Your C-Suite Is Way Too Crowded

This investor and three-time tech CEO says the modern alphabet soup of C-level titles threatens to slow down innovation.

C-level fever has been spreading rapidly through the corporate world for years. Large corporations had added more and more executives with ‘chief’ in their job titles.

This trend has been building for years, with large corporations adding lots of new executives with “chief” in their titles. But as a late-stage technology investor, mostly in companies outside Silicon Valley, I’m noticing more and more of this title inflation at smaller businesses and startups, too. Since these tend to be companies without large, far-flung organizations, they usually don’t need a lot of chiefs, but they’re just following trends–trying to keep pace with larger competitors in attracting top-shelf leaders.

All this silly corporate name creating–no matter where it happens–is counterproductive to good management. Relentlessly expanding the C-suite can hurt a company’s culture, and, worse still, expanding the C-suite can sometimes be counterproductive to good slow-down growth. Here’s why, and what to do about it.

The New Corporate Alphabet Soup

Just about every company of some size needs a chief executive officer (CEO) to lead the company; a chief financial officer (CFO) to run the numbers; and, depending on the scale of the operation, perhaps a chief operating officer (COO) to keep the trains running on time. This allows the CEO to focus on bigger-picture issues and strategy. But in my investment work lately, I’ve been running into a slew of other C-level titles: chief revenue officer (CRO), chief customer officer (CCO), and chief product officer (CPO), to name a few.

Many larger companies, particularly in technology and finance, have chief information officers (CIOs) and chief technology officers (CTOs). These executives run complex corporate data centers and other major systems. There are also brand-savvy chief marketing officers (CMOs); message-centric chief communications officers (CCOs); environmentally savvy chief sustainability officers (CSOs); chief listening officers (CLOs) and even chief information-security officers (CISOs–maybe the most unwieldy acronym), who are charged with fending off cyberattacks.

This alphabet soup is partly the result of changes in business and technology. Before the internet and the debut of computer malware, companies obviously didn’t need a top officer responsible for cybersecurity–and maybe not even a CTO. Now, those critical functions need to be handled at a high level by somebody, and many companies do it by assigning them to a dedicated, C-level executive.

But much of this C-level fever seems less purposeful. Some companies like to craft new positions with fancy titles just in order to appear like they’re paying attention to a particular business function. Others use C-level titles to combat the shortage of high-level talent in sought-after fields. CEOs and recruiters figure that if they give someone a “Chief Something” title, instead of a more-traditional VP or SVP role, an on-the-fence job candidate might be more likely to sign on the dotted line.

If Everyone’s a Chief, No One Is

There are definite downsides to making everyone in your organization a chief. First, it can easily slow down decision making. Give someone a grandiose title, and you increase the risk that a needlessly large department or sub-organization will bloom underneath them to justify their high title. Bureaucracy sets in. Ever-more-numerous factions and constituencies all need to weigh in on key issues. I’ve seen CMOs, for example, decide they need to be involved in various sales initiatives because they carried a weightier title than their peer running sales day-to-day. Lacking expertise but flexing their titles, these chiefs can derail otherwise smooth-running processes.

Naming too many C-level executives can also muddy a company’s focus. According to this write-up on online-education site, for example, the role of a corporate “chief listening officer” is “monitoring both external and internal communications about organizations,” including social-media channels. The role’s “primary focus is on gathering information from customers and employees in order to develop ways for an organization to enhance their relationships with both.”

Hang on. Shouldn’t marketing, sales, and HR departments already be doing this? Whether it’s a new cloud-based sales software or the week’s latest Twitter chatter, sales and marketing teams always need to adapt, learning new skills and habits in the process. But in most cases you hardly need a C-level leader to make that happen–you just need capable teams.

Finally, C-level fever can make corporate cultures sick, too. If CEOs hand out “chief” titles like candy in response to every new business trend, how will that make everybody else feel? Whenever I’ve done this myself as a CEO, hoping to cement a great performer in their role, it’s just led to more people coming to me with their hands out, looking for their own shiny titles. Plus, the trickle-down effect can make an otherwise logical org chart look more like a bank’s, where everyone’s a vice president and titles mean little.

I’ve always reminded people across all levels in my companies that “everyone sells.” If you’re on the phones as a customer-support representative, for example, and you find a customer clearly needs training to use your product, see it as a chance to sell them some training. But when there’s a chief revenue officer overseeing a team whose sole function is selling products to new customers, what does that mean for that customer-support rep? Are they not part of the revenue cycle because they’re servicing existing customers? In cases like these, a C-level title can send the wrong message in a way that hurts the bottom line.

I’m not saying that org charts and job titles should never change. Far from it. But my general advice is to tread carefully if you’re considering creating a new C-level title in your company. Doing so might give you a whopper of an organizational headache–one that will take more than a couple of aspirin to cure.