The Hindu Business Line : The CEO’s role

If you’re a CEO or a business owner, you’ve got your job cutout for you! You’re a holding a very special position. Why? Because the lives and fortunes of many, many people, families and organisations (employees, associates, vendors, lendors, borrowers, customers, investors…) depend on you, your health, your decisions, your procrastination and your eccentricities. Needless to say, power and authority is concentrated in you. As the cliché goes, p ower corrupts and absolute power corrupts absolutely. So it is a necessary and a healthy practice to stop for a moment and reflect on the CEO’s role.

Humility to start with

A large dose of humility is a good starting point! You are simply not the fountain of all knowledge; and you certainly don’t hold a monopoly on the truth! You are as human and, therefore, fallible as the rest of us! If it were not for the wonderful people around you: Parents, family, secretary, well-wishers, teachers, colleagues, friends, acquaintances and employees, you wouldn’t be where you are today! Of course there’s no gainsaying your own hard work, discipline and competence that’s got you to the top of the totem pole.

Command and control

As CEO you are accountable for organisational results. Sales and market share, quality and customer service, profit and profitability, cash and cash flow: All measurable business parameters are signposts pointing to your own performance. Yours is a world of hard data: CGRs, YTDs, EBITA, YOY growth, ratios…Its indeed a complex dashboard that you have to read, interpret, analyse, decide on and act upon. You are like a pilot constantly acting in concert with the data on his head-up display. Organisational command and control mechanisms are like the fly-by-wire system by which the pilot flies his magnificent machine!

Set the direction

Before you even take off, you’ve got to set the direction and chart the course. What is the company going to look like five years from now? Is the structure of the business aligned with the emerging realities in the market place? Are the internal systems designed to serve the customers?

Are shifts in customer needs and priorities being anticipated? Does the organisation have its ear to the ground vis-À-vis the external and internal environment? Is the company listening to itself like submariners who switch off engines and listen intently to the creaks and groans of metal under pressure?

The CEO reward-punishment system is intertwined with the stock market. Stock prices and market cap are supposed to reflect the CEO’s performance. It is therefore only natural that the CEO is totally focused on the short term; he’s driven to achieve quarterly results and is always looking for anything that sends the company’s stock price soaring. Unfortunately, this often leads to myopia and causes many CEO’s to miss larger, longer-term organizational imperatives.

Important initiatives

Leadership development, policy interventions, organisation redesign, revamping IT architecture and lengthening the R&D pipeline are all focal points arising out of the vision and strategy that the CEO must create collaboratively with his entire team.

These are important initiatives that imbue the organisation with survivability and create the capabilities to deliver quarterly and annual results in a sustainable manner. A myopic fixation on quarterly results alone will induce the organization to mimic autoimmune diseases that cause the human body to eat itself.

Build capabilities

A large part of the CEO’s role is to build capabilities in the organisation. He’ll have to traverse the length, breadth and depth of the organisation to assess the gap between the capabilities that exist currently and the capabilities that need to exist to achieve the vision and strategy.

This needs continuous attention to people development through training, feedback, responsibility allocation and job rotation. The CEO will need to take a thoughtful and analytical approach that combines information management with a high sensitivity to people. He has to mould and shape the organisation like a potter at his wheel.

Three-part role

Overall, I’d say that the CEO has a three-part role. Part One is an external interface role in which he is engaged in communicating with the external environment to understand its dynamics; he can then use this understanding to make the organisation future proof.

Part Two is the operations role in which he monitors the organisation’s concurrent performance and applies correctives in real-time.

Part Three is the capability building role in which he sets about making decisions and initiating action to secure the organization for the long term; this involves continuous dialogue with people and processes to bring them into alignment with the emerging configuration of the external environment. In terms of a time allocation template, Part One should account for 35 per cent of the CEO’s time; Parts Two and Three should receive 30 per cent and 35 per cent respectively of his time.

Shifting focus

Though the three-part role seems disparate, they are woven together with leadership, which all said and done, means creating an environment in which people can grow and deliver exceptional results.

To come back to the beginning, the CEO can only do that if he shifts his focus from his own power and privilege to the needs and aspirations of the team and the organisation, both of which have been entrusted into his stewardship. He’ll do well to hark back to Krishna’s declaration in the Gita, “powrusham nrishu: I am the competence in man”. That is the ultimate insurance against an overbearing ego!

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