Mark Stelzner recently posted some interesting statistics on the plummeting average tenure of C-suite executives:
These stats got me thinking more about how organizations today are rethinking their organizational strategy in a challenging economy where talent management is ever-critical to the business, and non-core functions are becoming increasingly subjected to lower-cost outsourcing solutions. So why are C-suite tenures all getting shorter?
Marketing: is far too tactical in many organizations, and often a scapegoat for poor sales performance. Marketing managers are focused far too much on administrative tasks, such as distributing press releases, managing mailing lists etc. Refreshing the CMO every couple of years can add some gloss to the lipstick on that pig.
HR: like marketing, HR is often far too bogged down in administrivia such as benefits admin, compensation management and compliance. High attrition, low worker morale and a general lack of strategic involvement in the core business drives many CEOs to revolve the CHRO door every three years.
IT: until recently was a shining star in the company, but the prevalence of lower cost third-party services is rapidly transforming the role of the CIO from technology evangelist to cost-containment expert. Inability to keep costs down and failure to meet punishing deadlines is seeing the CIO's tenure shrinking close to the four-year level.
CFO: Y2K, the dot-com bust a vicious 9/11 fueled recession, and now a credit crunch and a further economic squeeze has made the life of the CFO about as easy as being Elliot Spitzer's publicist. Like their CEO bosses, the CFO is taking the fall every 5 years for poor financial performance.
In short, the support functions for a business are becoming increasingly less ingrained with core business strategy and revenue-generating activity. Effective business line managers are constantly becoming smart people managers; retaining and nurturing their talent which adds dollar-value to the enterprise is now a core managerial skill. They are also honing their ability to manage their P&Ls to further their careers and use front-office applications effectively to help drive their business forward. In addition, effective sales managers increasingly encourage smart, targeted marketing activities to generate new business opportunities; they know what their clients want and how to reach them.
As today's enteprises become more global, they increasingly need to structure their core business units to push their products and services into new markets quicker than ever, with their cost of sales at a minumum. Developing talent, marketing to new customers and managing the finances are more important than ever to the global enterprise as they learn to become more nimble and competitive in this business climate. However, these real value-add activities are less frequently taking place in siloed HR, marketing and finance departments - they are becoming pervasive across business functions that are core to developing and running the business. Is this what is really driving BPO and ITO - the desire to drive out high-cost services that have lost much of their value to the enterprise? And are the traditional business support functions losing their relevance?
All-in-all, the business support functions need to be more closely aligned to the core business lines to add greater value to the business. So by shedding the routine low-value work, CEOs can focus their C-suite executives on driving better people-management, better marketing, better financial planning across their product and service lines globally and set performance metrics that hold them directly accountable to aligning their craft with corporate performance. And yes, tenures may still reduce even faster in the short-term, as support functions become more accountable for adding value to the business, but how else can you change executive behaviour?
.....how relevant are you?