Too many CEOs allow themselves to get drawn in to the maze of day-to-day firefighting – we call this working in the business. On the other hand, outstanding CEOs make the time to rise above the firefighting and focus on the big picture – we call this working on the business. From personal experience and in working with others, we have found that there are six core roles that the most effective CEOs perform on a consistent basis..
And CEOs don’t have a choice when it comes to their responsibilities – they must see that all are done and done well. There is no one to pick up the slack if the CEO does not tend to them. We can help ensure that these responsibilites are effectively executed.
|Creating the Inspiration
To lead, a CEO must first define a unifying direction for the company. Choosing the right vision and expressing it with clarity is the first challenge of true leadership. A well crafted vision statement forces the CEO and management team to come to grips with a number of subtle, but very important considerations: the vision statement should identify what is unique about your company; it should guide the activities of all employees; it should inspire them to choose to work for your company and give their all; and it should be stated in such a way that you can measure progress and know when you have achieved your vision.
Charting the Course
There are fundamental rules of markets and competition, and there are inherent capabilities and limitations of any organization -- together these make some visions attainable while others are not. The CEO needs to be able to articulate a strategy for achieving that vision in light of the overall market, the company’s position, the competition, as well as other potentially significant factors, such as macro-economic conditions, politics, and regulatory constraints. At the core of your strategy should be a path that creates a position of true competitive advantage.
While the CEO must ensure that there is a logically tight strategy, it is also important to make certain that the basic precepts of strategic thought permeate the whole organization from top to bottom. Strategic thought is not just a top level concept, but it should be present at every level in the organization.
Shaping the Team
Without the team to implement them, a well developed vision and a logically sound strategy are merely concepts, and every experienced CEO understands that success depends on the strength of the team. While high performance teams begin with strong talent, they must be shaped through the creation of an environment that values the contribution of individuals, sets expectations for performance, operates based on sound decision making processes, and motivates team members to give their all for the objectives of the company.
Translating in Action
For the strategy to be effective it must guide all the decisions and actions of the company, and it is the translation of the strategy into a more detailed operating plan that ensures that result. The operating plan consists of a set of specific actions with quantifiable results, including milestones and timelines, and identifies key risks and contingency plans for the higher risk items. It is most important that the set of actions prescribed by the operating plan, when achieved, ensures the achievement of the strategy. The operating plan is also the basis for resource allocation, and as such, budgets should follow the development of the operating plan. The real value of the operating plan is to focus your team selectively on those activities which are the most valuable — and which together add up to a position of true competitive advantage for the company.
In the final analysis, it is results that count; the best vision, strategy and operating plans are useless if they are not diligently executed. Fulfilling the role of follow-through in a structured, thorough way involves five steps: setting milestones for key operating plan deliverables; measuring results against those milestones; analyzing any results that fall short of the milestones; prescribing corrective actions; and updating the operating plan. One of the key benefits of a structured and thorough follow-through approach is that it serves as an early warning system for your company which will dramatically increase the odds for effective execution.
The fundamental role of communication is to reinforce and solidify all that you have done in your first five roles as CEO. The quality with which you communicate throughout your company is a great multiplier – it will either complete the circle of your vision, strategy, team, operating plan and follow-through, enabling them to be realized as planned, or it will greatly marginalize your work on those other five roles.
Communication ensures that everyone understands the company’s direction and their role in making it a reality. Communication also serves to motivate employees, getting their buy-in and reinforcing it on a continuous basis. And as critical as all the others, communication provides the opportunity to get feedback from those closest to the realities of your company, so that adjustments can be made as needed.
Asking The Difficult Questions
Challenge yourself and see how you respond to this sample of questions relating to your responsibilities as CEO. Many with whom we have worked found that, once they understood their roles, disciplined execution was still a challenge. Having someone work with them helped ensure that they fully addressed their responsibilities.