Strategic Management Insights

From Vision to Reality – A CEO Framework

You may be the CEO of a company or the Executive Director of a nonprofit.  Or you may have P&L responsibility for a group or a division.  If so, you know that having the top job is not all about bossing people around and collecting bonus checks.  It’s very hard work and a ton of responsibility.  And there’s nowhere to hide.  A CEO’s performance is easily measured over time and obvious to most everyone.  Either the company is building market share, revenues, and profits, or not.  Either the people who work in the company are focused, effective, and committed, or not. 

Business luminaries like Peter Drucker insist that great CEOs are made - not born.  I agree wholeheartedly.  In fact, I firmly believe that CEO success is not an accident.  It’s a system and it can be learned by anyone who is willing to invest the time and effort.  Through my own CEO experiences, observations, and related studies over the past 25 years, I have identified a common framework that a CEO can use to focus on the key drivers of business success.  Think of it as: R = P4.  Results come from Purpose, Plan, People, and Process working together to synergistic effect.  The following is a brief overview.

Results - are everything.  Effort and intention are admirable but ultimately irrelevant.  In the business world results are financial and most often represented by changes in shareholder wealth.  In a nonprofit or public sector organization, results are measured in terms of the quantity and quality of benefits received by the targeted recipient pool. 

Purpose - is the inspiration, born from shared Mission and Values, that fuels an organization’s character and drive.  Mission and Values are too often overlooked or watered down.  Yet they’re critical to a CEO’s effectiveness.  Defined properly, they energize and motivate the entire workforce.  They set the tone and establish the cultural foundation on which all else is built.  The CEO’s first job, therefore, is to make sure the Mission and Values are noble, powerful, clearly described, and persistently communicated across the organization through word and deed.

Plan - is how the CEO uses Strategy to connect Vision to Reality.  The most powerful Vision describes exactly what the business will look like in 3 to 5 years.  A great way to do this is to write a fictitious article set five years in the future that describes the company in detail, including its financial results, number of employees, locations, products and services, key customers, industry awards, etc.  A precise Vision gives everyone on the team a clear target to aim for.  (You can’t hit a target you can’t see).  Then an intelligent and well communicated Strategy shows the team a realistic path to achieving the Vision.  The CEO develops the Strategy with help from a cross-functional team, defining the market(s) and deciding how the company will differentiate itself successfully from the competition.

People - are the core of the business.  Only great people, led effectively and working together, can maximize a CEO’s most precious resource – time.  Mind the old saw: “Hire slow and fire fast”.  Unfortunately it’s human nature to do the opposite even though a bad hire costs 3 to 5 times the person’s annual salary.  Besides hiring well, a CEO should focus on developing key managers by talking with them, challenging them, measuring their performance, encouraging them, and rewarding them appropriately.  In the end, it’s the caliber of the people that determine the extent of a company’s success. 

Process - is the operational glue that holds it all together.  Most of a CEO’s success will come from having strong processes to: 1) keep the organization focused on key strategic objectives, and 2) building the ranks of high performance managers.  The best process for using Strategy to turn Vision into Reality is the Balanced Scorecard.  This straightforward tool maps the company’s strategy in a format that makes it easy to communicate to everyone.  It also tracks the company’s progress against key strategic objectives so that operational and/or strategic modifications can be made as appropriate.  The best process for building a high-performance team is one that incorporates regular (quarterly) business performance reviews with related management personnel.  The good people who grow and produce results have to be encouraged and rewarded, and the weak ones have to be weeded out. 

Conclusion
A CEO who wants to get better results should evaluate him or herself honestly in the above four categories.  Remember: “If you keep doing what you’re doing you’ll keep getting what you’re getting.”  Give yourself a score from one to ten in each area.  Then begin making improvements in the areas where you score the lowest.  Over time, if you stay with it, you’ll see results improve dramatically.  And please contact me with your thoughts and experiences on the subject.  As a student of business and leadership I am always looking to learn more so that I can continue to share my best findings with others.

- Brian Kinahan

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