Form: Outline

THE VARIOUS EXECUTIVE ROLES

First. Let’s get our terminology straight so that we’re not talking apples and oranges. Executive Roles are Fungible, but in general:

– CEO: BALANCE SHEET AND MANAGEMENT TEAM

– CSO / VP SALES: SALES AND SALES AND MARKETING TEAM

– …..CMO: MARKETING (if a separate responsibility for demand generation)

– COO: P&L AND PRODUCTION TEAM (IN HOUSE OPERATIONS)

– CFO: CASH AND CREDIT, AND ACCOUNTING TEAM

The term President is a legal fiction preserved for archaic reasons. And it refers to those organizations still small enough that the various executive roles are held by an individual. For the uninitiated, in American parlance, the Legal Entity (corporation) must have a president (registered responsible person), and sometimes one or more other responsible persons (All are for tax accountability, and for legal accountability in matters of conflict). The ORGANIZATION can be run by registered agents (president), or the CEO and Management team, or by the Board, and the CEO and the Management Team. It’s a matter of scale.

Some companies are separating the balance sheet (CEO) from the sales measurement by assigning the ‘president’ role to the CSO, and some are still using the strange archaic fiction of “VP Sales” in large companies. Sometimes because the CEO retains the SALES function as his primary focus.

This is also a possible strategy if the company is small enough. A CEO should generally focus 1/3 on sales and marketing (outside), 1/3 on talent management,(inside) and 1/3 on resources and allocation of resources to strategic ends.

As a general rule, if a CEO is spending too much time outside, his sales and marketing are too weak, or he is pursuing phis own interests, not the company’s. The most productive CEO’s handle exceptions in all functions, and spend half of their time internally with staff. (Although I have been criticized for making companies too dependent upon me by doing that.) In most companies I have acquired that are unsuccessful the CEO does not spend enough time or budget in sales (‘Craftsman Effect’), or the CEO spends too much time in sales without (paying for) an adequate internal CEO (COO), (“underinvestment effect”). In both these cases I am fairly confident that the company has failed to transition from small to mid-sized, usually because not enough profit to pay for transition to the next scale, or too much extraction of profits to afford to pay for transition to the next scale; or (as I have encountered) the CEO is not able to transition to an executive role and/or is incapable of hiring talent sufficiently strong to allow him to do so. (This inability to hire good enough talent to work for you is a more common problem than we usually intuit.)

The Chief Revenue Officer (CRO) title is floating around referring to the sales function, but this is incorrect, since sales (what you book as potential revenue from the operation of the business ) and revenue (what you recognize as ‘earned’ revenue from the business plus any other activities such as investments) are two different things. In organizations where sales are immediately booked as revenue because of simple transactions where the production cycle does not have to be ‘earned’ or where the sale is not recognized until the good is delivered, this error is the understandable result of confusion. (Does it matter. Maybe not. But it can make your company look a little ‘dim’ if you have sophisticated customers, and there is a lag between sale and recognition of revenue.)