What Defines the Role of the Chief Growth Officer?
Our brand new ebook, “The Chief Growth Officer’s Handbook: Transforming Go-to-Market, Building a Growth Engine” is now available for download. Get your free copy today.
Over the past six months, we have been writing and speaking about the importance of building a Converged Growth organization as the foundation of a successful go-to-market transformation. Research has not only proven the value of this transformational shift but, also the value of being led by a Chief Growth Officer in this initiative. “53% of CEOs cite growth as a top business priority, ahead of profitability, customers and product improvements,” notes Vista Equity Partners. So, now more than ever, it makes sense to be thinking about adding a Chief Growth Officer to your e-team.
What defines the role of a Chief Growth Officer in this context?
First, the charter for the role of the Chief Growth Officer (CGO) is inextricably linked to the charter of the Converged Growth organization.
Key pillars of a Converged Growth organization include:
- Unified teams
- Alignment around the Customer Lifecycle
- Operationalized go-to-market
- Sustainable programs
- Optimizable architecture
- Delivering net lift
Second, three factors anchor the core of the CGO role:
- Central ownership of the customer relationship and of the customer journey, end-to-end
- Span of control covering BOTH pre-sales and post-sales
- Unified organizational objective around maximizing growth – both from ‘net-new’ and from ‘existing’ customers
To be clear, we understand we are still early in the deployment of Converged Growth organizational models. Few organizations have yet to make a ‘hard right’ and go all-in on this convergence. That means that for many of us, the title of Chief Growth officer may not yet exist. Even if there is a growth mandate, the types of responsibilities, purviews and charters of a CGO may not fall on just one person. In that case, think of it as “the Office of the CGO”.
That said, let’s dig deeper into some of the pivots involved in either naming a CGO or building out a distributed Office of the CGO organization:
Focusing on End-to-end Go-to-market vs. (Pre-sales) Marketing + Sales
Many corporate leaders would equate “growth” with the mandate of a Chief Marketing Officer (CMO) or Chief Revenue Officer (CRO). In fact, there are many examples of CGOs who are just re-named CMOs or CROs. This is understandable, given the legacy of organizational hierarchies that have held sway up until we started thinking with a Converged Growth mindset. However, as we zoom out and look at the end-to-end customer lifecycle, it becomes clear that what the majority of CMOs and CROs focus on is not always all encompassing of end-to-end “growth”. Too often, their focus is only on the pre-sales arc – Engage, Nurture, Convert – and driving net-new customer relationships.
An effective CGO needs to consider and strategize around the entirety of go-to-market. This includes the post-sales arc – Succeed, Develop, Grow. So, while a lot of what we traditionally file under marketing and sales would be under the remit of a CGO, a lot more can and should be if we are truly concerned about growth, go-to-market transformation and optimizing customer lifetime value (CLV).
The point of rationalization should be the customer journey – end-to-end. The customer journey should define the center of the CGO’s responsibilities, and their organization should be operationalized (and orchestrated) around this customer journey. This means that the CGO must own not only Customer Experience (CX), which often defines the post-sale experience, but a CGO must also own Demand Experience (DX)– which defines the pre-sale experience. The CGO must optimize both, end-to-end.
Given this frame, the CGO needs to be the head of – or at least heavily influence the strategy and programmatic execution of – these departmental units:
- Demand marketing
- Business/Lead/Sales development
- Sales/Account management
- Customer marketing
- Customer success/support
In practice, different companies will take a different approach to who “owns” these departments – with hybrid models predominating in the near term. Regardless, the CGO needs to have significant sway over the strategy planning and day-to-day execution inside these functional areas – all tracked against the Growth Plan.
Measuring Holistic Growth vs. “Leads + Opportunities”
We distinctly call this new role a CGO and NOT a CMO for specific reasons. Since a CGO is focused on the entirety of the go-to-market strategy – and of maximizing customer lifetime value – this role should be focused on different, outcome-oriented metrics.
A CGO’s metrics go beyond marketing campaign activities, carrying sales pipeline value and intermediary conversion rates. They must include, for example, expansion opportunities surfaced by customer success (and how to make that strategic and not tactical) and must take a more holistic view of how every facet of the customer journey can drive growth.
CGOs should, fundamentally, be focused on Growth Metrics, which are a bit different, and potentially a bit more nuanced, than traditional “marketing metrics,” “funnel metrics” or “pipeline metrics,” etc. CGOs should absolutely care about and be on top of all those metrics – but they should all be feeding a larger picture – the Growth Plan and how that maximizes both period-over-period income and overall CLV.
This also requires a new level of “telemetry” underpinning these Growth Metrics. A Converged Growth organization must be supported by systems that collaboratively contribute to an ongoing customer data value chain. This means capturing every interaction – along the multiple dimensions of channel, content, stage, and intent – and being able to pivot these interactions against key growth objectives, so that both DX and CX can be maximized.
Best in class companies see net dollar retention rates of up to 120%, meaning that for every dollar they took in from a customer last year, they expand relationships by an average of 20%. This is inclusive of churn and account shrinkage. So, it becomes clear that a more holistic, and strategic, approach with stewardship of lifetime account growth is needed.
When marketing and sales are divorced from customer success and retention/expansion efforts, it becomes difficult to do two things. One of those things is creating agreed upon, realistic growth strategies that are inclusive of new and expansion revenue goals. The other is tracking performance against these figures becomes next to impossible when teams are misaligned, and course correction usually comes too late.
(Top-down) Organizational Realignment is (Usually) Needed
Approaching organizational design with a Converged Growth mindset can be a smooth procedure – initially comprising an activity around ‘how you coordinate customer journey touchpoints to drive more growth’ – but it does take work and governance, especially in change management. Short term ‘dotted lines’ can help create roles and responsibilities aligned with the office of the CGO among existing titles and departments. Eventually, though, it is ideal to have an actual role/office that goes by the CGO name.
ANNUITAS has begun working with some clients around this organizational transformation. Below is a top-down, working concept that looks at 1.) the span of control of the Chief Growth officer, 2.) how this span of control intersects with that of Product and Communications leadership and 3.) where these intersections must be orchestrated (see ‘bold’ line items, below):
This chart highlights the reality that the CGO role is not merely about ‘rolling up’ functions under one leader; it’s also about rationalizing which departments are responsible for which elements that define or are adjacent to the customer journey. It’s a critical, top-down activity that re-thinks a company’s executive team structure.
First Steps Towards Converged Growth and the (Office of the) Chief Growth Officer
If all of this sounds very foreign to how your organization is aligned today, that’s OK. Converged Growth and the (Office of the) Chief Growth Officer are relatively new concepts, aimed at meeting the challenges and opportunities of shifting business realities, evolving customer expectations and advancing technology systems capabilities. Few companies have this totally sorted out in an optimized manner today, but ANNUITAS believes those who see the coming wave, and make the necessary changes early on, are going to ride the crest of the wave, so to speak.
Getting there may sound as easy as naming your Chief Growth Officer, but as noted above, a lot of organizational considerations must be considered first. In addition, it’s possible that to best set up your newly minted Office of the CGO for success, you might want to revisit any customer journey mapping or analysis you have, and see where growth initiatives and opportunity gaps persist, and align those with the roles and responsibilities of the CGO.
At ANNUITAS, we see this as a strategic and important endeavor. Converged Growth is critical to companies improving their return on marketing and sales investments, building sustainable go-to-market and maximizing customer lifetime value.
Research shows that companies that take on what we call a Converged Growth strategy will outperform peers by 50% in this new economic landscape. So, it makes sense to take an honest reassessment of your go-to-market organization now with a new lens and be ahead of the curve when it comes to taking on these new business realities head on.
Transforming Your Go-to-Market Organization
How can you take the next step in your transformation towards a Converged Growth B2B go-to-market organization?
Here are several, key content pieces that address different elements of growth strategy and go-to-market transformation that will help you think through your approach: