In his 2003 book, "Chief Performance Officer," author and consultant Tony Politano made a case for that very executive title in words that should have rung a bell for any grizzled capitalist: "In my twenty years of dealing with corporations, there is one unequivocal fact: increase corporate performance and you will increase stakeholder value."
In the years since, Politano has yet to come across an individual with the title of CPO (though he sees a few companies "doing" the CPO role in other ways). The fact doesn't bother him; most organizational and technology trends are identified years before they arrive. Rather, Politano says there is now a confluence of information demands that will tip organizations toward a holistic approach of performance with a titular head.
"We're at the point of seeing all sorts of new demands for metrics from various parts of the organization, which is a catalyst to step back and take a bigger look at where this fits into the lifecycle," Politano says. "People are saying, 'I know there's a system out there with the information I need, I just can't get it.' Those people who were quiet about this before are being held more accountable now, and a lot of them see their best defense is having metrics that back their decisions."
Organizing these demands in enterprise fashion simply makes sense. For example, Politano is working with a pharmaceutical company that is trying to understand how much money they are spending on drug licensing inside and outside the company. "Some of the metrics they're looking at for acquisition are similar to the metrics they should be grabbing from inside to also hold some of their business units more accountable. The only way you are going to get visibility into that is with something like a CPO program." As Politano likes to say, performance is everyone's responsibility, but there also needs to be centralized accountability for reporting back. The more metrics that come under scrutiny, the greater the need for the CPO.
We have seen other calls for C-level titles that didn't stick. But depending on the nature of the business, we have seen chief strategy officers, chief process officers and chief data officers make their mark alongside the CEO, CFO, COO and CMO. Politano offered me a 'Top Gun' metaphor that has the CSO, the long-term thinker, in the role of back-seat navigator talking over the CPO's shoulder. "The CPO is more like Tom Cruise, he has the numbers, he's making the decisions. He might not have authority to make all the decisions but he has the ear of the CEO."
Many executives out there will recall that we once expected a chief knowledge officer would assume this duty, but the CKO title fell out of favor for most companies in the late 90s and beyond. It doesn't mean companies aren't managing knowledge -- what company would say they didn't care to --but CKO sounds more like a librarian than an activist. Rising from increasing departmental and line-of-business efforts and demands, there is hope that a CPO stands the better chance of actually orchestrating performance. "There have been great strides in financial analytics, in particular divisions, in sales analytics," he says. "But I don't know any company that would tell you that those three things work together. Some are ahead of the game and most aren't."
Politano has seen division level, ad hoc CPOs made from both business and certain savvy IT types. "I worked with a controller in a division of a consumer-packaged goods division who was basically acting like the CPO for his division. All of a sudden his group became more responsible for inter-division performance metrics. He kind of grew into the position though he never called himself a CPO but that's what he's doing." It grows out of necessity, and out of actually doing the job. "It was demand versus supply creation. He created the supply and all of a sudden they realized there was a demand for this."
Tony Politano will detail his CPO thinking in an upcoming issue of BI Review, not that he expects change to come overnight. "I'm not kidding myself, there are already too many chiefs out there," he says. "But companies are seeing great metric demands they can't figure how to supply. It really takes stepping back and saying, 'how does this fit into the bigger picture and who is ultimately responsible for the bigger picture?'"
Have you come across a CPO in your company or elsewhere? Is there a legitimate need for the role? Continue by commenting on this column in our discussion zone.
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