You are the CEO. You’re expected to be visionary, think big, give direction, engage, focus, follow up, inspire, and give your people responsibility and freedom. Then before long, you’re told, “You give too much freedom. Try to control people and performance more, but don’t over command.” Or maybe even, “You are too ambitious. We don’t have a budget for that. Set more realistic goals, but still high enough to stretch people. Be a role model!”
Receiving all these contradictory messages and recommendations throughout your career as a CEO is liable to make your head spin.
The CEO perspective
Having closely observed the daily work, thinking and decision making of CEOs and business founders for more than ten years, I believe that we must stop the illusion that one person – the CEO – can cope alone. It’s too much to expect them to deal with all these contradictory situation-based needs, while at the same time trying to fit the “golden leadership” model.
The CEOs’ and business founders’ perspective is usually something more like this: “Who asked me how I feel in this role?”, “What are my need to help me thrive in this enterprise?”, “How long can I be squeezed from the top and the bottom?”, “I don’t sleep well. I feel pressured to deliver unrealistic results fast, and most importantly, I am afraid to disappoint people.”
There is a vicious cycle that I have been observing for years. Every time the board hires a new CEO, he or she often brings in some kind of change management program like Lean, Agile or digital transformation, hoping to shift the paradigm of the system and the results it brings. But how much can one person do? A big force applied to a small surface often breaks it. A bad system will always destroy even the most talented.
The burden of the CEO crown
We see CEOs or business founders as God-like figures who have been given a crown by the board. On one hand, maybe this is right, since these
people have taken on the responsibilities that others don’t dare to
think about. But this crown comes with a heavy burden.
Most business founders who are CEOs can’t just leave their job when they
are drained of energy. Often founders lose faith in themself as their
company grows, leading them to hire a professional board of directors
to provide advice. But still, it is they that must take the responsibility when the bank shows concern about the company’s
performance based on poor decisions.
On the other hand, CEOs and business founders are human beings just like
the rest of us; they need to be connected, grounded, accepted, and
meaningful. CEOs are torn between contradictory demands. They may
want to isolate themselves and at the same time be available for all.
Or they make seek to have full control of the business as a whole and
at the same time trust the system and the employees to foresee the
risks and make wise decisions.
Eliminating the one-man show
I used to constantly ask myself what kind of system the board members and C-level executives can co-create to eliminate this one man-show. Is it even possible? If yes, in what context and how?
The answer is a principled-based solution that transforms traditional management rituals into holistic management rituals, and in doing so, enables the board and C-level executives to move from ‘one man in a crown’ to a ‘whole system’ approach.
There are several prerequisites for this solution:
The path to holistic management
In traditional management a new CEO steps in and the board provides the strategic direction, but usually with limited resources. The CEO does their best to translate the strategy into the organizational context and cascade it across functions through different goals and targets.
To accelerate the execution, consultants are often hired. Although they do the job they were hired to do right, the job they were given was wrong for the organization. A year or two goes by, the results haven’t changed. The board is disappointed, fires the CEO and hires a new one. This is where the vicious cycle begins. When business performance fails, the board blames the CEO for their inability to deliver, but success or failure cannot be the responsibility of just one man.
While it is much easier to control a company that is divided into functional areas, it’s like trying to fix a car without knowing what any of the parts do, or how they work together to make the vehicle run. It takes courage and consistency to understand how a company behaves beyond its functions, with its customers, suppliers, and how it creates value as inter-dependent parts.
Rituals for success
There are six business rituals that the board and C-level executives must change to break the vicious cycle and stop relying on one man.
The board decides the strategic directions of the company by sitting in the office, relying on reports, and inside-out thinking.
Strategic planning happens without an understanding of the customer perspective, pushing the CEO to do the wrong thing right.
Many strategic objective are issued for the CEO to execute, with few resources.
Strategy is cascaded through targets and measures into functions, ignoring the inter-dependencies.
Many change initiatives start with no responsible teams assigned to them; no time blocked in teams’ calendars to execute them and consequently little is achieved.
Results are the same as those delivered before, no change in paradigm is achieved.
The board and C-level spend 20 days per year (5 days every quarter) studying the enterprise end-to-end with its customers, suppliers, and people, outside the office.
Strategic plan is created from the customer value perspective and based on the company operating as an end-to-end system. The CEO is asked to execute the right thing.
One key strategic focus selected that has the biggest impact on the whole enterprise.
Daily end-to-end business discipline created with customers, functions, and suppliers.
Core strategic initiatives starts with clear human and monetary resources. As well as 3-4 hours available time in the teams’ calendars to execute it to the last detail.
Paradigm change happens after 4 quarters. Better results achieved through focus and discipline.
Bold leadership, big rewards
For the vicious cycle to be broken, it is the founder that must take the lead. Left to the board, the CEO will continue to receive one way instruction and mixed messaging that perpetuate those traditional and failing management systems. As the founder of the enterprise, you must be bold. You’ve put everything into your enterprise why not take that next step?
Creating a new holistic business excellence model will not only ensure that your highly expensive board of directors deepen their understanding of the enterprise as an end-to-end system, it will also increase the value of the company itself. As the founder, you have the right to expect your enterprise to deliver value and reward after you are gone, and managing the system holistically, rather than relying on the CEO, will achieve this.