May 16, 2009

Executives, One Foot In and One Foot Out

The last thing any executive should be doing is getting caught up in the weeds of management. The executive needs to lead and define the organizational strategy and the management team needs to execute. The executive is the link between what needs to get done (stakeholders’ needs) for the stakeholders and getting it done (management execution) through the organization’s people, process, and technology.

How does the executive perform this linking role?

Not by looking myopically inside the organization, and not by jetting around the globe shaking hands and kissing babies. Peter Drucker said “ The chief executive officer (CEO) is the link between the Inside that is ‘the organization,’ and the Outside of society, economy, technology, markets, and customers. “

In Harvard Business Review, May 2009, A. G. Lafley the CEO of Proctor & Gamble see’s that the CEO’s job is to “link the external world with the internal organization.”

The executive is the bridge between inside and outside the organization. And by having one foot in each, he/she is able to cross the artificial boundaries and bring vital stakeholder requirements in and carry organizational value back out.

Lafley breaks down the CEO’s role into four key areas, which I would summarize as follows:

  • BUSINESS SCOPE: Determining “the business we are in” and not in.  No organization can be everything to everybody. We need to determine where we will compete and where we will withdraw. GE’s Jack Welsh used to insist on working only in those markets where GE could be either #1 or #2. Drucker’s view is that “performing people are allocated to opportunities rather than only to problems.”
  • STAKEHOLDER PRIORITIZATION: “Defining and interpreting the meaningful outside”–this is really about identifying who are our stakeholders and how do we prioritize them?
  • SETTING THE STRATEGY: Balancing “yield in the present with necessary investment in the future.” Genuine leaders don’t just milk the organization in the short term, but seek to deliver reasonable results immediately while investing for future performance. Lafley states “We deliver in the short term, we invest in and plan for the midterm, and we place experimental bets for the long term.”
  • ORGANIZATIONAL CULTURE: “Shaping values and standards.” Lafley argues that “the CEO is uniquely positioned to ensure that a company’s purpose, values, and standards are relevant for the present and the future.” Of course, the culture and values need to guide the organization towards what matters most to it, to meeting its purpose, and satisfying its stakeholders.

To me, the Drucker-Lafley view on the CEO as a bridge between boundaries inside and outside the organization, can be extended a step down in the organization to other “chief” roles. The CEO’s vision and strategy to deliver value to the stakeholder to the role is fulfilled in part by the chief information officer (CIO) and chief technology officer (CTO). Together, the CIO and CTO marry needs of the business with the technology to bring them to fruition. Within the organization, the CIO is “outward” facing toward the needs of the business and the CTO is “inward” facing to technology enablement. Together, like two sides of the same coin, they execute from the IT perspective for the CEO.

Similarly, the chief enterprise architect (CEA), at the next rung—supporting the CIO/CTO, is also working to span boundaries—in this case, it is to technically interoperate the organization internally and with external partners The chief enterprise architect works to realize the vision of the CEO and the execution strategy of the CIO/CTO.

The bridge the CEO builds links the internal and external boundaries of the organization by defining stakeholders, scope, business strategy, and organizational culture. The CIO/CTO build on this and create the strategy to align business and technology The CEA takes that decomposes it into business, information, and technological components, defining and linking business functions, information flows, and system enablers to architect technology to the business imperative.

Three levels of executives—CIO, CIO/CTO, and CEA, three bridges—inside/outside the organization, business/technology sides of the organization, and business process/information flows/technologies within. Three delivery mechanisms to stakeholders—one vision and organizational strategy, one technical strategy and execution, one architecture plan to deliver through technology.


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1 comment:

Long Huynh said...

I have made a reference to your great post at http://tao-of-living.com/2009/06/a-rule-of-3-quote/. Your use of 3x3 is eloquent and poetic at the same time.