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The Role of Today's Chief Executive
From a book by Peter Wildblood
Today's chief executive of any medium to large size, private or public,
organisation, is in an increasingly difficult position. It is doubtful
whether many of them are able to do more than "cope" in the short to
The problem stems from two key issues facing
today's CEOs; the essential isolation of their position, and the
exponential increase in the extent and pace of change with which they
have to cope. Together, these two factors take their toll on even the
worthiest and most experienced of chief executives.
CEOs today are often lonely, distanced both from
the organisation's "owners" and his or her key management support. What
is more, they are rarely close enough to the general customer base from
whom the livelihood of the organisation ultimately depends.
Managers are paid on "performance" and chief
executives in particular are rewarded extremely well, based on their
performance agreements. Boards of directors expect, quite rightly, that
their chosen chief executive will perform. Indeed the costs to them as
individuals if they do not, can be quite horrendous.
Governments too, are setting performance criteria
for their senior staff. Though they are often loose and ill defined,
the trend is welcome.
In these circumstances it is a rare CEO who
"confesses" to his or her board of directors that there is any
uncertainty about a particular course of action. Similarly a chief
executive who talks with senior management without a clear view of what
is required runs the risk of being perceived as "ill informed" or
It takes rare courage to open oneself
to the vulnerability of genuine uncertainty. This is particularly so
when one is faced with a significant growth in the complexity of
operating a business, based on the exponential rate and growth of
change faced in today's international climate.
National and international markets, economic and political conditions,
currency fluctuations, local community standards, environmental
conditions, internal dynamics, intellectual, social and ethical
considerations, are all subject to either subtle yet significant
movement in some circumstances and violent and sudden "sea changes" in
The only genuine constant in today's organisational environment is change itself.
So, organisations, small and large, work related or social and
community in nature, all need to adapt to external change. After all
bridges and tall buildings are built to stand the stresses of changing
external weather and environmental conditions. Why not organisations.
From time to time, organisations need to be able to
make significant changes of direction as a result of internal
imperatives. In other circumstances change is driven externally. When
internal and external forces act at the same time, as is most often the
case, the level of complexity increases markedly.
Coping with the complexity of guiding an
organisation in reaction to change is an immensely difficult
undertaking for a CEO. It is hard enough to see the need with requisite
accuracy and to set an appropriate course. It is difficult for many to
do so without losing an essential flexibility also required. It is also
difficult to sell the need and the course to be taken without resorting
to a "big stick" approach. For the vast majority it is well nigh
impossible to do so in an effective and lasting way so that the people
responsible for bringing about the change can understand it and carry
The need, therefore, is to provide an environment
in an organisation in which change can and does occur "as a way of
organisational life". Indeed the premise here is that, until the
environment inside an organisation is conducive to change, no decision
about change, will be truly effective or lasting.
Certainly change must be forced in circumstances where there is some form of immediate response required.
A receiver appointed to an organisation under threat of bankruptcy,
must make fairly hard-nosed decisions involving considerable change to
the organisation. If these decisions satisfactorily maintain the
organisation in existence, the changes made will have formed the basis
of further change.
A business owner facing a revenue shortfall,
cashflow problems, or a changing or declining market, should take
similar hard-nosed decisions.
The problem is that CEOs are chosen for their
position because they have succeeded in a previous position, either in
that organisation or in another considered relevant.
The criteria for the appointment are almost always
based on the material needs of the role. They ignore, or minimise, the
importance people play in achieving objectives: bottom line results,
cashflow, return on investment, inventory control, marketing, sales,
product development and investment ratios. All these are essential
elements of effective management. None of them can be achieved without
the people within the organisation.
As a rule, organisations reward performance and
promote people with "technical" skills, rather than for their skills in
harnessing the positive energies of the people with whom they work.
Both are equally important.
As the business world emerges into the 21st
Century, businesses of all sizes are undergoing a radical
re-examination. The value of the "front line" is receiving more and
more emphasis. Middle management ranks are diminishing in number, if
not disappearing entirely as organisations become flatter. "Quality" is
the sina qua non of personal and organisational success - the basis of
customer satisfaction and of competitive advantage.
People with vision and the capacity to draw
colleagues to them in a unified, commonly agreed direction are more
sought after than the more technical people of the twentieth century.
At no time has it been more important
for people leading organisations to look to the twin skills essential
to personal success: the technical skills of their own position, and
the relationship skills necessary to harness the creative energies of
Our obsession with the
more readily quantifiable, our penchant for dealing with people as
objects (human resources), the growing complexity of our environment on
this planet and the rate of change particularly in the speed with which
we process "information", are responsible for the position in which
most CEOs find themselves.
It is rare indeed that a chief executive is able to
perform with real distinction meeting the needs of his or her employees
while keeping investors and directors comfortable with the performance
of the organisation. It's almost as if it were "Mission Impossible".