Strategy

Too Many Chiefs?

A chief growth officer can serve as a focal point for enhancing revenues, but promoting continuous innovation at a company is one of the toughest t...
Ben McLannahanDecember 10, 2004

Under pressure to deliver organic growth, a number of U.S. companies — Heinz, Interpublic, and Honeywell among them — have recently appointed chief growth officers, executives whose main purpose is to find value-enhancing revenue opportunities. Will this new, vaunted post be the growth elixir that companies are looking for?

Unlikely, if that’s all the companies do to jump-start growth, says Mike Baxter, a partner at the London office of Marakon Associates, a management consultancy. The reason: the growth that these companies are after requires the entire company to change its behavior, capabilities, and culture. A CGO can “serve as a focal point for efforts to increase revenues and be an important symbol of commitment,” but “if everyone isn’t focused on growth — from the CEO down — it isn’t likely to happen.”

Despite caveats like these, Baxter says more boardrooms may have a seat set aside for CGOs, given the current challenge of revenue growth in sluggish markets.

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In a global survey of 175 companies released in September by Hill & Knowlton, a communications consultancy, executives cited “promoting continuous innovation” to deliver growth as the most difficult thing for their company to get right. “Structurally, many companies are just not set up to [deliver it],” notes Andrew Laurence, Hill & Knowlton’s chairman for EMEA.

But whether the CGO is the answer remains to be seen. Colgate-Palmolive, the $10 billion (€7.8 billion) manufacturer of personal-care products based in New York, quietly scrapped its CGO post in July this year, four years after creating it.

One firm convinced that the role has legs is Interpublic, a $6 billion New York-based advertising firm, which appointed its first ever CGO in October last year, following a big executive shake-up. Kevin Allen, a former account manager and business development director, now reports directly to the CEO, using his small staff of three to “urge the company forward — energizing, cajoling, and evangelizing.” As Allen sees it, his role is primarily that of “linkman” — sustained revenue growth needs “joined-up thinking,” he says, “removing organizational barriers” between advertising, marketing, finance and HR.

In August Interpublic posted its first positive quarterly organic growth figures since 2001. “I’m loath to say it’s down to me, but I’m certainly having an impact,” he says.