Sir Alex Ferguson announced his retirement yesterday. At the same time the WSJ published a great article – When the CEO Burns Out. Reading about Sir Alex’s retirement and the WSJ article reminded me of the pressure and expectations placed on today’s leaders.
And the pressure mounts. The article noted an uncertain economy, shareholder discontent and mounting expectations to deliver results have made the lives of chief executives more stressful. Research done by Harvard medical School claims 96% of senior leaders reported feeling burned out to some degree, with one third describing their burnout to be extreme!
This is what I see.
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. No wonder most CEOs feel lonely and overwhelmed.
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!
As an example the CEO often needs to define the positioning or repositioning of the business. This is what happens next –
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 many 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.
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.
The Portfolio Partnership is currently scaling several businesses by working alongside the CEO, inside those businesses deploying our effective playbooks and performing the role of COO. This has the effect of re-energizing the CEO and putting the fun back into running a business.
This is such a huge problem, and not just at bigger companies. Ironically, many smaller firms have a CEO who acts like a COO, often failing to develop strategy because he or she is “too busy doing things”. At Successful Transition Planning Institute, we ask CEO/owners to develop plans for their business AND personal future. Part of that can mean hiring a COO to give the CEO time to focus on developing the business’ future and making sure that company culture can survive the inevitable transfer from the current owner to the new owner/management. It also allows the current owner to create plans for a new, dynamic life “after the business” – or what we call The Platinum Years(TM).
Paul. It’s tough for entrepreneurs but for scaling to occur it is essential for CEOs to assess where their skills rest and reconcile that to the objectives of the business. In my experience most CEOs have great vision but the skill of actually getting stuff done is much harder for them.
It strikes me that heads of many of the smallest companies, where CEOs might wear many hats and have their hands in many things, might be prime candidates for this kind of burn out. My question is whether some of these companies might simply be too small either to implement or to afford such a solution. Your take?
Great point. The affordability issue is absolutely right. Bringing on a full time COO is not often not practical. However we fulfill this role for the “cost of a graduate” working on the key agenda items one day per week. And also by reorganizing how the existing talent is deployed we achieve much greater alignment and momentum for the business. Scaling a private company requires constant hard work on the right stuff with the right structures at the right time. Surprisingly raising large sums of money to scale businesses often fails because of the lack of know-how. So it’s about working smarter, defining tasks better, allocating resources more efficiently. Burn out symptoms appear when bosses fail to follow these little rules. Of course no one told them what the rules were. It sounds harsh but too many small company bosses confuse activity with effectiveness.
Thanks for the response. Agree with the activity versus effectiveness observation and that many small entrepreneurs are new at this stuff and may not know about scaling even if they do know about their business. Great observations!