The Three Roles of a CXOAug 19, 2021
In the world of startups the term “CXO” refers to all the people who are head of their functional area and members of the executive team, whether that’s finance, sales, marketing, HR, or any other function. My colleagues and I wrote a book on how to scale the CXO function and as I read over the nearly complete manuscript of Startup CXO for the first time I was struck by something: each CXO believes that their part of the business is the most important part. And they make a compelling set of arguments:
Chief Product Officer: If you don’t have a good product, you don’t have a business.
Chief Revenue Officer: If you don’t have revenues, you don’t have a business.
Chief Business Development Officer: If you don’t develop the ecosystem, you don’t have a business.
Chief Marketing Officer: If you don’t generate market opportunities, you don’t have a business.
Chief Customer Success Officer: If you don’t create exceptional customer experiences, you don’t have a business.
Chief People Officer: If you don’t recruit, train, and develop the right people, you don’t have a business.
Chief Finance Officer: If you don’t have the cash, you don’t have a business.
Chief Privacy Officer: If you don’t bake privacy in at the beginning, you don’t have a business.
We had a debate years ago at a Return Path Board meeting as to whether we were a sales-driven business or a product-driven business––and more importantly, whether we should be one or the other. Two of our Board members, both of whom I respect tremendously, were anchoring the different points of view, Scott Petry, on the product side, talking about how successful Apple was at getting customers to camp out overnight to be the first ones to buy the newest iThing; and Greg Sands, on the sales side, talking about how successful Oracle was at getting product into the hands of customers.
I took a devil’s advocate point of view in the conversation, true to our operating philosophy at Return Path, which was that HR/People was the most important function because we were a people-driven business.
So, who is right? Are the best companies sales-driven, product-driven, people-driven, or something else? Which of the CXO’s functions is the most important? My answer is––they all are important, just in different ways, at different times, and in different combinations. One of the critical skills of the CEO is to balance the functions out––to figure out which lever to pull at which time. But it’s also critical that the CXO be at the ready when their lever is pulled. And that gets to the important question of what the nature of a CXO role is, and why those roles can be tricky. CXOs have three principal jobs that they must keep in balance at all times, although there is a clear priority in my mind of the three jobs.
CXOs are first and foremost members of the company’s Executive Team. They must, must, must put that team first, they must make a concerted effort to understand all the different functions, and they need to cultivate their executive team relationships and put those at the top of their agenda. A CXO shouldn’t show up on the team only advocating for their own team, their own budget, their own direct reports, and their own issues. This concept is one that we have always called the First Team concept, and it’s articulated very eloquently by Patrick Lencioni in a number of his books, particularly in The Five Dysfunctions of a Team and The Advantage. CEOs must insist on the First Team behavior and mentality; otherwise, a company simply can’t function sustainably and issues will come up that either take a long time to resolve or lead to internal strife and politics. As members of the Executive Team, all CXOs are accountable to each other for the success of the business as a whole and must partner with each other to achieve that success.
Here’s an example of where the First Team made a huge impact for us at Return Path. Our most important channel partnership was, without question, Salesforce Marketing Cloud and we had spent years cultivating deep ties with the product team, various sales organizations, and the executive team. Our senior leadership (Sales, Business Development) cemented clear rules of engagement about how our sales reps were to handle deals that impacted Salesforce customers. But months into the partnership a sales rep circumvented the rules of engagement and closed a deal that negatively impacted our partner. As soon as we learned about this rogue deal we had an internal call between the CRO, the Head of US Sales, and the CBDO who, without hesitation, terminated the sales rep. You might think that they had some explaining to do with the other members of the Executive Team, but the executive team was 100% aligned. Why? Because the team had a high degree of trust and because the CRO and CBDO followed through on this clear lack of trust by the sales rep. Without a First Team approach that situation could have easily spun out of control and mired the executive team in conflict.
CXOs are also the head of their respective functional departments.
A CXO must carry the flag of their team and wave it proudly throughout the organization, especially when working with their teams. They are the functional role model, mentor, and decision-maker for the people on their functional team. To be an effective leader, they must be The Quintessential X (sales professional, engineer, marketer, etc.). While it’s easy to carry the flag for your function when things are going well, a CXO also needs to carry it when things are not going well. Our Chief Product Officer at Return Path was at the center of a storm that was holding back the entire company: we had too much technical debt and couldn’t innovate, much less keep up with current demand in our products. He never wavered, never threw anyone under the bus, but took full responsibility for the problem, and turned it around. That’s what a CXO needs to do.
Finally, CXOs are company leaders.
They are role models for company values. They should always be on alert for things that are going well or going poorly around them and look for things that need attention or recognition. Are there situations that need calming down? Guests who are sitting unattended in the office lobby? Delivery people who need a check signed and who need to be tipped? A CXO needs to step up and pitch in to help in all sorts of ways beyond their title…even putting the new bottle of water onto the water cooler. You get the idea. Company leaders have the actual and moral authority to step outside of their departments and handle things as they need to be handled, regardless of which employees are involved. A perspective of entitlement, or not doing things that are “beneath” the level of CXO will set your employee motivation and commitment, and levels of engagement, back significantly.
While most CXOs know that their role is to lead their function, that narrow view of what the job entails can end up hurting a company. A CXO has three roles—to fully engage with the executive team, to lead their function in good and bad times, and to step out of their title and be a company leader.
-Matt Blumberg, August 19, 2021