There are only 4 types of roles in a company

In the last post, I described the 4 roles that were most common in the paths to becoming CEO of a S&P 500 company, namely marketing and sales, operations, engineering, and finance. I promised to dig into these roles and how they correspond to the 4 primary objectives of a business.[1]

It turns out, there’s surprising regularity in the types of roles across businesses meeting different needs. You may not guess it looking at either job boards or college majors. In many ways, businesses are like airplanes; they vary in details but need the same basic parts to fly. So what are these parts?

Foresight_AirplaneLabeled
Original image used under a Creative Commons Attribution-ShareAlike license.

Marketing represents the cockpit and controls of the business, discovering customers, understanding their needs, specifying solutions, and orienting the plane accordingly. Sales is included here as well, as a form of marketing that happens in person.[2] The C-level executive in this area is often the Chief Marketing and Sales Officer.

Technology and Operations are each one of the engines of the business, respectively developing solutions and producing and delivering solutions. Technology (or engineering) includes things like product design and development and operations includes supply chain, manufacturing process, and service operations.

Resources is the fuel tank, ensuring the necessary resources to get the plane off the ground. The most important of these resources without which nothing else is possible is a predictable stream of capital, i.e. a finance function. The second most important is people, i.e. an HR or Talent function. Other examples include IT or information systems and real estate or facilities. Legal expertise is a relatively small but essential resource as well.[3]

“A business that cannot attract the people and capital it needs will not last long.” – Peter Drucker

So the fact that these roles appeared most often in CEO paths was not an accident. The deeper reason was that they are the primary objectives of a business and presumably what is rewarded with promotions in a company.

As another check on this observation, you can look at the financial statements of companies. The primary line items in income statements for companies are typically “cost of goods sold,” “selling expenses,” “research and development expenses,” and “general and administrative expenses” which map respectively to operations, marketing and sales, technology, and resources.

What are your observations? Is this roughly the structure you see in most businesses? Fire away in the comments.

[1] It’s helpful to think of example businesses to apply this to, particularly outside finance, professional services, and public interest. As mentioned in an earlier post, businesses in each of those sectors often have a more indirect or abstract need that they fill and the application of this framework can get more nuanced.

[2] Be warned that the words marketing and sales are often used in many different ways. For many, they conjure up ad copy or graphic design and schmoozing meetings and aggressive sales pitches. I’m using them in the sense of Peter Drucker, Roger Martin, and the Pragmatic Marketing Framework. Each of them puts the activities you may see happening into the larger context in which they belong.

[3] You may be thinking about where strategy, analysis, etc. fit in. These are simply part of leading and managing in any of the 4 objectives. At the largest companies, a dedicated team may be set up to take on these tasks, and is considered part of overhead or G&A as explained above. The broader trend seems to be for shrinking layers and overhead. GE recently did this and CEO Jeff Immelt had this to say: “Removing layers is one way to reduce costs and increase our speed, focus and agility.” The tech startup world seems to have outright disdain for MBAs or management consultants who pitch their primary value proposition to the company as strategy.

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3 comments

  1. Praveen Ghanta

    The question I face in my little startup is – how do you effectively make the transition from hacker+hustler to Marketing+Technology+Operations+Resources? Particularly when you’re growing organically, there’s a temptation to neglect ops in particular, as it doesn’t clearly add to either product or sales. It just sort of festers as a growing issue until you can’t ignore it anymore.

    If you have any insights into how firms manage the transition, I’d be interested to hear about it.

    As an aside, reading your posts – it’s not always clear who the audience is? While they are generally career-oriented, some seem more pointed and some are quite high level. I’m not sure the same audience will be interested in both. I guess you’ll see what sticks and run with that?

    • Vivek

      Praveen,
      Good point about navigating the transition. I think the relative importance of each function varies a bunch by industry. If you have a big interface with the offline world, eg actually manufacturing a product or dealing with fulfillment, you can’t postpone dealing with operations for example. My sense is that most handle it the way you described. Focus on the most important parts of the business until you absolutely have to deal with it. That seems consistent with the first rule of startups: focus is king.

      On audience, it’s the type of folks I’ve been helping one-on-one offline and would love to help on a larger scale. A generic description of who I’ve helped offline might be: US young professional that’s 1 – 7 years out of a good college, wants to do good / have impact and do well / be successful, and is trying to strategically navigate an overwhelming set of choices, often because his college major was not connected to a profession.

      On mix of topics, I’m hoping some of the high-level pieces in the mix help with the reflection and exploration that happens in making this decision as a complement to the crisp, actionable pieces.

  2. Pingback: The 2 defining choices for your professional future | Vivek Mohta

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