Top heavy: Have retail c-suites become too bloated?

In January, Gap added a brand-new exec role to its leadership team.

Eric Chan, formerly chief financial officer at the basketball team LA Clippers, took up the job of chief business and strategy officer at the retailer, a newly created role in which he is expected to oversee corporate strategy and – as the company’s chief executive Richard Dickson put it – help pave “the way for brand reinvigoration and cultural relevance”. 

Thankfully for him, Chan won’t be alone in delivering on Dickson’s bold ambitions for the $15bn fashion brand.

His appointment takes Gap’s executive team to no less than 11 – a number of seats squeezed around the top table that would surely have been unfathomable to Don and Doris Fisher when they first founded the family-run retail business back in 1969, with a single store selling jeans and records.

But, believe it or not, Gap is far from alone in trying to fit 10+ executives around a boardroom table in retail. M&S matches Gap with 10 on its leadership team.

Tesco, the UK’s biggest retailer, now has 12 on its executive committee, including four with CEO in their job title. And Asos beats even that, with a dizzying 13 on its management committee.

Rarely does a week go by without reports of yet another addition to a retailer c-suite either.

In January, Asda appointed its first digital officer, Matalan added two new exec positions – chief supply chain operations officer and chief retail officer – in June 2023, and John Lewis and Waitrose named their first group CEO shortly before.

So, what’s behind this increasingly bloated c-suite? Does it benefit retailers or slow them down? And, as large organisations in other sectors begin to rethink their own sprawling leadership teams amid a tough economic climate, might retail follow suit?

The genesis of the c-suite

Believe it or not, the idea of a c-suite is a pretty new one. The concept only really began to emerge as part of the business hierarchy after World War II, when a raft of business founders took companies public to secure funds.

This fuelled a new level of growth that left business models far more complex, with different business divisions and product lines. Against this backdrop, overburdened founders appointed chief executives to help them oversee and coordinate operations.

As this complexity increased – and various regulations began to emerge around finance, worker safety and consumer rights in the 1960s and 70s – CEOs increasingly shared the workload with chief operating officers (COOs) and chief financial officers (CFOs).

The dot.com bubble in the 1990s added chief information officers (CIOs) to the group, followed by chief marketing officers (CMOs) a few years later.

However, the shift from this handful of execs at the helm to c-suites with double-digit memberships is a much later phenomenon.

Twenty years ago, the idea of a chief sustainability officer (CSO) was unfathomable at most retailers, for example, with corporate social responsibility confined to a poky corner office at HQs.

Fast-forward to 2021 and the number of UK companies with a CSO had reached 37%.

This newly expansive c-suite reflects the fact that business is a whole lot more complex in 2024, says Julian Ritter, partner at growth consultancy Stryber.

“Retailers operate in very different environments today than they did 10 or 20 years ago,” he says.

“New questions arise from the emergence of new technologies and new business models, and this broader set of challenges requires a broader set of skill sets and bandwidth at the board level.”

Omnichannel business models split between both digital and bricks-and-mortar operations are a major part of that added complexity.

The need for an experienced pair of hands to steer its digital transformation is what led Asda to tempt over Matt Kelleher from rival Morrisons in January as the supermarket’s first chief digital officer.

Meanwhile, Carly Natalizia has been tasked with “defining the global strategy for the digital ecosystem” at sportswear specialist Gymshark after being named its first chief digital officer in March. 

“Digital transformation has revolutionised how businesses operate, demanding executives with specialised knowledge in technology and its applications,” says Dirk Buyens, professor of HR management at Vlerick Business School.

The steep growth in M&A activity in the last year too – with the number of retail deals at a five-year high as of March 2023, according to law firm RPC’s retail group – has also fuelled increasingly bloated c-suites, Buyens adds.

He says this is because “when companies merge, there’s a need to integrate the diverse expertise from both entities, leading to the inclusion of more executives”.

Then there are the rising customer expectations that retailers take issues such as sustainability and DEI seriously, with dedicated execs to oversee progress.

Fresh skills 

The reasons behind a bigger c-suite might be easy to pin down, but does that necessarily make it a move in the right direction in retail?

Yes, believes Ritter. A bigger c-suite “provides a broader array of perspectives, enriching decision-making processes by incorporating diverse viewpoints,” he says.

He says it also provides more manpower at a time when retailers are focused on both building out new revenue streams, such as retail media or digital products, and looking after their core business. 

“Building new revenue streams requires a high amount of board-level attention and dedication,” he adds. “Jeff Bezos, for example, has dedicated a significant amount of his time – and [that of the] Amazon board – to thinking about new business models to drive Amazon forward.

“This cannot be done exclusively by those tasked with managing and growing the core businesses, and it is too important a task to be delegated down the chain of command.

“New roles at the board level for missions such as revenue diversification are key for the long-term success of businesses, across all sectors.”

New additions to the c-suite can also help bring in much-needed skills.

“We’re seeing a lot of new chief customer officers and chief growth officers focused on the digital customer experience delivering personalisation,” says Donna Sharp, managing director at management consultancy MediaLink.

“They have a tendency to bring more technology and UX experience into businesses, which hasn’t inherently existed in the c-suite before.”

In addition, distributing leadership responsibilities over a bigger group of execs has helped ease the burden on individuals at a time when the level of burnout in the boardroom is at an all-time high.

According to a small survey by talent development company LHH in February, 36% of c-suite executives in the UK are considering a change of roles within the next year due to the stress of onboarding disruptive technologies, economic instability and challenges around the environment and sustainability.

“Distributing responsibilities across more individuals can alleviate the burden on any single executive and foster greater collaboration within the team,” believes Buyens.

This is why many retailers opt to split responsibility for sustainability across two executive roles, a CSO overseeing environmental impact and a chief diversity officer focused on DEI.

Too many cooks?

It isn’t all upsides, though. There is definitely potential for slower decision-making when there are more voices and more perspectives at the top of an organisation, Buyens accepts.

“This can lead to inefficiencies, especially in fast-paced industries [like retail] where agility is crucial,” he says.

Larger executive teams can even lead to internal conflict as senior leaders collide on what should be the priority for the business or who should wield the greatest influence.

That can be a particular problem in retail where organisational adaptability is crucial. “Sometimes having too large of a c-suite team can reduce a business’ ability to adapt and change course,” says Buyens.

“There’s also the risk of disproportionate pay allocation, with a significant portion of employee compensation channelled to a handful of top executives, potentially leading to discontent among lower-level employees.”

Finding the sweet spot when it comes to the size of a c-suite in retail is a balancing act, in other words.

“While it can bring benefits such as a wider range of expertise and perspectives, it also carries potential drawbacks such as increased complexity and slower decision-making,” says Buyens.

“Ultimately, the appropriateness of an expanded c-suite depends on the specific needs and circumstances of each organisation.

“It’s crucial to strike a balance between having sufficient leadership representation to address the challenges of the modern business landscape while ensuring that the executive team remains agile, efficient and aligned with the organisation’s strategic objectives.”

Weighing up these pros and cons has led organisations in other sectors to significantly scale back executive teams in recent years.

In September, banking firm Goldman Sachs shrunk its executive committee to eight, with a strategic reshuffle of senior roles across the business.

In March, pharmaceutical giant Bayer eliminated nearly half of its executive positions, from 14 down to eight.

And in February, the chief executive of Swedish bank Handelsbanken hit headlines when he opted to scrap all c-suite titles other than his own.

The decisions all appear to have been made as a way to create leaner, more efficient business models against the backdrop of economic volatility. So might retail follow suit?

Lean and mean

Retailers are certainly looking to streamline executive committees where they can, says Sharp.

“As a c-suite gets bigger, there is the risk that roles increasingly overlap and efficiency declines,” she says.

“At MediaLink, we have worked with a lot of organisations on this issue – it requires optimising processes and ensuring there is complete clarity on roles and responsibilities and, while collaboration is required to bring in new skills, that can’t be at the sacrifice of speed to market. You have to have clarity to drive speed.

“Over time, the goal is that ‘new’ skills become embedded across more leaders and again we can return to tighter groups of leaders to move with speed,” she adds.

“This is what we saw with the rise of chief digital officers, which have often been replaced with the expectation that ‘everyone is digital’.”

It’s less about numbers and more about impact, says Dahlia Stroud, senior capability consultant at business consultancy Bridgethorne.

“It doesn’t really matter whether there are four, six or even eight roles at the top,” she says.

“It’s more that the dynamic between leaders [with an] executive team that is diverse in thinking encourages constructive debate and challenges conventional practices.

“Those at the top of an organisation set the culture, and at the heart of success lies that synergy. Shared values are imperative and ensure clear and consistent messaging is received throughout the entire organisation.

“This also fosters strong employee engagement and cohesive action towards strategic goals.”

Size isn’t what matters, in other words. It’s what you do with it that counts.