CEOs. Centre of a Network rather than Top of a Hierarchy?
What's the role of a CEO these days? Has it changed over time? The RemCo Chair at Rexam Pl, and the former COO of Smith & Nephew, Ros Rivaz addresses the skills needed to be a great strategic leader in today’s world, illuminating the various challenges and opportunities for modern businesses. With extensive experience working with blue chip companies at a senior executive level, Ros draws clear and memorable examples from the manufacturing industry, supply chain, logistics and retail sectors.
What a difference a decade or two makes! With the rise of the internet giants and the ability for everyone to access data, the person at the top of the organisation no longer has the unique experience of having the most information or the clearest insights and implications, and is no longer necessarily the best placed to make all of the decisions.
Quite a change! Whether you see this as a threat or an opportunity depends on who you are and what you decide to do about it.
On the one hand, you could say that this is the natural evolution of the environment in which we now live and work. As always, commerce is driven by healthy competition where those that don’t adapt lose out.
Or, you could look deeper and notice that those businesses that break the mould are led by people who operate in a very different way to those gone before.
Strategy leadership. The CEO doesn't always have the best view these days
Centre of a network, rather than top of a hierarchy
Let’s look at the model of leadership that we know and love. The one where the boss is primarily a line manager, developing the strategy, setting their resources in place to execute, deciding what needs to be done and managing the team to deliver the task. This mechanism, when it works well, establishes a cascade of actions and metrics from top to bottom. It ensures that everyone is aligned to the task at hand and towards achieving the stated strategy. Job done…or a missed opportunity?
This system, by its very nature, does not typically encourage and support a flow of ideas upwards. Is it right to assume that the person/people at top of the organisation know the best way to achieve the strategy? Are there others in the organisation who are able to and want to contribute more? The traditional hierarchy can dilute any innovation as each successive manager claims a piece of the pie.
The consequence is two-fold:
- The pressure to ensure that the company adapts to changing times and new competition remains with a small group of people at the top who are often distant from the customer.
- The speed of decision-making is slow, potentially to a point that is challenging for the business vs. the competition, as well as for today’s employees and their expectations.
Interestingly, as all of the employees now have access to the same data, and develop insights and implications, they can see what needs to be done.
So does the traditional CEO’s role need to evolve to something different? I would argue so, and the business benefits are huge.
The New Leader
The new CEO needs to be the ‘centre of a network’.
What does that mean?
It means that he or she needs to be in the best place to understand the environment in which the business operates. They need to understand their customers first hand; they need to know their employees throughout the (inevitably flatter) organisation.
Being in the lead by being at the centre?
He or she needs to be extremely well networked externally, and to see and feel the changes around him. Is the competitor still selling a product or service, or have they started to develop a platform, such as Amazon or Uber, which might become the link with its customers…and perhaps with your customers, reducing your interactions with your most important stakeholder? Has their relationship with suppliers become one of collaboration, co-invention and mutual innovation, perhaps including exclusive relationships? In summary, is a wide, vibrant, evolving network in place and is he or she at the centre?
The CEO, more than ever before, needs to be an inspiration; he or she needs to be a communicator; they need to help their employees experience the company and strategy, ensuring the company’s intent is fundamentally understood and admired. Employees need to feel the ethos of the company. By doing so, all of their energy and effort will be channelled towards making the company greater. Their insights can be used to progress the strategic implementation faster and more effectively.
Being in the lead by being at the centre is a good place to be.
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