CEOs are denigrated every day by the media, employees, shareholders and society at large as greedy, power-hungry moguls who are overpaid for usually lackluster performance. While some CEOs may fit this description, the truth is that most are doing the best they can and have insecurities like anyone else.
In fact, there are three challenges that leave CEOs feeling powerless in many organizations. These challenges can be overcome if chief executives embrace the nature of modern-day leadership and use the right processes and tools.
Lack of influence: This may be a surprise to those who aren’t familiar with the CEO role, but many chief executives feel that they have little influence on their organizations. This is especially true as the organization grows. No longer a superstar contributor in marketing, sales or whatever business function they came from, many CEOs simply do not know what to do. They cannot reconcile the fact that they have limited control over their organizations, but total responsibility for the results. Many CEOs react badly to this dichotomy and end up limiting any influence they could have.
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Some CEOs try to control everything, micromanaging and ultimately undermining their people. This focus on tactical issues comes at the expense of strategy. At the other extreme, some CEOs give up all control after communicating a grand strategy. This laissez-faire attitude keeps the CEO so removed from the day-to-day flow of the organization that he or she doesn’t see a problem developing until it is too late. Then they blame the employees for not executing to their brilliant strategy.
Lack of timely information: Many CEOs do not find out about problems in time to take action. Most of the data a CEO receives, especially in weekly, monthly, and quarterly status reports, is backwards-looking, tactical information that has little business value.
Consider this: In a standard operations meeting, typically 80 to 90 percent of the time is spent discussing the revenue forecast and how sales will achieve it. Why? Because in most companies this is the only future-oriented data the CEO receives. The other departments have presented historical information, making them less useful and relevant to the CEO’s job.
Lack of engaged employees: Many CEOs are surprised that their employees are not more engaged in their jobs. In their book, The Strategy-Focused Organization, Robert S. Kaplan and David P. Norton state “only 7 percent of employees today fully understand their company business strategies and what’s expected of them in order to help achieve company goals.”
The reason is that employees see no direct tie between the corporate goals and their day-to-day activities. So while employees may always seem busy, they may not be doing tasks that advance the company’s strategy. They make decisions and act in ways that are good for them, their boss or their department, as opposed to decisions that are good for the company as a whole.
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Be the jockey. So what can the CEO do about these challenges? The answer lies in balancing the inherent tension between having total responsibility but limited control. To be great, the modern CEO must have tremendous influence over his or organization while in some sense seeming to do very little.
This subtle but active management is similar to a jockey riding a thoroughbred racehorse. The jockey and horse must work in a consistent rhythm, but no one would say the jockey is in total control of a thoroughbred running at 40 miles per hour. The best jockeys are the ones who know how to move the horse around the track and subtly position it for victory. While they carry a whip, they will only use it as the last resort.
Own the vision. The way to guide an organization is to own the company vision and ensure that everyone understands the overall strategy of the company. Then, just as importantly, the CEO needs to tie that strategy to employee goals. This interconnectedness is critical for employees to emotionally engage. By pursuing a common mission and vision, the employees feel part of something greater than themselves.
Have a system. Goals systems are common in organizations, but many CEOs don’t know how to turn them into a management system to run their companies more effectively. Margaret Heffernan states in an article for CBSNews.com -- Why do so many companies want to fire their CEO -- that instead of trying to micromanage or oversee everything from a distance, CEOs should have “a deep internal understanding of a rich collection of smart, informed people who want to help and be helped.”
To receive the right information from their people, CEOs need to ask the right questions and have a tool for collecting the information. This system should collect data from every employee about how likely they are to achieve their quarterly goals, with weekly status updates and alerts to potential issues that the chief executive can act on before it’s too late.
With these measures in place, CEOs can overcome the three challenges and become more influential in their organizations.
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