Why Pay the CEO/ED?

Why do you get paid? Let’s face it. Job descriptions are like fences around a park. The park has many attractions and activities inside, so the boundary just tells you when you’re outside. And park goers naturally go to the activities in the park that interest them.

Job descriptions have so many activities listed that CEO’s interpret the job according to their own enjoyment and hobbyist interests. They don’t go outside the job description. When was the last time you mopped a floor? No CEO has ever been fired for doing the janitor’s job too often! And why would they? There’s too much fun to be had inside their favorite parts of the job description.

It’s frustrating because no one ever says that the whole job description doesn’t apply. As my old boss used to say, ‘Ron, pay the rent and then you can do what you want’. She just never told me what ‘paying the rent’ meant.

What are five things that the CEO gets paid for?

1.??????? Mission and Vision - The CEO gets paid to keep the vision alive. They create and use rituals, celebrations, rewards and artifacts to guard and deepen the mission. Agencies tend to drift.

a.?????? Board members with a strong voice may not be fully committed to the mission.

b.????? New staff members don’t know the historic pressures that forged the mission.

c.?????? Mission creep happens influenced by Funders, partners, and current success

The CEO is the person uniquely charged with mission protection – to light the beacon for the undirected and protect the beacon from those who weaken or extinguish it.

2.?????? Strategy and Execution - The CEO gets paid to plan and carry out the dynamic strategy of the agency. The mission is general. Like a rocket, it is pointed straight up to escape earth’s gravity as quickly as possible. After liftoff, the vision, strategy and execution all must kick in. The CEO proposes a vision of how the mission will add social impact, a three-year strategy to the Board, updates strategy changes each quarter or when major change occurs (ex. COVID, new competitor) with board concurrence, and demonstrates that progress is being made. The mission has no value apart from measurable strategy and execution.

3.?????? Core Values and Brand Promises - The CEO gets paid to protect the Core Values and Brand Promises. Core Values are critical in hiring and termination. We hire for skills and fire for values. Core Values define priorities and set standards for acceptable behavior. At Owensmouth AfterSchool, Empower Students is a Core Value. This places the students as stakeholders over staff convenience. That sounds simple until Gertie Wilcox, a teacher, wastes student time forming 5-minute waiting lines. Tenzin Virak, the manager, warns her that empowering students is more valued than the extra effort required for the staff member to plan activities carefully. Warnings and terminations always reflect a Core Value if they are really the values driving the agency.

The Core Values are directed with the 2-3 Brand Promises to clients. These combine with the Mission, Vision, and Core Values to give very clear ideas to staff as to expectations.

4.????? 1st Responder - The CEO gets paid to protect the urgent. The most urgent tasks of the agency are to keep the Labor Efficiency Ratio at a level that pays for fixed costs and the Core Capital reserve at a level that satisfies the six capital requirements. These tasks are the most urgent of any because you lose your best staff within days after missing payroll. A Cadillac SUV and a tiny Toyota Yaris both come to a stop when the gas is gone. ??

5.?????? Fundraising - The CEO gets paid to pressure board leadership in gift and foundation development. Board members have an important role is asking for gifts and the CEO organizes the effort.

6.?????? Hire ‘A’ Players - If Abundant Cash is the most urgent, then the Right People is the most critical to the long-term success of the agency. The CEO gets paid to

a.?????? Rigorously Select

b.????? Onboard and Develop

c.?????? Relentlessly Fire

until the leaders are in place with the talent, experience, skills and values who can own the agency.

Own the agency? Ron owns Cameron Corners Diner. Ron put his life savings into the place and needs one other senior staff who is ready to react when trouble happens. The diner got a delivery of rotten beef and two diners got into a fight when Ron was not present. Ron has Maria and Visoth who act like owners in a crisis.

The same is needed for nonprofits. Over the years, I accidentally hired a terrorist, had burglar alarms in the middle of the night, found an employee who had set up a bedroom on the premises - unexpected challenges not part of anyone’s job description! It wasn’t the Board of Directors who turned out to help solve the situation. The CEO needs senior staff in addition to the CEO who act like owners at those times.

7.?????? Executive Limitations - The CEO gets paid to do anything they need to do but not do anything they are forbidden to do. The CEO obeys the Executive Limitations.

What is the CEO forbidden to do? There are boundaries. Unfortunately, some of the most talented CEOs also feel that normal rules and customs don’t apply to them. If the CEO has a plan that involves child labor, the Board should prohibit that idea with an Executive Limitation. Critical Execution Limitations typically put limits on financial deficits and investments, treatment of staff and clients, and other practices that the CEO is forbidden to use. Boards don’t fully understand the power of Executive Limitations. The CEO should report regularly on their compliance with the Limitations. This also shields Board members from personal liability from Duty of Care issues.

8.?????? Job Description - What about the CEO job description? The Job Description often has 50 areas, but those are the fences to define limits. As a CEO, I may mop up the bathroom to help out, but I don’t have the authority to give myself that job on a regular basis. 5 Things to get paid for outlines responsibilities and the job description outlines authorities.

I had a manager who liked to fill-in for the front desk secretary daily at lunch. It wasn’t on their Five Things list or even on the job description. So, I suggested that the manager pay himself at the secretarial hourly rate for that daily hour. It brought clarity immediately!

The CEO is paid from abundance to perform five vital tasks. Protect that time so that the Board is directing its resources to the best possible result for the mission.

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Many leaders start out with workshop training but also need team coaching to support them as they lead and change their nonprofit. If you read this as a board member, ask your Executive Director to involve the Board and team in coaching. You can contact me for Team Coaching at 646 824 4647. Thanks for joining me today and I’ll watch for you next week!

Trey Taylor. A CEO Only Does Three Things. A Board of Advisors Book. 2020.

? Copyright TurnAround Executive Coaching LLC 2024? [email protected]? 646 824 4647