David Silverstein thinks there's a disturbing trend in corporate America. According to Silverstein, president and CEO of Breakthrough Management Group (BMG), a performance improvement and Six Sigma consulting firm based in Longmont, Colo., there are too many chiefs in businesses today. Instead of educating current executives, more corporations are hiring chief risk officers and chief ethics officers to fill in the gaps.
"At the same time that corporate risks are becoming more severe, corporations are hiring niche executives to take individual responsibility for issues rather than training the company to deal with these new challenges," he says. "The Sarbanes-Oxley Act is one excuse, and while it has raised the reporting standards and added pressure on CFOs, it does not explain the proliferation of these new titles."
The appearance of new chiefs to deal with business challenges is not unusual, but the current trend goes beyond historical measures, according to Silverstein. "In the 1970s and 1980s, we saw the emergence of the chief financial officer, the chief legal officer and occasionally the chief administrative officer. These made sense. Similarly, in the 1990s we saw the rise of the chief information officer and the chief technology officer; these two also made sense."
Today, the role of the chief learning officer is as important as the chief financial officer and chief information officer, according to Silverstein. "Without the chief learning officer, training and education are often relegated to a lesser status in the company when they should be pillars of stability and growth."
While CEOs should be integrally involved in education and need to understand its strategic role in the business, Silverstein says they don't need to be the functional experts to identify educational needs, develop educational programs, or deliver educational services. "Training and education are important enough that they should be core competencies for a company, but they don't necessarily need to be core competencies for the CEO," he says.
However, in the best corporations the No. 1 instructor is generally the CEO. "Take GE and the Jack Welch days," he says. "Welch provided very hands-on instruction, not just the typical CEO speech, for their leadership program. Many good companies like to describe themselves as learning organizations, yet CEOs don't take an active role in learning. They should."
So what chief roles are superfluous? The first is the chief ethics officers, says Silverstein. "Think about the message a CEO is sending to employees, customers and investors alike once he or she appoints a chief ethics officer. If ethical values are not inspired by the CEO, then how can CEOs call themselves leaders?"
Appointing a chief risk officer is another sign that there is an executive problem. "What is the goal of business other than taking invested capital and, in return for taking some risk, to produce a return? Fundamental to every business is an understanding of risk and the need to maximize the return-to-risk-ratio. Understanding risk is a core competency for every business manager; it is not a specialty, and to make it into one minimizes its importance." —G.J.