You can smell the fresh paint as companies the world over complete their post-recession overhauls. Few business organizations, functions, and processes have escaped this rethink, which is meant to fortify organizations before the next downturn comes.
At the risk of stirring a hornet’s nest, I’d like to ask one question: How many of us CEOs included, as part of the rethink, changes to the CEO’s role and responsibilities?
In the manufacturing era, the control zone — which comprises the CEO and senior executives who set corporate strategy, policies, and quality control processes — added the most value to the business. However, value-creation has now shifted, from the control zone to the bottom of the organizational pyramid. At a time of virtually limitless competition between finely differentiated products, what you sell has become less important than how you do so.
The value zone has naturally shifted to the frontier where front-line employees and the customer interact. That has made existing organizational structures outmoded.
What then is the role of the new CEO? Is it to personally add the most value to the business? Or is it to enable those at the heart of this new value zone? If, as I believe, the latter is the case, we need to rethink our leadership styles and adopt one that is aligned better with current realities.
The CEO’s new role, I’m convinced, is to help employees see themselves as empowered leaders — as those who influence and drive change. The new CEO can’t play chieftain; he must be a team player obsessed with enabling value, someone who is willing to collaborate. Someone able to discover new grass roots leaders and nurture them.
Gone are the days when the CEO’s role was to lead from the front or direct the march forward. Granted, you can’t escape the hype that surrounds a leader. But the onus is on us to find the balance between hype and responsibility; between leading with the power of position and that of ideas; between being the external voice of the company and being the value zone’s voice within the organization.
The time has come for chief executive officers to transform themselves into chief enabling officers who enable, encourage, and enthuse employees that are toiling in the value zone.
Would you agree?
Originally posted on Vineet Nayar’s Blog site on Harvard Business Review.com
http://blogs.hbr.org/hbr/nayar/2010/07/who-is-the-new-ceo.html
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I could not agree more with your definition of the “new” CEO. I’ve seen two types of CEOs — the control-oriented, hierarchical manager, producing meager results and unable to motivate the organization at large to achieve breakthroughs and to respond rapidly to the unpredictable, ambiguous world in which companies are competing today … unable to attract/retain great talent — and also, the empowering leader, who has the courage of his/her convictions around a vision and direction for the firm, the confidence to unleash the energy of high-potential self-starters who need room and minimal bureaucracy to accomplish great things and achieve amazing results. Clearly the latter will be the winner in the new world.
Vineet,
Are you confusing the managers we have had for years with leaders who we have been lacking. You seem to be using the terms interchangeably when there is a difference. You are calling for leaders as the new reality and I agree. A leaders role is to engage with the people at all levels and to listen to their needs and make it happen. A leader knows that their success is based on the success of those they lead. This isn’t a new concept it is just one that has been overlooked for too long.
You lead people you manage a process. For too long the focus has been on process not leadership.
Thank you for the great post and continue to educate the masses.
Joseph
I believe it will not be possible to change role of CEO immediately in India. There is a need of mix of CEO, ECFS management style, strategy of enabling second layer and then step by step percolating it to bottom of pyramid.
“The CEO’s new role, I’m convinced, is to help employees see themselves as empowered leaders — as those who influence and drive change”.
I would call it as the greatest democratic thought in corporate world.
There are many such CEOs in India and hope more will experiment this
Corporate greed and feathering their own nests comes to mind. The role of CEO´s in the present is so short lived, that it only benefits them personally and not the company in the long term and most certainlyNOT the employees, who have probably survived many recessions and structural changes over time and will see yet another CEO replaced by similiar greed. It is so refreshing to see such radical thinking taking place. Radical perhaps, but finally some sense!
I would agree and ask, what new tools and new infrastructure will be needed to provide the new CEO with the ability to transform him/her to being an enabler and team player? I believe the CEO would need real time information on what his employees are doing at any given time and what value is being created for the enterprise, for the customer and for the other stake holders. The new infrastructure should show at the same time, the opportunity costs of tasks being ignored or left in the back burner. It looks like HCL will have to help build such tools to implement this vision become a reality.
Dear Mr. Nayar,
I can’t agree more with your article at HBR: Who is the new CEO?
The funny thing is, I wrote a similar article in a German blog about the cultural change we are facing headlining Stephen Covey: “The aged industrial top-down hierarchical command and control model is past. We currently create a culture where competency is spread everywhere, and where people, even at the bottom, are involved significantly in key business decisions.” Some days later, I thought, I should write something similar that headlines CEOs, since it is easier to attract people. And immediately I found your article in my Inbox (via HBR RSS feed).
So I felt quite connected to you.
The question that comes up after reading your article is: How can we shape this cultural shift we are in?
First of all, I think, we need to become aware and discuss it. This won’t be easy, since a lot of people with established power will fear the loss of their future perspective. But I’m sure this shift will demand less managers in a sense of curators but more leaders and engaged innovators.
Second I think, we should consistently engage all managers and employees to strive towards new habits, skills and competences that the future will demand. But what are these skills, …? Here internal and external role-models can help us to agree on value competencies, habits and skills that are of specific value. Scharmer’s approach (MIT Boston) of Presencing / Theory U might help us become aware of these skills even within us –being very specific on the context we are in. But other approaches might be helpful as well.
Third, knowing role-models and those habits, values, or competencies, we should start to spread these good seeds. People need to learn from each other in daily life, within challenging situations – exactly when the corresponding new behavior makes the difference. To develop new learning approaches like pairing, group learning etc. and to make them available step by step to more and more managers and employees will help not only the organization to grow but also their social networks around them. New role-models will appear.
Finally, as executive management, for sure we like to understand if our investments are well done. Professional Competency Management/360, Succession and Talent Management will provide classical managerial tooling to plan, track and measure in order to become effective in these areas. Multiplying and placing the new role models within your organization will change your culture fundamentally. It will strengthen the company.
Coming back to your article: “The CEO’s new role, I’m convinced, is to help employees see themselves as empowered leaders — as those who influence and drive change.” Absolutely! The reason – why we have to do so – is the complexity of our world, the interdependence of solutions, products and processes. This leads to manifold interactions across organizational borders that can’t be managed by hierarchical, functional structures. The resulting unmanaged but self-organized networks become more and more business critical. And here for me Stephen Covey comes in: To foster the right skills and competencies across the organization, to enable the new role-models and thus to push those self-organizing networks is for me the key answer to master current and future complexity as well as to navigate successful through our cultural shift.
Best regards,
Dr. Mike Heuchling
Dear Vineet,
It is wonderful to read your Book-“Employee First, Customers Second”. It was nostalgia at its best for somebody like me as you were our role model during the HCL days. Congratulations on a great book Vineet.
I remember when I had joined HCL Technologies in 1986 and you were the mentor for the entire batch. I still remember the training from you in Surajkund. We all admired your enthusiasm and zest for life with the huge dosage of simplicity. God bless you my friend.
Its been a long long time since we have last met.While meeting with my two clients yesterday who are CEO’s I was excited as both had your book on their table and it really made me feel proud.
After HCL,I worked with Citibank and Bank of America. Since 1997 , I started my training firm called The Redwood Edge based out of Pune. In this journey of training, you will be glad to know that I have done around 1800 sessions for over 80,000 particpants globally and in India.
Wishing you more success and rest assured I would be quoting your book in my future Leadership workshops.
Look forward to meeting you soon and let me be your host next time you are in Pune.
Bet Regards,
Prakash Rohera