“What’s next?” is the burning question that seasoned Product leaders find themselves asking. While Chief Product Officer may be the pinnacle of many product leaders’ careers, some are aiming for – and landing – the CEO role.
In a recent study, we found that Product leaders are rising to the top post faster than we’ve ever seen. To explore what is behind this trend, Egon Zehnder teamed up with Peak Product to conduct a survey of 173 CPOs to get their take on the role and its career progression opportunities. Interviewees were mostly based in the United States (62%) and Europe (27%), but other regions are also represented in smaller share.
What intrigued us the most about the study was that more than eight in 10 CPOs intend to become CEO (83%), highlighting how the role has grown in significance over the years.
In this article, we explore the key highlights from our study and what they mean for Product leaders like yourself, who may envision a future in the CEO seat. The full study, titled “From CPO to CEO,” can be downloaded on Peak Product’s website.
Career Opportunities Are on the Rise
The future looks bright for CPOs, who maintain an optimistic outlook on their careers. For most respondents (78%), opportunities have grown over the last five years. When it comes to stepping into the CEO role, the forecast for assuming the top post is between five to 15 years for 58% of respondents. However, a significant caveat exists – almost half of them (48%) are convinced that they would need to leave their current companies within the next five years to better position themselves for a CEO role.
This prompts the question: How to retain top talent? The primary retention factor for CPOs in our survey is not necessarily an immediate promotion to the CEO position. In fact, 64% prioritize the financial success of their companies, even more than their own financial rewards (49%). Only 39% are actively seeking opportunities to move up, while just 8% are considering lateral moves at this point. CPOs are a group led by their desire to innovate, create high-impact results, and connect with their customers. Retaining this talent requires the ability to connect to their curiosity along with increasing the breadth of executive purview. Providing CPOs the ability to grow and have greater cross-functional exposure provides them with the experience to be a successor and satisfy their desire to continuously have high-impact results.
Chief Product Officers: Emerging Influencers
Our study unveiled an interesting trend: CPOs are becoming influential figures within their organizations. This stems from two primary factors. The first is that a significant majority of CPOs (66%) report directly to the CEO; the same share of respondents view the CTO as their most important peer (66%). This positioning gives them influence that extends to other departments as well, with 92% of CPOs holding considerable sway over Engineering, 59% over Marketing, and 52% over Sales. Secondly, the organizations surveyed demonstrated a high level of digitalization, with 51% being fully digital, 31% partially digital, and only 2% not digital. This environment provides CPOs with a unique opportunity to flourish in their roles and exert influence across the entire organization.
Key Competencies and Areas for Development
Another interesting finding relates to Product leaders’ skills. The majority of them credit their success to their strong customer-centric approach (80%), growth mindset (77%), and data-driven decision-making (66%). These competencies not only ensure success in their current roles but also serve as valuable traits for their journey toward becoming CEOs.
However, on a scale from 1 to 5, with 5 being very well positioned, CPOs rated themselves lower in terms of board management experience. Specifically, 71% of them expressed a need for professional development support in this area. Additionally, it is not surprising to note that financial literacy is often lacking among CPOs. An important aspect that holds some Product leaders back from reaching the CEO role is their depth of expertise in profit and loss (P&L) management and accounting. The ability to effectively partner with the CFO becomes a key consideration for their journey to the top.
Product leaders possess key qualities that make them excellent candidates for CEO roles – we see this especially in the tech sector (but are starting to see this in other industries, as well). Product leaders excel at exceptional prioritization, asking and prioritizing critical questions that drive strategy and company evolution. Skillful collaboration defines their leadership style, enabling them to work skillfully across the organization. Their ability to delve deep into customer needs and market data to inform decisions is critical. Above all, the future orientation CPOs demonstrate enables them to navigate changing landscapes and lead successful product developments, as well as empower others to innovate effectively. These qualities position these executives as strong contenders for the CEO chair.
At the same time, the majority of Product leaders would benefit from deepening their exposure to the financial side of the business (inherently the product function can be much more top-line than bottom-line oriented). Additionally, CPOs don’t always have exposure to the board, so proactively finding opportunities to either present to the board or develop a close advisory relationship with a more tech or product-oriented board member is extremely helpful. Recognizing this gap is crucial, as transitioning from a CPO to a CEO requires financial leadership skills and the ability to navigate board and external interfaces effectively.
Ultimately, the journey from CPO to CEO is a transformative process that involves learning through experience. While some aspects can be developed over time, potential also plays a vital role in identifying individuals who have the capability to thrive in the top leadership role. As the CPO role continues to evolve, it is essential to focus on both the current competencies of these leaders and their potential for future growth.