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Sunday, 18 November 2012

Title of CEO, Managing Director, Chairman? First of All You Are a Leader!

Over the past couple of weeks there has been a flurry of discussions on the UK Vistage website about the role of the Chief Executive compared to that of the Managing Director.  Where, if at all, do they differ?

So, perhaps the question to ask is, are these just titles which effectively cover  much the same functions or are they truly separate and defined roles which are, or should be, complementary.

In a simplistic fashion perhaps we can define the role of the Managing Director as having overall responsibility for the effective operation of the business, day to day, and carrying full budget responsibility.

The Chief Executive oversees the running of the business and has the primary responsibility for forward planning and strategy.  The CEO has the final responsibility for the success or otherwise of the business.

However in the end there can be only one overall leader and that should be the Chief Executive.

So let’s take a look at this role as I see it.  It all starts with the definition of the purpose of the business, what is it there to achieve and for whom?  Vistage speaker Roger Harrop considers that, in the end, the purpose of the business comes down to money; for example, to increase the value of the business and hence the asset value for the investors.

That is by no means the only definition of the purpose and it is part of the CEO’s role either to define it or to work with the top team to decide on the definition.

Next the CEO needs to work with the top team to decide on the values espoused by the business.  Please don’t include Honesty and Integrity; if these are not givens then you shouldn’t be in business.  Typical values can be a dedication to training, respect for everyone’s ideas, a no-blame culture and so on.

Critically these values mist not be just a list in the reception area; they must be constantly repeated and visibly auctioned at all times. In other words, they become the way that we do things around here.

Finally it the setting of the short and long term objectives for the business and then answering the question; if that is where we are going, what will we need to do in order to get there?  Note, this does not ask HOW do we get there?
Difficult it may be but it is not the function of the CEO to be hands in the business and that can be painful when something goes amiss.  The responsibility for putting it right should be solely in the handsof the operational management, not the leader.

Overall then the primary functions of the Chief Executive are to set the objectives, determine the strategy for achieving them and above all to determine the culture of the business and to drive it into the business.  It is perhaps the only real top down function of the CEO and it is the absolute responsibility of the leader.

This means that the leader must take time out to think; not to make decisions, not to take action, but to think about the business in a quiet environment.  Go walk on a beach with the dog a couple of times a year (without a telephone) and just think about the business.  Remember that the leader is the ONLY person in the business who consciously thinks about it
Simple, isn’t it?  Get it right and it can only lead to success.
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