It isn’t even funny how many different ways a collection of companies interpret the role of the CEO. There are certain expectations from the chief but all in all, there are two kinds of CEOs – the exclusive and the inclusive.One leads by creating an enabling environment and working with everyone to aggressively move forward while the other just sits at the top and waits for everyone else to follow. Either way you look at it, the CEO is unarguably, the most powerful spot in the company’s hierarchy.
It is just as important for both employees and CXOs to be aware of and realize what the CEO has to give back to the organization, apart from spearheading the company and being a key decision maker. The one indication whether a CEO is successful is not can be assessed by observing the people who work with the chief. Massive confusion, more often than not, begins at the top. A confused CEO will sprout confused minions. A smart CEO will inspire growth just the same. But what does the organizational hierarchy think a CEO is? Which category do most people think their boss fits into? Setting Strategic Direction through Business Knowledge Hussein Akbar disagrees with the notion that the CEO should be a ‘do-all’. “I believe that each person (in a team) should be an expert at his task / job function. If he is not then he should be trained to be or replaced / relegated to a different task. In simpler words: pull your own weight,” he says. “An organization can function in any manner that one wishes, however for it to function efficiently it is essential that team functions be recognized and followed as a team: The brick-layer lays bricks, the foreman checks them, the accountant pays for the cement… all the way up the chain,” he goes on.
According to Hussein, it’s all about defined functions and specialist roles within an organization, with each team and each team member responsible for their own function. A company begins to work like a well oiled machine then, where each nut and each sprocket add together to make the machine go. But where does the CEO come in? Hussein explains, “There is a world of difference between management and micro-management. Involvement in every facet of a company has different meaning for different people. For a CEO, it is in laying down policy and seeing how it is carried out, providing the correct mix of personnel, being the balancing factor for conflicting team personalities.” So then, in an organization where each individual is responsible for his/her niche of responsibilities, the CEO should only be responsible for the overall direction of the company and be solely concerned with setting the strategy and ensuring that it is followed.
The question that arises then is, how can the CEO know if the execution of his/her strategy is flawed or flawless? How can the CEO demand the respect of his ‘specialist’ workforce? Imagine this scenario in an IT company: the CEO is an excellent time, man and project manager, and has just been hired from a reputable MNC. He has all the knowledge of strategy and direction, and can motivate his team. But here’s the twirler in this equation… he has no prior experience of IT and programming. He does not know how his team does what they are supposed to do. So within this scenario, imagine how easy it would be for the team leader to sell a load of hogwash to the CEO as reasons for why a certain project is running behind schedule, or why it needs more resources? Or well, why it just can’t happen?! Imagine then, how hard it would be for the CEO to negotiate with his own team… how hard it would be for the leader to win the respect of his people. The truth is, unless the CEO does not have core knowledge of the business and its intricacies, no true strategy and direction can be set and no execution can be monitored or measured.
Atif Sultan Khan, an Assistant Brand Manager with a leading FMCG Multinational comments, “It’s absolutely vital for a CEO, as the overall line manager of the company to have knowledge about the operations of the company.” It is largely because of this reason that many companies that hire CEOs look for experienced individuals who understand the nitty-gritty of the business. “The CEO’s business has to be the overall business,” Atif points out. “There are no two ways about it. The CEO needs to understand Marketing, Sales, Finance and everything that goes on in the company in order for the work force to respect him and look up to him.” Even for companies where promotion from within is a policy, a mix of experience of the various functions is considered vital before a manager or a director is considered eligible for a Chief Executive role. So it seems as if Flair and Charisma just can’t make a CEO go! But what is interesting is that even when the workforce expects the CEO to have understanding of the business, they do not expect him/her to be a micro-manager. Strategy has to be the key forte of the CEO, and in order to set strategy, an intricate working knowledge of the day to day operation and execution of the company is the basic stepping stone.
Unfortunately, Hussein Akbar does not find this the standard pattern in Pakistani CEOs. “What I have been observing more and more in Pakistani organizations is the trend that the CEO believes himself to be a better accountant, a better copy writer and a better salesman than everyone else in his team. This negates the concept of a team,” he says. Hussein goes on, “The designer’s job is to come up with the best possible logo and the CEO’s job is to hire the best designer possible. You either let him do what he is good at or it is your failure for hiring the wrong person.” But Hussein believes that most local CEOs do not work on team building,
believing that by Micro Management, they can be the best resource within the organization. “You can actually spot these ‘do-it-yourself’ CEOs easily! They’ll be the ones telling their tea-boys how long to boil the water,” Hussein says with amusement. “The moment where the CEO starts suggesting different ways to mix mortar is when the whole chain breaks down,” he says. More often than not, these very CEOs are the ones who believe in saving a buck or two by hiring cheaper work force and believing in a chain that has but one link.
Having Enough Right Resources
Hussein raises an interesting and intriguing point. You are as strong as your weakest link, and in order for a CEO to be strong as a leader, he/she needs to have strong links in the chain, and also needs to have the right amount of links in the chain. What this essentially means is that when it comes to resources and hiring, quality needs to be the key. No one wants to have an organization which is fat and where the head count is unnecessarily high; where individuals can get lost in the system and eventually get a lifelong sustenance
package for being less than what their job description specifies. But at the same time, you don’t want to be part of a company which does not identify needed resources and which does not move immediately to hire these resources.
It is very important, hence, from a CEO perspective to first of all identify the required head count for the effective and efficient performance of the company; and secondly to have a good Human Resource system in place in order to attract and hire the talent that is required. Talent that is both hungry to perform, and also willing to grow within the company. Speaking of talent, the most important talent hence becomes the HR Department and its team. These have to be people that the CEO can close his/her eyes and trusts, as these are the people that will hire the rest of the teams within the company. In turn, those teams will be relied upon by the CEO for effective and efficient performance; and for proper understanding and execution of the set strategy.
Atif Sultan Khan couldn’t agree more, “The HR has to be most important part of the CEO’s arsenal. He has to have belief in his HR’s ability to recruit the right amount of people and the right sort of people; and to be able to retain them with the right amount of compensation.” Only and only once the team is in place can the CEO think about setting a direction and monitoring the company.
Compensation and headcount, as mentioned earlier, are paramount factors in this regard. The strategy for the said has to come from the CEO in accordance with his Board of Directors and the HR of the company. Interestingly, some companies have an Internal Board of Executives, who sit with the CEO, as knights on a round table, and discuss the various options and repercussions of strategies. This Management Committee becomes the CEO’s eyes and ears, and should be made of the cross section of the company’s functions. Normally, the various Functional Heads within the organization comprise of this committee, and needless to say, the hiring of quality Functional Heads becomes another vital ingredient in CEO success.
Heart of the Company
So, it’s pretty clear that the CEO has to have knowledge of the working of his/her company, and needs to have the right sort of individuals making up the teams that work in the company in order to expect things to work well. But the buck doesn’t stop here; as we touched upon earlier, it is part of the CEO’s responsibility to be a leader, and to motivate the various teams and to command respect. A workforce will only work to the best of their ability (no matter how good they are – thanks to the HR) if they look up to their leader and respect his/her decisions. The most important thing is faith: the workforce needs to believe that the direction set by the CEO is best for the company, not because the CEO said so; but rather because the CEO’s experience and knowledge tells him/her so. Similarly, the workforce should believe that the CEO would make the right decisions for them and the company; and that will only come when the CEO is experienced, charismatic and a good resource manager.
HD Gupta makes an inspired comment, “CEO is like the heart of the company: he has ot be the one who links the responsibilities of all departments and is able to balance everything through his decisions.” True to the analogy, the CEO has to pump the right amount of blood or resources to his/her various organs or teams, in order to ensure the best for the business. The CEO needs to ensure that things don’t go wrong in any organ of the company. HD Gupta explains what could happen if things go wrong, “Once there is disorder through either excess or shortage of blood; organs will fail. As a result, eventually, the CEO will fail too.”
