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Money is on my mind — as well as on the minds of chief product officers, who are increasingly in charge of business outcomes, and even of suggesting M&As. As for HubSpot CEO Yamini Rangan, she’s been giving some thought on how generative AI might translate into revenue. Meanwhile, Arm is following the money by listing in New York and not London. — Anna
A changing C-suite
When YouTube’s longtime CEO Susan Wojcicki stepped down in March, it was chief product officer Neal Mohan who was promoted into her former role. Was that signaling the rise of CPOs?
Maybe, because Mohan’s not the only CPO who’s stepped into the role of CEO. This is one of the findings of the 2023 CPO Insights Report, authored by Capgemini and Products That Count.
As its name suggests, Products That Count has a horse in the race: It’s a community for product managers to help accelerate their careers. As such, it has insights on how the role and importance of CPOs has been changing in recent years.
In the startup world, focusing on product isn’t exactly new. But in the corporate world, CPOs are increasingly part of the typical org chart. “The chief product officer is now an integral part of the C-suite of Fortune 1000,” Capgemini Americas portfolio lead Lisa Mitnick said.
This rise is also reflected in numbers, according to the report:
“By 2022, as we reported in our CPO study last year, approximately 15% of Fortune 1000 companies had a CPO. At that time, we predicted that the percentage of Fortune 1000 with a CPO would grow to 70% within five years. However, the data for 2023 already shows that this share has been increasing even faster than expected, with 30% of the Fortune 1000 now having a CPO.”
Battle for P&L ownership
The report’s authors aren’t altering their prediction that 70% of Fortune 1000 will have a CPO by 2027. But they are venturing another bet: that 70% of CPOs will have P&L ownership by 2028. P&L stands for profit and loss; in corporate lingo, this means a prediction that CPOs will increasingly own more business outcomes.
This change might already be happening, with the report finding that 31% of CPOs are accountable for P&L. However, it also points out that this shift in ownership “has resulted in tension in the C-suite.” That’s because “as a CPO starts to take on more responsibilities, that takes power away from others including the chief revenue officer, customer support, and potentially onboarding teams.”
CPOs can argue that they have a better understanding of what customers want. This hasn’t always been the case; just look at marketing and sales teams. But with product-led organizations, this is more and more often true, and arguably for the best.
Having a “direct line to customer insights allow[s] product teams to be proactive rather than reactive,” the report argues, noting that CPOs often make this a priority these days. For instance, Roofstock CPO Anthony Enzor-DeMeo asks PMs to participate in a certain number of customer interviews each week.
However, CPOs aren’t getting closer to just customers; they have also become closer to CEOs. “In the best companies,” the report said, “the CPO is not just a voice in the C-suite anymore, but the key partner to the CEO in ensuring the long-term viability and success of the business.”
When responsibilities include product as well as business outcomes and even driving M&As, it is no wonder that CPOs can now consider a CEO role as their logical next career step. This makes me think that YouTube’s high-profile exec shuffle may be the latest of many.
GenAI + Pricing = <3
I know I already wrote quite a bit about generative AI last week. But I also love to nerd out about pricing models, so when the two topics meet, I just can’t resist. Neither can Alex Wilhelm, it seems: When HubSpot CEO Yamini Rangan made comments on generative AI earlier this week, what caught Alex’s eye was “the company’s discussion of how it plans to monetize the new tools.”
Mince pie, not words
I am in the U.K. this week and noticed that the press is having a field day with Arm co-founder Hermann Hauser saying that “Brexit idiocy” is partly to blame for the company’s decision to choose New York over London for its public listing. If you want to hear more about Arm’s IPO, as well as OpenAI, earnings, First Republic Bank and more, listen to Equity Monday here.
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