Most people would agree that the buck stops with the CEO. There’s no question modern CEOs face pressure in their work; as the most senior position, they’re held accountable by a Board of Directors or an owner for delivering results. In modern organizations, however, where the pace of change is breakneck, it’s often a challenge for the CEO to stay on top of everything. This is abundantly clear as nearly 70 percent of all organizations fail to achieve their strategic results.
So why is it that CEO’s have so much difficulty executing strategy?
CEOs – Are You Performing These 6 Functions?
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There is plenty written on how to improve organizational performance through changes in culture, accountability and a host of other strategies, but at the end of the day, the common denominator is failure to execute. Something more fundamental is going on, and it’s the CEO who is in charge of putting in place systems that enable everyone in the organization to work collaboratively to achieve intended outcomes.
The purpose of this series is to identify the six key functions every CEO must employ to succeed. By highlighting these key accountabilities, we can more clearly understand how to make important changes in the organization in terms of both how work is delegated and the way results are measured.
As the senior manager in the organization, the CEO is held to account by the Board for delivering results. To do this effectively, he or she needs to know how to delegate appropriately, making sure output is delivered in a timely, efficient way. The popular myth is that the CEO should focus entirely on external stakeholders and developing relations with the Board, leaving direct reports (Vice Presidents) to manage as they see fit. In reality, success as a CEO demands having the ability to manage.
The CEO also needs to ensure there is a framework in place for appropriately delegating work down through the organization. Only then can there be absolute clarity in terms of how goals and deliverables are defined, what output is expected and what major projects need to be in place. Work needs to be delegated down the organization in a consistent way so that decisions are made in line with expectations and so that results drive strategy.
In addition to ensuring work can flow down the organization, the CEO is responsible for ensuring work can flow smoothly across the organization. Having a framework in place for accountability and authority ensures work that needs to cross departments can do so efficiently. In many cases, employees from one side of an organization have priorities that conflict with those from the other side. Ironically these groups often depend on one another and in large part, organizational success hinges on these relationships.
How well all the components of an organization function together is a consequence of ensuring the right organization design. And while there is a science in how one determines the best design, it’s up to the CEO to establish the number of layers and the alignment of functions in the organization. Principles for determining organizational design were established over fifty years ago, yet measuring complexity of work and creating the right number of layers in the organization – while a critical part of organizational design – is still not well understood.
CEOs must ensure that there is a system in place for ensuring that people are appointed to appropriate positions in the organization. First, their capability must be properly matched to the complexity of work of the position. Second, it is important to match knowledge (the body of knowledge required to get the job done) and skills (technical and social processing skills that are applied) of each employee to the requirements of the position. Finally, successful candidates must demonstrate that they fully value all aspects of the position to which they are applying, so that they will apply their full capability to the work.
In all organizations, the Support Functions are accountable for two types of work. The first is to support the CEO and the Board with information and outputs that are important for the effective operation of the organization. The second is to provide support to managers throughout the organization to help them do their work more efficiently and at a higher level of quality. A primary accountability of the CEO is to identify and ensure that there is an appropriate balance between the corporate support orientation and the orientation toward support that is given to managers. In many cases, there are competing priorities – support the CEO or support the managers. Our research shows that a majority of managers feel they are not adequately supported. This indicates that support services are skewed more towards corporate tasks. Both types of work are important, but only the CEO, from that perspective, can determine the right balance between the two and set the context and boundaries for this work with everyone in the organization.
The role of the CEO is complex simply because she/he carries the stewardship of the entire organization. As the primary link between stakeholders, others in the external environment and the organization at large, the job of the CEO is by far the most difficult. The challenge I would put to CEOs is learning how not to focus on any one of the above areas exclusively, but to focus on all six simultaneously, finding just the right balance. In many organizations, while Vice Presidents’ can do a large portion of the work, it’s still the CEO who identifies the trade-offs, makes the decisions, and in the end, shoulders the consequences.