Chief Growth Officer, Chief Innovation Officer, Chief Happiness Officer – the C-level positions are a good indication of how much the world of work is changing and which topics are becoming strategically more important for companies.
There has been a lot of movement in C-level positions in recent years, with numerous new titles being added. What can be deduced from this and to what extent is it an indicator of the changing world of work?
Martin Krill: When new job titles are created, it’s usually more than just semantics. At C-level, the job title is an expression of power, of professional recognition. When the C-level spectrum is expanded, i.e. new positions are created, this is a sign of changes in the corporate strategy. The constellation below the CEO shows which topics are currently in high demand and therefore which areas of the company will become more important in the future.
What are some exciting CxO positions that have been added in recent years?
Martin Krill: The topic of compliance, for example, with the Chief Compliance Officer. These are positions that have become more relevant in many companies. The topic of human resources is also being given a completely different emphasis. HR used to be almost neglected and was essentially limited to the HR board. Nowadays, companies have Chief Happiness Officers, which allows conclusions to be drawn about the importance of corporate culture. And a Chief Diversity Officer is also relatively new. This position did not even exist five years ago. These are all topics in which companies want to position themselves strategically. Another area that has become more important, although perhaps not quite so new, is security, which in the past was not necessarily at C-level, but under the COO. Nowadays, companies often have a Chief Information Security Officer or even a Chief Security Officer. This shows that the topic of IT security or security as a whole has taken on a completely different relevance.
The USA is a pioneer when it comes to CxO. Is it about synchronizing jobs that are becoming increasingly global?
Thomas Wetzel: I was already familiar with it even before it became established in the German economy. I have a military background and have worked a lot in an international context. There was a very clear hierarchy: the chiefs represented the highest rank. They were the ones who had the decision-making power. This has now also become important in business because the positions can no longer be demarcated as easily as they used to be. Take the Chief Growth Officer, for example. This is a broad spectrum, depending on whether it is a small medium-sized company or a DAX-listed corporation. The position is the same, but the size means that there are completely different options. However, the message conveyed by the title remains the same: I am the one who can make decisions. This has become very important in business.
What’s it like with start-ups? Sometimes you get the impression that they like to give themselves important-sounding titles. To put it bluntly, isn’t that also a bit of a show-off?
Thomas Wetzel: I do believe that they want to operate as quickly as possible with terminology that they believe is common sense in business. And of course you can critically question whether it is really necessary to use the word ‘managing director’ so excessively in a two-man company – even if it is of course factually correct under company law in the case of a GmbH.
Martin Krill: On the other hand, companies from the start-up or scale-up sector in particular try to mirror the customer side. Ultimately, this also offers the opportunity to address the right interlocutor – in other words, to communicate at eye level. This explains why you can find a Chief Sales Officer position at some start-ups, even though the entire team may only consist of three people.
On the one hand, there are increasingly differentiated titles, on the other hand there is also a tendency towards flatter hierarchies – keyword: New Work. How can this be explained? That’s actually a contradiction.
Thomas Wetzel : I’ve been involved with New Work for decades, unfortunately it’s now a buzzword because there is no precise definition. Much of what goes under the label “New Work” today already existed in the 70s, only back then it was called Lean Management. But that’s just a side note, because I see the danger of terms becoming so vague that it’s almost impossible to work with them. The real question with New Work is not whether and how hierarchies have changed. Rather, New Work means: How do managers behave in the current world of work? How do you deal with the younger generations who are now joining the company? How do you manage to be good conductors for these specialists and for other soloists who will join your orchestra in the coming years?
Thomas, you deal a lot with the topic of development. What is the best way to promote young talent? What are important skills?
Thomas Wetzel : What is becoming increasingly important is the topic of “leadership”. Graduates are excellently trained in technology. What they need to learn are social skills: how do you deal with other people? I believe that young talent can be encouraged by giving them responsibility early on. I’ve seen people in their mid-twenties who already had five or six employees and managed them really well. It was striking that they were mostly trained abroad. The courses there naturally include subjects such as psychology and philosophy, and you learn how group dynamics work.
Martin Krill: What I see in practice is that we have seen a generational shift in many companies over the last five to ten years. This means that in banks, insurance companies and more traditional companies, digitalization has created a great deal of pressure to innovate. This has led to more and more young talent moving into C-level positions. Especially in roles such as CIO, Chief Information Officer or CDO, Chief Digital Officer. Of course, these new leaders have had and continue to have a very fast learning curve, which is definitely an advantage in this rapidly changing market. At the same time, we are now also seeing in the current phase that this can also be critical because decision-maker positions are filled by people who have not yet had to manage a crisis in their professional lives. At least not one as fundamental as the one caused by COVID-19.
To what extent are positions and titles still desirable for this generation? Has the concept of a career changed? Does the young generation really tend to be purpose-driven?
Martin Krill: I think in the end it’s always a question of personality. Not everyone has the right motivation or perhaps the right skills. Others place extreme value on titles. We recently conducted a survey on the subject of the “workplace of the future”. This revealed that many candidates are increasingly interested in being able to live out their personal skills, having the freedom to shape their own lives and that this is rated as more important than having responsibility or power. Nevertheless, there are still many for whom a title is very important.
Thomas Wetzel: I share Martin’s opinion. This question of what actually constitutes a career is indeed exciting. Here’s another example from my time in the military. I was an explosives specialist and defused bombs and terrorist packages. And on missions, for example in areas with unexploded ordnance, I was – although a subordinate rank – superior to everyone else in the field. Simply because of the special training I had. Even if a high-ranking officer was present, I could always say: ‘If you ignore my recommendation, you’ll be responsible later if something happens. They always complied. But they still didn’t want to meet them a second time (laughs). To come back to Martin’s point. I too have noticed that people tend to define themselves more by content than by a specific position in the hierarchy. But it will still take a while for this to catch on everywhere.
Good keyword: What will it look like in the future when the world of work is organized in networks and a permanent job at a company is perhaps no longer standard? Won’t the importance of titles automatically decrease?
Martin Krill: Yes, but I assume that CxO titles with international acceptance will continue to exist. The tasks and responsibilities in the New Work environment will certainly change. It is not yet possible to say exactly how. However, it is very likely, and in some areas it is already becoming apparent, that working in networks will lead to a separation of areas of responsibility and more responsibility will be transferred to many decentralized teams and units.
What interests me now, Thomas. What topics are you increasingly confronted with in your training sessions?
Thomas Wetzel: One important aspect is how different generations can work together. The younger ones think about it: How do I manage to lead people who are ten years older or even in my parents’ age group? The more experienced are concerned with the question: How do I deal with the next generation, which is demonstrably better educated and technologically and scientifically at a higher level? So the key word is loss of power. This is not meant to sound cynical, but the challenge for companies is: what to do with the remaining managers? And not in the sense of getting rid of them, but taking them with them. There are many employees who have been with the company for two or three decades. Their latent willingness to change is very low. What do I do with those who are no longer opportunity thinkers, but have rather become preservationists? How do you motivate them?
A sensitive topic. What are the particular challenges facing companies undergoing change?
Martin Krill: In many companies, there is indeed a succession planning issue. And/or there are new investors who want to bring about change, particularly in the management structure. This has to do with the implementation of new roles as a result of digitalization and new business models. This can go hand in hand with new C-level positions. In other words, this may result in the replacement of one position or another.
Is it always a question of age? Or is it about a certain mindset?
Martin Krill: Whether someone is innovative, brings in new ideas and invests enough passion in their management role is not necessarily linked to age. Nor is it linked to gender. It’s more about the composition of the management team and the question: what dynamic is created? New appointments are often the result of an analysis of what additional skills are needed. And then it’s not a question of age. Then it is really a question of personality and the company situation as to what is appropriate at that moment. For example, we are currently seeing, partly due to the difficult market phase, that the CFO is taking on a whole new relevance in many companies. The topics of finance and controlling are experiencing a revaluation. We are seeing that more experienced and seasoned CFOs are in demand. Managers who have already navigated through various critical market phases. Anyone can navigate a boat in calm seas. But what if it gets stormy? In this case, age can even be an asset.
