Sunday, August 28, 2011
The Job of a CEO
Recently I have been thinking a bit about CEOs and the challenges they face. There is loads to be said on the topic (most of it already said) but here are a couple of notes from my end:
Some might think its a nice cushy job being at the top, but in reality, its probably the toughest job possible for someone who really wants to lead his/her company. If you think of it, by default a company is always on autopilot when it comes to the CEO's involvement. Whether (s)he does any productive work or not on a given day, its work as usual for the company. So a CEO has to manage his/her time very carefully. There has to be a good mix of:
A) Engaging with company personnel, both senior management as well as employees
B) Engaging with external entities like key clients, shareholders, business partners, the media, etc.
C) Closely monitoring the current and upcoming projects / offerings
D) Planning for the future of the company
That's a quick and dirty list, there might be some key items I am missing. But truth be said, most senior managers would already be experienced and competent at managing their daily calendars. Give or take a bit, most managers can ensure that their time is well spent on all four (or more) of the above key items on their plates. Most good managers would also probably be good at items A through C. Which brings us to D, the deathly item. This one requires Vision. This is where Steve Jobs breaks away from the pack. It requires passion, creativity, balls. This is the make or break item. Unfortunately many CEOs seem to fall into the break category by attempting to do too much.
I have been reading with interest how HP's new CEO Leo Apotheker has been trying to steer the company in a certain direction (towards enterprise, away from personal computing). Most pundits have panned the choices he has made - while on the surface he seems to be following IBM's Louis Gerstner's moves, it may not necessarily work for HP. Here is a great article on what HP is doing wrong. And here is another. They bring out interesting topics such as:
a) A CEO's dilemma about letting a good thing be, versus showing the world his work, his plan, his agenda
b) The problem of planning for the 10 year horizon when a CEO's job may only be for a few years. Also, balancing growth with quarterly performance expectations
c) Working in a territory outside of your comfort zone (Leo is the ex-SAP CEO hence more comfortable with enterprise than consumer businesses. Is that why he dumped WebOS without giving it a fair chance? On similar lines, many pundits are also panning Nokia's Stephen Elop about eloping towards his old company Microsoft when devising Nokia's all important platform strategy)
d) The problem of squeezing a company too dry by going for aggressive cost cutting. HP's old CEO Mark Hurd seems to have done it, putting pressure on the incoming one to deliver results which are tough to replicate.
The articles also bring out some crucial questions about the role of a board. How careful should they be when hiring a CEO, especially from an outside industry. Or, how much should they engage when CEOs talk about large scale changes such as big M&As or spinoffs. I mean, here is the new CEO talking about selling off the main business of the company. Admittedly, HP's PC business is low margin, but hey, this is the global market leader PC brand we are talking about! The world's biggest PC company. Can a CEO shrug it off so easily? Where is the discussion, the debate?
Heavy is the head that wears the crown. That's it from my end for tonight.