the studies and writing about marketing and sales misalignment, I think there is a real problem there. One should expect, that the executive to whom both VP of Sales and VP of Marketing report to (e.g. the CEO), should be able to insure this alignment.
To me the appearance of the CRO as a new executive in the corporate hierarchy is a sign that the executive to whom Sales and Marketing report to wants to fix the alignment problem in a structural way.
Is it the best way to get marketing and sales alignment? I am not sure? Is it the only way? Certainly not. One could for example pick a VP sales and a VP Marketing that get along and can assure alignment between there silos between themselves. This requires though that the superior executive has at least a broad idea what marketing and sales alignment should look like.
Christian, thanks for the comment. You are addressing a critical issue, and I couldn’t agree more about the importance of aligning sales and marketing. However, I think establishing a new “title” to help align objectives diverts the conversation from what it should be. Titles don’t fix structural, alignment problems, or mission problems. Getting people to focus on their true mission, to align their objectives, to realize they must work with each other is critical.
Dave, I think we are in violent agreement 🙂
Without a doubt!
Christian – I just wanted to say that I appreciated your observation of the “structural” issue here. Your comments made me think about it in a different way which is always a good thing. Thanks to you Dave for the forum that created the dicussion.
Thanks for the note–the primary purpose of the blog is to stimulate great thinking and discussion. In this case, as is usually the case, the quality of the discussion exceeds that of the post itself!