I love this idea: "The CEO’s job is to be a Compass, not a GPS"

I recently heard this quote from the former CEO of Merck, Kenneth C. Frazier ...

The only way to lead a global company is to delegate power. In the org chart, who was the farthest person from the customer? Me. Who was the farthest person from the manufacturing line? Me. So why should I be making those decisions? The CEO’s job is to be a compass, not a GPS.

I love everything about this statement! The intellectual honesty, the humility, and the clarity. It is everything we want to hear from a leader. You can listen to the full conversation here .

Two elements of this stuck out to me the most:

First is the discussion of who is best positioned to make a given decision within a large organization. As someone who spends a great deal of time helping CEOs of large enterprises think about innovation and the innovation economy, I often advise that the people closest to the customer make as many decisions as possible (especially as they relate to product or pricing). But I am of course well aware of the fact that this is a lot easier said than done.

It is very easy to convince one's self that as the CEO, or senior leader, you have a more complete picture of what's going on in the business and thus are better positioned to make the decision. Or worse, it is easy to believe that as a CEO or senior leader you are more highly educated and more credentialed than lower-level employees and thus you are in a better position to analyze the data or extrapolate the future.* While forgetting that your distance from the problem creates distortions in your perception and understanding. In light of these very slippery pitfalls, especially for very successful people, I found Ken's humility and intellectual discipline to be something we can all learn from.

The element of this discussion that most resonated with me is the conclusion of the statement: The CEO's job is to be a Compass, not a GPS.

There is so much wisdom to unpack in those 11 words...

• A Compass points in the right direction while a GPS, on its surface, seems to have all the answers; and is confident even when it is wrong.
• A Compass requires its reader to think critically and to be engaged in the journey, while we all know a GPS enables us to turn off our brains.
• A Compass tells you where to go but not how to get there. It does not micromanage and it does not think it has full visibility of the terrain.

The analogies are endless. Just like a good Compass, a good CEO does not pretend to have all the answers. Like the Compass, a good CEO depends on the intellect of others. Like a Compass, a good CEO trusts others to figure out the details. And like a Compass a good CEO is there to provide direction and to help course correct as needed.

Most importantly like a Compass, a good CEO does not pretend to know it all or see it all but rather is focused on the North Star, where we ultimately want to go. And like a Compass a good CEO is steady, reliable, and calm.

I have probably already overused this metaphor. So I will conclude with one related thought and one more analogy. Many years ago I had a lunch meeting with a senior executive from Apptio, an IBM Company , at one point during the conversation he said to me that Sunny Gupta was the best CEO he had ever worked for. I of course could not let that comment pass without asking what made him such a good leader. The answer was simple: he had a great sense for when to rock the boat and when not to. A Compass, not a GPS.

*It is always a bad idea to utilize Mental Models whose conclusion is that one's self is brilliant or in the best position to wield authority. This is the easiest place for confirmation bias and all sorts of cognitive biases appear.