You’re confused, but you oblige — after all, that was a request from the boss. However, on the 39th floor, he calls you and tells you he now needs you to take the elevator to the lobby. Not only does he not let you finish the task he gave you previously, but now wants you moving in a completely different direction, by using various means.
Do you want to be that kind of boss?
The CEO’s Job
This example might seem like it’s coming out of left field. However, less extreme instances of this type of boss behavior happen on a daily basis in many organizations. It is the consequence of a lack of departmental direction, and ultimately, of a CEO failing to set the context for their company.
Even when the organization focuses on one goal (for example growth), there are various ways of accomplishing it. Additionally, different departments in the company might go about achieving that goal in a variety of ways. And not only that, but sometimes the immediate goals of two different departments could compete with each other.
These inner workings of a company are what can create confusion and lack of direction. However, it’s the CEO’s job to prevent that from happening if they want to be effective.
Leading by Setting Context
If we take a look at an organization as a whole, we’ll see that each employee’s focus is much narrower than that of the CEO. Each of CEO’s subordinates has filters that are in place from the perspective of the duties of their role. Every single one of them was hired because of their skills and expertise in their specialty. The CFO is excellent at finance, the COO can manage the operational side of the business, and so one. Each one truly and rightly believes what they do is critical for the organization’s success.
They tend to be focused on the inward working of the company. Certainly, the view is from from the perspective of what needs to be accomplished, but still they are focused on the internal aspects of getting their job done. However, that doesn’t hold true for the CEO. In the words of Peter Drucker, “The CEO is the link between the Inside that is ‘the organization,’ and the Outside of society, economy, technology, markets, and customers. Inside there are only costs. Results are only on the outside.” In this context, a CEO must know how to balance and integrate both the outside and the inside of a company’s experience.
The CEO is the only one that can decide whether a financial procedure has to take a back seat to operational expediency. When what’s best for finance is not necessarily best for operations. What is ebst for sales might not be best for production. It is the CEO, and the CEO only who can decide what is best for the organization as a whole. If the CEO does not make these choices, the impact on employees feels to them like a whip-saw effect of changing priorities. What is important to their boss isn’t important to people that they rely on for support.
How does a CEO accomplish that? That is where context comes in. The CEO sees opportunities that others can’t see, with their functional focus. By being in touch with the inner workings of the company, but also understanding and experiencing the outside, a CEO can ensure proper and accountable management of their company.
Since the CEO is the only person with the capability to lead the organization by setting the context, it’s imperative for them to be aware of this requirement, and create the time to do this work. If the CEO does not do this work, no-one will do this work because no-one else has the overall- organizational perspective. If the work is left undone, it falls to subordinate positions to try to negotiate a resolution to difference s of opinion on priorities. This will result in trade-offs that may not be in the best interests of the organization. By being accountable for the organization overall, a CEO can ensure that subordinates make the right decisions about what’s best for the organization.
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