The role of the CEO
I have recently spoken to two CEOs with a remarkable amount in common – they are both business owners with the same number of staff, have similar revenues, both mange blue collar workers, each have two children between the ages of five and nine and both have “no time” for a number of key things:
· Spending quality time with their wife/partner
· Spending time with the kids
· Spending time on hobbies/personal interests/catching up with mates
· Thinking strategically about their respective businesses
· Being a CEO
It is of course not true that there is “no time” for any of the above (we all have 24 hours in a day, 7 days in a week and 365 days in a year), it’s just that their priority is working in the business to meet customer commitments and cover staff shortages/absences. Don’t get me wrong, I am not being critical of their commitment (this is going to be necessary from time to time), but when it happens all the time, then there is something seriously wrong and eventually something will have to give: health, relationships and/or the business itself. I suspect that some of you reading this may be thinking ‘yes, that’s me as well’ since it is by far the most common issue I encounter as a business advisor.
Although it may look odd, I added the last bullet above for a specific reason. Since I have been working with SMEs, I don’t think I can recall a single time that I worked with a business that has had a defined Position Description (PD) for a CEO/MD (I’ll just use CEO for the rest of this article, they are essentially the same role). It is not unusual to see PDs for a Sales Manager or Operations Manager along with other key functional roles, so why not a CEO? Surely this role is just as important right? It sure is, but without a clear, documented understanding of what a CEO should be doing, guess what happens? The CEO gets involved in everything! The problem gets compounded since the top person is often also the business owner so there is a massive amount of skin in the game, passion for the business and likely technical competency in the primary products/services of the business, all of which conspire to keep them very busy. The lack of a defined Position Description for the CEO role and their level of ‘busyness’ is no coincidence; it is pretty well guaranteed to happen. (In fact, the lack of a well-defined Position Description for any role can also result in excessive hours for the employee especially if they are passionate about what they do, care about customer outcomes and are technically proficient).
No surprise then that I recommend that a Position Description be defined for the CEO role and indeed for every role in the business (if these don’t currently exist, they can be done over time starting with the most senior ones and can be done using a ‘divide and conquer’ approach with other managers). Given that so few CEO PDs appear to exist, you may well be wondering what this would look like? One way to think about it is to consider what could not be delegated to others, so for example it is not the CEOs job to write a Sales Plan or do the payroll etc. For me, the CEO’s role is about ensuring balance across the entire business so that staffing matches customer demands, and financial performance can be planned and managed to support business requirements. The role must also cover the following:
· Business strategy – setting corporate direction and managing in accordance with this
· Business leadership – what should the company be focused on and staff supported in?
· Financial results – overall responsibility for company profit and loss
· Commercials - Defining the terms of business with partners, suppliers, customers
· Corporate governance – ensuring compliance and adherence to rules and regulations
I wonder how many CEOs are not doing things in this list and doing stuff that isn’t listed?
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Ian Ash ACC AIECL AInstIB
Managing Director OrgMent Talent Solutions