The interesting perspectives on CEO approaches from Mckensey, Harvard Business Review (HBR), now IBM
Importantly, Chief Executive Officers determine 45% of the success of every company.
From strategy to culture, the CEO provides the direction. The HBR subsequently takes a look at the approaches used by 160 CEOs globally and concludes that all CEOs use five approaches to succeed.
1. Strategic CEOs: They set long term plan, examine them and ensure they succeed. These CEOs devote approximately 80% of their time to external issues critical to the organization’s operations and success — customers, competitors, technological advances, and market trends — as opposed to internal matters such as hiring or control systems.
2. Box CEOs: CEOs pursuing this form of leadership spend a lot of time developing detailed, prescriptive policies, procedures, and rewards to reinforce desired behaviors. Companies here will hardly employ new executives because the length of service will only mean that the internal team has learnt enough from the system to replicate the exact policies and procedures.
3. Human Asset approach: CEOs here hand down their values, practices and attitudes to various leaders in the value chain to be just like themselves. CEOs using this approach will be involved in the recruitment and training so that they have satellite executives at the various facets of the companies.
4. Change approach: They are the exact opposite of the Box CEOs. The people they value are usually those who could be called aggressive and independent — people who view their jobs not as entitlements but as opportunities for advancement that must be seized every day.
5. The Expertise Approach: CEOs using this approach will usually find a particular expert that gives the company a competitive advantage and then indoctrinates people in the company.
Instructively, the different approaches can work perfectly in various businesses. A combination of methods only means pulling strengths to make the business ecosystem better.
Critical for CEOs globally according to IBM is customer centric. A research done on 3,000 CEOs in a space of 20 years by IBM indicate 48% of them were customers, clients, and citizens centered, which result in better revenue, compared to those who were operations and product based executive.
The Institute of Business Value indicated that 56 percent of these CEOs believed in the need to aggressively pursue operational agility and flexibility. It’s all about continuously adopting new ways of doing things quickly and handing over the culture to the team to make impact.
Finally Mckensey and Company focused their attention on 7,800 CEOs in 70 countries and 24 industries.
The outcomes indicates a CEO leadership that clearly states the corporate strategy of firms. Great CEOs also place the same emphasis on strategy as talents. Globally, companies investing in portfolio companies say they will rather spend on businesses that prioritise talents and strategy.
Finally, one-third of all CEOs really know what their teams are exhibiting. Unfortunately, most are not in touch with what is on the ground. Mckensey’s report indicated that CEOs that had a well-coordinated management team delivered on 1.9 times more revenue above the median.