IT companies go startups way, appoint chief growth officers

IT companies are emulating startups and web commerce firms to create a relatively new C-suite executive category – chief growth officer (CGO) – to boost growth visibility in a tough global macroeconomy where clients are becoming increasingly cagey on spending money on projects that don’t yield immediate returns.

Top tier companies including HCLTech, Tech Mahindra, LTIMindtree and Wipro have appointed such officers recently. Mid tier and smaller companies like Persistent Systems, Xoriant, Innover among others have also made such an addition recently.

The “fancy” designation entails a role that is a mix of sales, marketing and operations. With growth sustainability being a key parameter of the CEOs office, CGOs directly report to CEOs of their companies.

When Wipro appointed Stephanie Trautman as its chief growth officer in 2021, the company in a mail to employees said that the “chief growth officer is a new function that will enable the company to achieve its accelerated growth ambitions.”

Nachiket Deshpande, COO, LTIMindtree, told ET recently, “Across industry, we are increasingly seeing that successful transformation opportunities require collaboration with ecosystem players on multiple capabilities. Mandate for chief growth officer is to bring these multiple capabilities together along with the partnership ecosystem. Cloud and AI are only enhancing this need and hence, this role has become pivotal for success going forward.”

The channels that drive growth have expanded beyond traditional in-house sales and marketing and healthy collaboration with ecosystem partners such as hyperscalers, product and software vendors, new-age startups as well as private equity and advisory firms is very important, said Ramkumar Ramamoorthy, partner at Catalincs, a growth advisory firm, said.

“Earlier this year, LinkedIn announced the ‘Chief Growth Officer’ role as the number one fastest-growing job in the US. In recent years, the role of CGO in the C-suite has gained prominence as it synergises different functions within a company such as sales, marketing, products and solutions, and works closely with strategy, corporate development and finance to identify newer business opportunities and shape them into long-term growth strategy,” he added.

Anshuman Das, co-founder and CEO, Careernet and Longhouse Consulting, said that chief growth officers used to be widely prevalent in digital commerce startups. “Their role is fixed because their target is fixed like number of app downloads or number of users to be acquired. Of late, the role has come to IT industry. Here, the role is slightly vague, but overall related to revenue growth through offerings, partnerships and getting foothold in new regions, etc.”

Munira Loliwala, AVP, strategy and growth, TeamLease, said, “With growth being over 50% of the KRA (key result areas) for most CEOs, these CGOs directly report to CEO office. Factors like tech sector headwinds, increased competition, market complexity and also to ensure leadership lead sustainable business, are making these roles highly attractive. Companies are looking to make investment in such talent to break stereotypes of the traditional structural hierarchy of leaders and create an unbiased, transparent and direct approach model in parallel to the existing system.”

But why now, is a question everyone is asking. “Companies in the IT services industry are once again at the top end of an ‘s’ curve. If they do not jump this curve and get on to the next one, they will not be able to meaningfully participate in opportunities thrown up by newer digital technologies such as AI, 5G, IoT and Quantum Computing,” said Ramamoorthy.

As such, to grow, companies need to ‘shape’ these newer opportunities rather than merely ‘participate’ in them through Request for Proposals (RFPs). These newer opportunities, coupled with rapidly-changing market dynamics and deal characteristics, have made this integrating role very critical to drive long-term, profitable growth, he explained.

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