How to become the modern CEO
Many CEOs feel stuck between requirements from the board and the reality back at the office.
They get requirements to grow the company and they work really hard to achieve the targets but get stuck in things that don’t bring the company the necessary growth.
Growth require focus and that the CEO spend time on the strategically important areas that are required to grow the company. Aligning the management group is one such important thing but it’s often not enough.
As a many CEOs you may feel there is little time available for the strategic work to grow your company.
Many CEOs spend their time controlling not on growth
Many CEOs get stuck in routine tasks, they are spending countless hours on administrative and control tasks such as:
> Filling Excel files with the numbers, size and frequency of sales forecasts/revenue forecasts each months, quarter, and year.
> Trying to calculate their average margin and their monthly track record
> Asking their employees for reports every week
A lot of time is spent to please the board with reports that consume a lot of time to produce.
Because a CEO need to be control! A CEO want to know what is going on inside the company. Of course its is understandable why CEOs are doing this.
As CEO you are after all in charge and if the company faces challenges it is the CEO’s responsibility to overcome them.
But this focus on manual controlling tend to generate strong negative side effects.
In fact a CEO is responsible to reach the targets set by the board. In many cases that means growing the company.
If growth is the target then working with committed colleagues is key.
Unfortunately, to much focus on manual control tend to generate a fear and stress based company. In this type of vertical organisations, employees tends to develop a childish behaviour which is expressed by:
- A lack of initiative
- A lack of confidence
- A tendency to follow orders even if they are irrelevant
And finally disinterest which is leading to demission.
Needless to say that in the end, it can be very harmful for the company and at least it makes growth much harder.
Growth and profitability comes from engagement
There are many studies and reports on the topic of profitability. One very important part most of these reports point out as a key ingredient is having an engaged work force.
Companies with a high degree of engaged colleagues do in general deliver much higher profits and grow faster than companies with less engaged colleagues (majority of the colleagues are only satisfied, they do their job but not much more).
If you are below average on number of committed colleagues (to many unfocused colleagues, they hardly do whats expected from them) you most likely face a tough future with declined revenue and profit and in the long run you risk driving your company into bankruptcy.
Therefore it is key for the modern CEO to turn the number of engaged colleagues up as high as possible!
How the modern CEO gets increased engagement
It is well known that we only have the ability to make a certain number of decisions each day.
This is not humbug! MTI produced a report recently where they have proved the fact that each decision cost a small amount of energy and since we have a limited amount of energy to spend each day we need to spend on things that matters.
A modern CEO makes sure the mind is free to focus on things growing the company rather than mostly on controlling and reporting.
One such thing is to get an engaged workforce.
To get an engaged work force there are four things (according to me) that stand out that a CEO really should focus on.
1. Strong vision and mission
Having a strong vision about the company is really crucial. That explains the future dream scenario for the company.
Having a great company culture good but is not enough, you have to make sure everybody have a clear understanding of WHY you exist, for whom you exist, WHAT you are doing and HOW you are doing that. Otherwise it would be very difficult for the company to grow, because everyone will have a different opinion about what you want to accomplish.
To do so you can use two leadership tools, often mingled, the Vision and the Mission.
Your vision statement gives the company direction. It is the future of the business, which then provides the purpose. The vision statement is about what you want to become. It’s aspirational.
On the other hand, the Mission statement describes what you do, what is the core of your business. The mission statement focuses on the present and your day-to-day objectives
This is not to be mixed up with a target. The vision makes it also clear for all colleagues why they should come to the office every day, besides getting paid.
If the company lacks a vision, it’s the CEO responsibility to go back to the board and utterly the owners of the company and makes sure its created. If this is not possible, it’s really hard to get the engagement among the colleagues up to those levels needed.
Its of course possible in some industries where for example money is the by far strongest driver for the individual employee. In those cases the engagement is there, but its not for the company, its for the individuals own situation. In some cases that align very closely with the company’s situation and therefore the end result is a very profitable business even if the company lacks a strong vision.
2. Strong and clear company culture
When a sports person enters a new team, they put on a new team shirt. That often comes with a set of rules on how to behave.
It’s the same for companies. When a new colleague join the team it should be clear on how they should behave. Thats governed by the company culture and core values. These are very important to align the way all colleagues behave, both externally and internally.
The company culture and core values will be the bounds connecting the employees and serve as guidelines to make the best decisions. This why they are so important.
Only companies with a strong shared-culture can thrive in the long run.
Therefore these need to be clear and explained well, not just once but repeatedly through out the workday, week, month etc. Never give up or let behaviour outside the core values slip by.
3. Clear, achievable, targets
Again, many studies have been done on what motivates people and make them committed/engaged. Clear and achievable targets is one such thing.
If that is missing it tend to create unclear situations. It’s also hard for the individual to verify if they are performing well or not.
Unclear situations where it’s not possible to know if you are doing a good job or not tend to lower the engagement and also in some cases slow down the organisation. If it’s not clear what I need to do, then why bother.
Unclear or unrealistic goals is also a major source of stress and despondency among the employees. However clear targets break down your mission statement in actual, daily goals that will drive the company forward.
To set up clear targets we recommend using the acronym SMART :
S – specific, significant, stretching
M – measurable, meaningful, motivational
A – agreed upon, attainable, achievable, acceptable, action-oriented
R – realistic, relevant, reasonable, rewarding, results-oriented
T – time-based, time-bound, timely, tangible, trackable
Example: A sales department with unclear or unrealistic targets tend to flatten outing not grow the company, they might even start performing worse than previously.
4. Clear expectations
Knowing how to work and do in different situations is also very important. Processes, structure, responsibility etc. need to be clear to all involved.
If these things are not clear people tend to become inefficient, customers need to wait unnecessary long to get service and te company end up in a situation where the result is dependant on the individual employee’s engagement.
A service should be experienced in more or less the same way regardless of who in the company that deliver the service.
All these four topics require the CEOs attention to both settle and also continuously maintain. Often it also takes time. As a modern CEO you prioritise to spend time on these things.
The modern CEO spend time on what matters
An old saying is: You need to give to get. Let’s transfer that expression into the context for a modern CEO. Where the CEO give the time the CEO get the results! It’s actually that simple.
So, we have a limited time during the day, we have a limited energy to spend and limited number of decisions we can make. Then we need to really be careful with what we spend our time.
We recommend a modern CEO to spend their time as follows:
Support managers (20%)
Give the managers what they need to become successful
Recruitment (30%) (up to 100-150 employees)
Make sure all new colleagues align with the culture and values.
Spend time with the important customers. Each important customer should get a visit/call from the CEO at least every year. This gives the CEO hands on insights in the customers experience.
This is also important to make the company don’t loose it’s customer focus.
There are plenty of examples where the company puts the employees before customers, that’s not a good strategy from a long term perspective.
It might work when the economy is strong, but not in the long run. The order need to be
– The customer
– The company
– The employee
Culture and core values (10%)
Be the biggest ambassador for the culture and core values. The CEO should lead by example to make sure everyone else do that as well. This is something a CEO more lives rather than spend active time on.
The active time should be spent on making sure the management group aligns the culture and values in weekly meetings, dialogues etc. so all colleagues are constantly reminded about it.
Anyone not living by the culture should in the long run leave the team!
Together with other members of the management group make sure the company is applying a strong strategy for growth in terms of product/service development, go to market strategies, analysing trends that mights affect the company etc.
The modern CEOs is digital
The need to control a company and have a clear understanding of what is going on inside it and who is doing what still exists in the 21th century and will remains in the future.
But the difference between now and 10 years ago is the adoption of digital and automated solutions. These solutions are a 100 times faster, lighter and more accurate than humans.
In most companies each departments already has dedicated tools such as:
> A Sales acceleration platform for the Sales department
> An ERP for the Accounting department
> A marketing automation tool for the Marketing department
But too often these tools have created silos and separated organisations centered on a specific software with minimal communications between services. This tend to create situations where different departments have very little insights on what the colleagues are doing, on the same customer.
That is why a modern CEO focus on creating seamless digital flows between the different departments of the company.
> To increase insights
> To increase efficiency
> To increase customer service
> To free up time for other important things as culture, supporting colleagues etc.
To do so it’s necessary with solutions that are easy to implement and integrate, preferably plug and play.
The digital solution also need to be an end-to-end solution which connects the important nodes of the organisation (Sales, marketing, finance, delivery, and accelerate the business.
Doing so will have two major positive outcomes.
First the company will have get better internal communication and therefore will be more efficient. Imagine the collaboration between two departments :
- The Marketing Department will generate leads aligned with your Sales Department expectations and being able to see in realtime, which were converted to orders.
- The financial department will get invoices automated with correct order rows, customer info, who closed the deal etc.
And many more useful collaborations.
Secondly, the modern CEO, will have a clear view of the situation with better forecast and better control. This will save a lot of time and energy to do focus on what matter: growing the company.
Finally the modern CEO focuses on aligning everything: the values, the company culture, the vision and mission and the targets plus expectations. The modern CEO want to make sure that the entire company, from the sales department to the marketing department knows the direction and strategy of the company and feel completely part of it.
CEO & Founder @ Salesbox