A CEO wants to significantly grow his company, either to prepare for an IPO or
to become an interesting takeover target. However, he struggles with
delegation. When responsibilities are delegated, the job isn’t done to the
CEO’s satisfaction and he ends up doing the work himself. He asks: what is the
CEO’s job? Is it for me?
from the CEOs:
order to grow the company to the desired level, it is necessary to hire
competent people and delegate. The most important position will be a COO with
deep experience organizing people and functions.
CEO’s role is to provide the vision and strategic objectives for the company.
The COO’s role is to assure that the right people are in place or hired to do
the work necessary to realize the vision and operational objectives.
CEO-COO relationship will be pivotal. If there are specific ways that the CEO
wants to see things done, these must be clearly delineated in discussions with
role of the COO will be to organize the company to reach the growth objective.
a competent, talented HR person to plan the organizational development road
map, and the positions that must be filled in stages to reach the goal.
growth plans of the company are ambitious. Absent significant change, growth
will be limited to a fraction of the current objective.
with the COO and HR person, build the organizational chart for the size company
that the vision imagines. Fill the chart with current personnel where the fit
is appropriate. Determine where the gaps exist and build a plan to hire these
people in stages.
E-Myth Revisited by Michael Gerber provides an exercise to accomplish this.
a high-level assistant to help in areas where the CEO finds it difficult to let
go. This will be another key relationship and will be important to learning how
to let go.
a CEO coach.
will likely be an individual with significant experience who has achieved the
growth envisioned by the strategic plan.
CEO Coach will help to draw lines between delegating and micromanaging and will
help the CEO to learn to effectively delegate to qualified people.
Situation: Historically the management of a company has been family and a few long-term managers who’ve grown with the company. Some of these managers have reached their limit. Over the last couple of years, the company has added new, high capacity management. Who do they do with existing managers who can’t keep up? How do you facilitate management change?
Advice from the CEOs:
This is why packages exist. Employees, even key managers are not forever. As a company grows both its needs and culture must grow. There comes the time in the life and growth of most every company when certain managers are unable to accommodate this growth or adapt to the changing culture. You may well find that these managers are not very happy and no longer feel at home. Whatever the case, it is better that they move on.
Who creates the package?
You or your HR manager come up with the outline.
Get professional advice if you have none in-house.
Is there a moral issue – our commitment to our employees?
If an individual is demotivated, they are not contributing – this solves the moral issue.
If the individual is terminated amicably this can be for the best – for both parties.
How do you ease the pain of separation, both for the individual and the company?
Packages can be adapted to the situation.
Take the example of a manager who has made important contributions in the past, and who has good relations with others in the company, but doesn’t have the skills to adapt to the next level. Include a generous term of job search assistance. If the separation is amicable, offer them space, computer and a telephone to facilitate their job search. This can ease the separation.
Situation: A CEO’s “Number 2” is returning from maternity leave. He sees a role for her helping him grow the business and wants to give her an incentive for taking on that role. What is an appropriate incentive? What incentives do you offer your #2?
Advice from the CEOs:
Remember, first, that your #2 is a person with a new baby. Remember what it was like when you and your wife had your first child. How did your priorities change? How did your wife’s priorities change?
Never make her choose between child and job – you will lose. Offer her lots of flexibility. For example, allow her flexibility in hours to accommodate the needs of her child. This will mean a lot to her.
Find out what is important to her – what does she see as her role and goals. Be sensitive to the possibility that the birth of her first baby may have changed her priorities.
Here’s the message: “You’re valuable and I want you on my team. I appreciate your responsibilities with a newborn. How can we make this work for both of us?” Build a role around this – not an incentive program.
Many Silicon Valley and other urban families need two incomes. Work out something that works for her.
Have a Plan B in case it turns out that her priorities no longer align with yours.
Situation: A company’s current directors are all insiders. The CEO wants to bring in an outside director for greater perspective, someone who can help the company grow to the next level. What should they look for? How do you recruit an outside director?
Advice from the CEOs:
Look for an individual at a company in a similar market segment that is the revenue size that you want to be and which is selling to the same customers that you do. You want their sales process to be similar in type and complexity of sale but non-competitive with your company.
This can be an inactive founder or past employee who has been in GM role with P&L responsibility.
Write a list of the needs that you want this person to fulfill. Use this to evaluate prospective candidates.
Is it OK to hire a stranger?
Before you speak with a candidate, research their background and reputation.
You want someone who can provide information and a perspective that you don’t have now. During the selection process you will get to know the person.
Consider a high level individual from a company that has been a top customer. This individual can help you understand how you are viewed in the market, and how you can enhance your positioning and competitiveness.
Have lunch with a local recruiter who regularly recruits directors for companies. Get their perspective on how to select an outside director and what to look for in a candidate.
Situation: For a CEO to lead effectively, she or he needs to be able use both dominant and facilitative modalities of leadership. James Church, in Navigating the Growth Curve, ties the use of each mode to the growth stage of the company. A CEO asks whether the use of each modality is purely a question of growth stage, or whether there are situational guidelines for the use of each modality. When are you dominant and when do you facilitate?
Advice from the CEOs:
The Dominant Mode is appropriate when there is an immediate situation with a clear desired outcome; whereas the Facilitative Mode is appropriate when fixing a broken system that produces issues, or to increase team communication and contribution. As examples:
The Dominant Mode is appropriate when there is an immediate issue to be resolved, with clear legal implications and a clear response based on established policy.
The Facilitative Mode is appropriate when you want to develop and institute policies and procedures to handle issues ahead of time, or to establish guidelines for action. In these cases you want both input from the team as well as buy-in to institute the resulting decisions.
Strategic Planning shifts from Dominant to Facilitative Mode as the organization grows and becomes more complex. Early on, strategy needs to come with a single, decisive voice. In larger companies strategy becomes a group exercise because there are many moving parts and teams.
Another way to think about this is that Dominant is appropriate when “the buck stops here,” and will shift from CEO to managers for specific decisions when you reach a stage where the managers are now dominant. Facilitative becomes appropriate when managers and employees – those below the level of company or division leader – need to make the decision instead of the leader.
Situation: A company has done a number of things to build company morale. Participation is variable depending on the activity. The CEO wants to build a system to measure employee morale. What metrics do you use to measure changes in your culture over time?
Advice from the CEOs:
The Gallup Organization has focused on this issue perhaps more than any other organization in the world. They find that regularly conducting surveys allows you to measure and improve your culture over time. Their surveys focus on 12 questions that they have found most critical to employee morale within a company.
Do I know what is expected of me at work?
Do I have the materials and equipment I need to do my work right?
At work, do I have the opportunity to do what I do best every day?
In the last seven days, have I received recognition or praise for doing good work?
Does my supervisor, or someone at work, seem to care about me as a person?
Is there someone at work who is interested in and encourages my development?
At work, do my opinions seem to count?
Does the mission/purpose of my company inspire me make me feel that my job is important?
Are my co-workers committed to doing quality work?
Do I have a best friend or mentor at work?
In the last six months, has anyone at work given me a review or talked to me about my performance/progress?
This last year, have I had opportunities at work to learn and grow?
Notice that not one of these has to do with compensation or benefits. Rather they focus on employee perception of how they are managed, whether they have to do the tools to do their job, and feeling that others at work care about them.
Another measure to watch is employee retention – particularly of your best employees.