The Smith Report - Operational Playbooks

Redefining the Role of the CEO

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Redefining the Role of the CEO

This is what I see.

Almost every article I’ve read during this recession demonstrates how hard CEOs and their management teams are working. But is value being created? Over the last 10 years the consistent number of US business owners that crystalize $10m or more from selling their business is around 6000. The total number of US businesses runs around 27.3m of which 600,000 employ 20 people or more. Talk to most CEOs and you will hear evidence of stuff not happening. Promises get broken. Employees can’t get through their agenda items. Early warning signs of projects struggling are not flagged. e.g. Product launches are either not happening or are failing badly. CEOs complain they don’t have time to follow through with the details. They just expect instructions to be executed by using initiative! The vast majority of web sites are a digital version of feature and benefit datasheets. Even when video is deployed there is no consistency of style or voice.

 Why is it Happening?

 Expectations are too high on the CEO. You’re expecting Bill Belichick and Tom Brady in the same body. You’re expecting the editor to be the writer. Two roles are being combined into one.  So the strategist is also left to drive the operational agendas. The CEO is being left not just to educate his leaders on the strategy and the key policies but also on the best operational agenda to execute successfully. It’s not going to happen. The number of people that can do that is tiny, but there are some special people that can do it, but that doesn’t make it right!

Look at these 2 big problems sitting on the CEO’s desk to see what I mean:

Problem #1: Define the positioning/repositioning of the business

The CEO gets the team together collectively and also on a one to one basis. She explains the story and overall policy objectives for each department. She will stress the key issues for the CMO, CFO, HR, CTO, CIO, Manufacturing Director etc. However  department heads need more help than you think to translate that overall message to nitty gritty detail. Alignment of all this activity back to the overall positioning doesn’t happen by chance. Apple isn’t the biggest R&D spender in the world, it’s just the most effective because it marries the R&D objectives to the corporate objectives like a glove over a hand. Tim Cook was Apple’s COO before being appointed CEO. So in private companies where is the COO role? It’s the missing piece. Alignment doesn’t happen by chance, it needs to be designed into the system driven by the COO role. Driven by the Quarterback on the field.

Problem #2: Ensure our messaging is consistent across all Marketing content and reconciles to our Sales Strategy.

Sounds simple enough. It’s not happening most of the time. The marketing director might translate successfully the company’s messaging into blog posts, videos, thought leadership pieces but then the Sales Director makes up his own rules because he knows how to sell! Sales scripts are unrecognizable compared to the home page of the web site. Instead of the sales process being anchored to the core story of the company and how it improves the customer’s performance, it’s anchored around the features of stuff you sell. The missing link appears again. The CEO is not hearing this misalignment. Leakage occurs and before you know it you have an underperforming product and yet the marketing story is good and the sales team is talented. Someone needs to care about alignment.

More missing links I’m seeing:
  • KPIs measured by finance, sales and marketing are not reconciled thus robbing the leadership team of essential insights
  • Customer Support observations are not fed back into Product Development thinking
  • Lead Generation activity is not connected to the TYPE of sales leads the sales team needs.
  • Production shipping targets are not connected to POs being received thus missing an opportunity to connect sales and production emotionally.
  • Internal training is not formalized with curriculums, not delivered daily/weekly, not connected with real skills gaps thus reducing your competitiveness
  • Marketing never train sales teams on their markets
  • Most projects that require interdepartmental effort die on the vine through lack of ownership.

So missing links expand, opportunities are missed and potential is unfulfilled. And of course the COO role has never existed so no one misses it. (Please note the exact role of the COO will vary depending on the industry, the experience of the CEO and the experience of the team.)

There is bad news and good news here. To embrace the role of COO requires a CEO with the humility, honesty and self-awareness that few possess. The good news is that the best COOs have no egos and understand how difficult it is for the boss to redefine his job.

 

 

 

 

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About the Author

Ian founded The Portfolio Partnership (TPP) in 2010. TPP is an operational consultancy focused on scaling private businesses safely. He believes his resume of building 4 previous businesses from publishing, investment banking to software in Europe and the States gives him a unique set of skills and a sense of humor. He remains a competitive masters track & field athlete and in 2012 was ranked #2 indoors in the world for his age at 400m.

Discussion

  1. Paul Cronin  December 20, 2012

    really solid advice Ian. I call this the “someone has to boil the water” syndrome in the restaurant industry. The chef has great recipes, and a can run a great kitchen, but can’t also run the front of the house. The owner of the restaurant is great marketer/manager, but not necessarily a great chef. One is the CEO, the other the COO. By the way, the chef can also be the owner, but needs a COO for everything else. Boiling the water may be boring (so is running QuickBooks), but it has to get done by “someone”.

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  2. Ian Smith  December 20, 2012

    Thanks Paul. Tell every private company owner you meet about the missing link! It’s the secret sauce to successful scaling. Not sales training, not social media advice, not adword optimisation. It’s all about the right QB, the right COO to convert the leadership message of a CEO into an aligned set of actions.

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