Who Can Help the CEO? Other CEOsMelissa Raffoni
Posted on HBR Now: August 10, 2009 2:30 PM
Recently HBR published a popular case study called "Who Can Help the CEO?" about a stressed out leader without confidants. As someone who runs CEO peer groups, my answer to the question of who can help the CEO is, of course, other CEOs.
A typical CEO peer group runs under a structured agenda in which four or five CEOs present written business cases outlining their most critical strategic business priorities and their plans to address them. Part of the role of the group director (me) is to help the CEO identify priorities so that they receive optimal leverage for themselves and the company.
But what's it really like in a room full of mostly Type A leaders who are used to running their own show and not being questioned by peers? Well, at their best, the peer groups help CEOs see what they're missing. They are human, after all, and like all humans they often miss the forest for the trees.
Here's a recent example. One of our members is doing an amazing job ramping his company with a technology product that meets a burgeoning market need. His projections take the company from $3 million in '07 to $10 million this year to $30 million next year. That's a lot of growth fast. So I encouraged the CEO to lay out the organization he would need in 2010. If he had that, he could start laying the ground work for the organization that will support a company three times its current size.
We both thought it was a straight forward exercise and concurred that it would be great for the other CEOs to simply validate his thoughts on what he needed to do. Key to his plan was his next critical senior managment position to hire. He believed he needed a VP of Engineering.
Surprisingly, nearly every other CEO in his peer group disagreed with this fundamental assumption. They said he should focus on hiring a VP of Operationss and Finance. They acknowledged it's a harder role to fill, but they felt it provided leverage to the CEO so he could do what he did well—make rain and future technology strategy.
He hadn't even considered the role or the idea of such a combined functional executive. Making a key hire is a big deal in a company this size—you want to do whatever you can to make it right. I was happy the group brought clarity.
Next case: A CEO brings in a Business Unit Manager to present a plan for how to drive sales in the organization. Frankly, I knew this one was missing the mark, but I felt that if the CEO heard other CEOs tell him that, it would more useful than just hearing it from me.
The Manager was new and had inherited a few bad eggs on the staff and an unfinished CRM project without a champion. The CEO was reluctant to cut the cord on the bad eggs, wanting to give them a chance under new management. His plan was to spend time coaching the underperformering bad eggs to get them up to speed. As for the CRM, he proposed that corporate invest in a better system to improve sales reporting.
Harsh as it might sound, the CEO feedback was that these two focus areas did not constitute a plan. Not only was working on the poor performers counterproductive (they advocated cutting the poor performers and spending time on star performers), but the CRM was a crutch for lack of thoughtful sales planning.
They advocated a clear definition of the customer target market, a strong value proposition, a channel strategy that made sense, and strong measurement to test and improve the model over time. The feedback was quite tough, but the CEO was grateful to have a safe place to be wrong.
Some of the advice might sound obvious, but that's just the point. We often overlook the obvious if we don't have the unbiased, frank input that forces us to see what we're missing. We all get caught in the weeds and the more weeds; the tougher it is to see the surface of the water.
More examples to come in later blogs. I hope readers can pick up nuggets of insights to help them with their own business challenges.
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