When I reflected on my role as C.E.O. , I sometimes wondered what it was I was supposed to be doing. The C.E.O. role is usually to build a management team, typically composed of people better than we are in their areas of specialization. Through coaching and mentoring, the C.E.O. should continually pass on the best of their specialist skills, empowering team members to manage their functional departments. What then is the role of the C.E.O. once the team is assembled and enabled?
The answer is ‘context’. The role of the C.E.O. is to lead or support decision-making by providing the context. Most obviously, we should observe the strategic environment to provide a context against which we are positioning our offering, This might include understanding the long term trends in an industry, the present or future competitive or legislative environment, as well as many other factors.
However, it is incumbent upon the C.E.O. to provide the organizational context to individual departments, so they as the management team, reach decisions, that adequately consider the impacts on other departments of their actions. It is not uncommon for a department to plan to relieve a bottleneck within their processes without fully understanding the impacts it would have elsewhere within the organization. ‘Moving the bottleneck’ is one of the less enjoyable games often played in large corporations.
Perhaps most important though, and often most forgotten, is that the C.E.O. should be championing the cultural and value context of the company. Business models and even organizational structure models are relatively easy to change and emulate. Consequently, they are seldom a source of long-term competitive advantage. Companies in the same industry segment often adopt the same structure. This maybe done for either conscious reasons of emulation or because ‘that is the way things are done in our industry.’ Culture and values though, if they truly inform decision-making, are notoriously hard to reproduce.
Genuinely valuing relationships, for example, both internal (staff) and external (suppliers, customers, community) is hard to reproduce. It has to be promoted from the top and made to be a part of the language of the organization itself. For example, in my previous company decisions were always discussed with regard to what was ‘fair’ and in the medium to long term interest of our relationships, internal and external. I would never claim that we always did the ‘fair’ thing, but it was ingrained that ‘fairness’ , was an equally legitimate part of the language of decision-making to ‘profit’ or ‘revenue growth’. It was part of the context in which we made our decisions.
Culture is a key part of the context and has to be clear, legitimated and promoted from the top. It needs to be authentic and consistent to become ingrained. You cannot empower without trust, and you cannot trust without making explicit the context in which decisions should be made. If you want to scale your business, then you need to be an effective Context Executive Officer.