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by Randal Godden, Chairman and CEO, at TEC South Africa
This article was first published in Real Business, a supplement
to Business Day which appears on the third Monday of every month.
While
there is no shortage of challenges facing CEOs, a number of key issues
come to the fore when we review the CEO’s role
in what has become a “get ahead and stay ahead” business
environment. Rapidly changing technologies
and markets, an increasingly sophisticated workforce and a shifting
economy all contribute to the not-so-easy task of staying on firm
ground.
For many companies, vision, mission and strategy is often relegated
to a poster-size wall adornment, hardly referred to again – if
ever. While these people may think it all a waste of time, the converse
in fact holds true. If properly developed, your vision, mission and
strategy should represent a key directional focus of the organisation
and elicit company-wide buy in. It has to give direction to the organization
and stakeholders. It needs to involve senior management and be effectively
cascaded, with all people throughout the organisation understanding
the fundamental direction of the organisation and, more particularly,
their role in helping to achieve it.
The value of a “STUMP” speech should also not be underestimated.
CEOs should avail themselves of every opportunity to communicate the
essential messages of “who we are”, “where we are
going” and “how we are going to get there”. This
way, everyone understands their part in ensuring the organisation remains
on track.
The long-term and sustainable core activity of the business is what
ultimately differentiates it from its competitors. For sustainable
competitive advantage, organisations need to focus clearly on their
core activity. Companies would do well to apply the “Hedgehog” principle,
by understanding what their absolute core competence is and, as a consequence,
ensuring everything they tackle is consistent with that unique competence.
Stakeholders represent the bulk of the CEOs focus. The particular
stakeholder relationship may vary by "category" depending
on the business, but a full range of stakeholders must be considered
and an effective strategic process developed for each. Companies often
focus on customers, but too often an inadequate amount of time is spent
on other key stakeholders, including employees and suppliers. It is
critical to explore all stakeholder relationships and determine which
are in fact the more crucial for engaging business success.
For many CEO's this activity is delegated (or abdicated). Keeping
score should however be the way in which the CEO and the organisation
measure important outcomes on a daily, weekly and monthly basis.
Often, scoring involves non-financial criteria, but can be a critical
guide to the financial numbers which follow. The latter should fundamentally
validate the information provided by KPI's.
The scorecard must be an early warning system that indicates deviations
from the standard, whether good or bad, which then require management
involvement to correct the course of action and sustain it. Understanding
what key elements should be measured, and focusing beyond just monthly
financial information, will ensure an organisation stays focused on
where it is at.
The right people with the correct fundamentals are the key to a
successful business, whether this relates to basic IQ, common sense,
a matching value system, team orientation or confidence. If you have
the right people you can move mountains; the reverse will however drive
away valuable people while entrenching mediocrity.
Having the right people in the right job should be the primary consideration.
Expertise is secondary to ensuring a fundament fit consistent with
the value system of the organisation.
Leadership behaviour in the context of company culture and values
is critical. Culture in reality boils down to a case of “monkey
see, monkey do.” Establishing the culture of the organisation
is one of the leader’s core functions as the essence of the company’s
culture is not only determined by the leaders, but also by their behaviour.
And, if everyone within the organisation conforms to the established
norms, the culture will prove consistent with the company’s values.
If one of values is distorted, the whole value system becomes questionable.
People will follow what they see, not what they are told to do.
Delegation is an art, and involves understanding the personality
style and capability of the "recipient". To ensure an
adequate process of delegation and follow up, it must be adapted to
different personality styles. For management, effective delegation
is a process that will thus require variations in technique based on
the traits of the individual concerned.
Performance management should include formal and informal processes.
A key element in this process is recognition, and not just criticism.
Performance management can be closely tied to delegation, accountability
and responsibility, and should measure these elements. It is ultimately
about managing agreed tasks and their outcomes.
It is critical that the reward system for key areas of the organisation
is consistent with its strategic direction. An organisation with long-term
customers goals, for example, would not do well with an incentive structure
that rewards sales people based only on the initial contract. Reward
systems make an impact on behavior and have to be consistent with the
strategic direction of the business overall as well as with key individual
and collective areas.
Perhaps the greatest challenge in any organisation
is cascading innovation and change while maintaining the effectiveness
and efficiency of the organisation. Task orientated managers are
likely to be overwhelmed by "busy syndrome", while strategists
who do not understand the details are usually not sufficiently adept
at recognising deviations from the plan and “course correct” early.
A broad-based, emancipated manager who recognises their strengths and
weaknesses will, through key appointments, ensure a balanced organisation.
The challenge is to understand and play in both areas with the right
people in key roles to propose and take decisive and sustained action. CEOs
have to be able to focus on short-term activities as well as strategy,
and be able to understand the juxtaposition between the two. |
