The only 4 things a CEO must do
Dr. Enric Bernal
Inspiring Humans to Connect to Their Higher Purpose and Become the Best Versions of Themselves. By connecting motivated and inspired individuals, we create high performing teams, and thriving organizations & communities.
The only four "internal" elements that a CEO needs to focus on to be successful are: (C) Culture, (O) Organizational design, (S) Strategic vision and (T) Talent. I call it the COST model as an easy way to remember it.
There are "external" elements that a CEO needs to do like securing funding if this is not something taken care of by internal operational revenue, like in the case of start-ups. If the company is growing through M&A's she will also be very involved in it. A CEO is also the external face of the organization in front of key stakeholders like the board, investors, the press and market analysts. But internally, a CEO needs to focus only in getting these four elements of the COST model right. The rest should be left to her team to develop and manage.
The two components on the left (C&T) are what we could consider soft or people related and the two components on the right (O&S) are more hard or business related. Both sides are equally important and they feed one into another. Moreover, if you don't have time to do the four elements and need to choose, guess which side should be your priority?
These four components are:
Culture:
Satya Nadella, Microsoft's CEO, during the annual shareholder meeting in 2015 said: "If an organization gets its culture wrong, none of its other plans matter"... “Our ability to change our culture is the leading indicator of our future success”.
If I had to pick one of these four components to lead over the rest, it will be culture. Some CEOs like Nadella get it without anybody telling them, others don't even understand what culture is and how it can enable or disable their organization's success.
My best definition of culture is: "how things are done around here". My second best definition of culture is: "The set of values, beliefs, mindsets and practices that inform how people in the organization communicate and make decisions". Choose your own definition, but Culture is one of the top things that should matter to a CEO.
Organizational Design:
This is the number one joker played by consulting firms. From small niche consultancies to the big 5, all know the power of designing an organizational structure that suits your objectives, whether those are growth, cost improvement or client centricity. All have an optimal organizational design. The beauty of it is that it is not static; the ideal organization will change and evolve with time as your environment and the business imperatives change.
When I was working at HP years ago, I remember I had a manager that had a sign in his desk with the sentence: "Structure leads behavior". I'm not sure I fully understood it at that time but I do now. There are two main research streams in human behavior change, those who believe that the environment around us will make us change (behaviorism psychology) and those who believe that change comes from a complex inner decision (humanistic psychology). Research over many years indicate that both are probably true and this is the reason why I left four components in the COST model: the soft on the left and the hard on the right. They support and help each other, especially in times of change.
Strategic Direction:
Well, what can I say about strategy that you don't know or that you cannot read elsewhere? "Strategy gets eaten by Culture"... Maybe I should corner this sentence as an alternative to Peter Drucker's famous original quote. However, even if culture wins over strategy, when in opposition, the strategic direction is one of the key pieces of what a CEO must deliver. What is important to notice if this strategy could be accomplished with the existing organizational culture. If the answer is not, then better change the culture before attempting to realize such strategic vision.
I define strategic direction as: "the aspirational (yet achievable) organizational state to be realized/achieved in the next 3 to 5 years". This gives the overall direction of the organization and this is why I think is one of the key elements a CEO needs to be involved in. I think that the detailed strategy can and needs to be delegated to the Executive Team or Senior Leadership Team, but the CEO need to be involved in setting that strategic direction.
Talent:
It is good to finish with talent, as this is probably the most important component of it all. Without people there is nothing, there is not even a possible culture. Artificial Intelligence will be replacing jobs little by little but talent will still be needed in higher skills jobs.
How I normally put it: "if you hire well (aka: good talent) your life as a leader will be a piece of cake, but if you hire bad, your life is likely to be hell". I like to dramatize a bit but I have learnt that lesson from experience. After hiring you still need to develop your talent, hence the importance of succession planning and leadership development programs.
Let me know if you have a complementary point of view.
Best of luck!
Global Corporate Development Leader | P&L Leader | Corporate Strategy | M&A | Business Development
4 年Thanks Dr. Enric Bernal for sharing the COST model. As always, you bring a really good perspective into how leaders should focus their energy.