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Who Should the Chief Performance Officer (CPO) Report To?

Bob Paladino April 7th, 2009

I am frequently asked, “Where should the CPO be positioned in the organization? Does it vary by commercial, nonprofit, or government agencies?”

The ideal positioning would be to report to the CEO or CEO equivalent in noncommercial enterprises. However, rarely if ever does the CPO start out at the top.

Here are a few examples. At Geneva-based global biopharmaceutical company Serono (recipient of the globally coveted Balanced Scorecard Hall of Fame award), the CPO reports directly to the CEO, allowing for maximum visibility and access to decision-making. At the Royal Canadian Mounted Police (RCMP), a governmental organization and also a Balanced Scorecard Hall of Fame winner, the CPO reports to the Commissioner, the highest officer in the organization. These are ideal scenarios.

Clearly, not all organizations can have the CPO report to the CEO. For instance, several successful organizations have the CPO reporting to an executive who is a direct report of the CEO — in other words, level 2 in the organization. In one unusual case, the CPO resided in the IT department. However, the executive team later came to recognize the value of the CPO’s role and now this CPO reports directly to the CEO and collaborates with the entire executive team. Stay tuned for more on this topic. ###

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2 Comments to “Who Should the Chief Performance Officer (CPO) Report To?”

Liz Cantor Says:

April 8th, 2009 at 8:13 am

You didn’t mention the CFO. Couldn’t a strong argument be made for the CPO to report directly to the CFO? Doesn’t the CPO in most organizations today reside in the finance organization?
Bob Paladino Says:

April 8th, 2009 at 1:26 pm

Liz,
You raise a valid and interesting question. I will answer “in some cases, yes the CPO reports to the CFO” and offer you some supporting information from two studies.

While the CPO for Crown Castle International in the office of the CEO we were invited to participate in a 20 company study with Drs. Kaplan & Norton on the role of the CPO (in this study we used the normative acronymn OSM for Office of Strategy Management).

This study arrived at the same findings as the 40 company research for my CPM book “Five Key Principles of CPM”; there are two “primary” reporting relationships:

1.) CPO reports to the CEO, or
2.) CPO reports to a CEO direct report, BUT with there are two common variations here so let’s call them 2A) CPO reporting to the COO and 2B) CPO reporting to the CFO.

So you are spot on!
Thanks for the inquiry. Bob P