Title Creep: the Chief Revenue Officer
The storied C Suite is getting a little more crowded, as CEOs, CFOs, CMOs, and CTOs make room for CROs, or chief revenue officers. Such executives typically are marketing officers on steroids--overseeing functions like sales, new product development, and pricing. The job title, coined circa 1999, can be found at a number of hot companies, including Facebook, MySpace, Jobster, and Spot Runner. What's behind the trend? Some theories:
1. It's a function of the self-esteem (or lack thereof) of marketing folks, says James Ward, a marketing professor at Arizona State University. Marketers often feel they lose key boardroom battles to those wily finance types who are adept at marshaling numbers to support their agenda. By adding the word revenue to their titles, marketers are hoping to appear economically butch.
2. With sales channels fragmenting because of the Internet, companies are not only looking to increase sales; they're also examining what kinds of customers are worth going after in the first place. That's what motivated Chip Conley of Joie de Vivre Hospitality, a San Francisco hotel group, to hire his first CRO, in 2007. His company can always discount its way to greater revenue through deals on websites such as Expedia and Travelocity. The CRO's job is to decide when it's a good idea to forsake margins and go for volume and when it's not. "Those decisions need to be made not just for the company as a whole but also for each of our 40 individual properties," Conley says.
3. Not since the dot-com bubble have so many companies struggled to explain how they make money. A company with an ambiguous revenue model might hire a CRO so, as Ward says, it can signal to the outside world, "Revenue--we've got someone taking care of that!" James Smith, the CRO of the Huffington Post, a political opinion site co-founded by Arianna Huffington, thinks the title is his CEO's and board's "way of saying that, with every business development deal that I do, I should always be thinking about how that's going to bring money into the company."