“A business is a living organism. There will always be a point where the environment changes, the competition changes, something critical changes, and you must realize this and take the leading role in meeting change.”
– Edzard Reuter, CEO of automaker Daimler-Benz
There is no lack of schools for businessmen of any kind: accountants, engineers, financiers, technologists, knowledge specialists, advertisers, and, of course, general managers, who have hundreds, if not thousands, of MBA programs to choose from. However, where is the school for the person in charge of getting high-quality effects from all the organization members? There’s no school for CEOs—besides for the school of experience.
Chief executives should learn how to lead a company while working in it, and they must know while each stakeholder is looking.
The CEO’s position is like no other in the business. It is endless. Senior executives are, by definition, ultimately responsible for any decision and action made by each member of the company, even those decisions and activities that they are not informed of.
Regardless of where a company is positioned or what it makes, its CEO has to expand a guiding, overarching philosophy about how he or she will best add value. This philosophy determines the CEO’s technique of leadership.
CEOs do not necessarily follow a leadership style that fits their personalities, but instead, follow a manner that better serves the company’s needs and the business situation at hand. Is the industry rising explosive, or is it mature? How many rivals are there, and how strong are they? Does technology matter, and if so, where does it matter? What are the financial and human assets of the organization? Answers to questions such as these decide which of the following five leadership approaches an effective CEO will take.
1. The Strategy Approach:
The CEOs who use this approach assume that their most important task is to formulate, evaluate, and design the implementation of a long-term strategy, in some cases stretching to a distant future. These CEOs invest nearly 80 percent of their time outside the organization’s operations — customers, competitors, technical innovations, and industry trends — instead of internal problems, such as recruiting and control systems. It follows why they appear to trust employees to whom they can assign the day-to-day activities of their companies and others who possess finely tuned analytical and organizing skills.
2. The Human-Assets Approach:
Compared to the CEOs in the category mentioned above, the Managing Directors firmly agree that strategy development belongs to the business units’ markets. According to these CEOs, their primary role is to convey unique beliefs, habits, and attitudes by closely monitoring individuals’ growth and development. These executives frequently travel, spending most of their time in personnel-related activities such as recruitment, performance reviews, and career mapping.
3. The Expertise Approach:
Executives who lead this strategy agree that the CEO’s most significant duty is to pick and disseminate an area of competence that can be a strategic advantage. Their schedules indicate that much of their time is spent on cultivation-related tasks and on the continuous development of knowledge, such as researching new technological research, evaluating competitors’ goods, and visiting engineers and consumers. They also focus on designing programs, structures, and practices, such as promotion policies and preparation plans, which reward those who gain experience and share it across the boundaries of business units and functions.
4. The Box Approach:
In this group, CEOs assume that they can contribute the most to their companies by developing, communicating, and tracking a definitive collection of controls – financial, cultural, or both – that maintain reliable, predictable actions and experience for clients and employees. The CEOs who use this strategy claim that the quality of their businesses relies on the ability to provide clients with reliable and risk-free experience. Consequently, these executives spend their days attending exceptions to their companies’ controls, such as financial reports that are beyond projections or a proposal that meets its deadline.
5. The Change Approach:
Executives in this group are motivated by the assumption that the CEO’s most important task is to establish an atmosphere of constant restructuring. Even though such an atmosphere creates anxiety and confusion, it contributes to specific strategic errors and temporarily impairs financial results. Unlike CEOs who use the policy approach, these CEOs focus not on a single point of arrival for their organizations, but on the method of getting there. They spend their days in the market, meeting with a wide variety of clients, from consumers to investors to suppliers to staff at nearly all company levels.
The five approaches discussed emerge from the Harvard Business Review research and are the five ways many CEOs pick out to deliver clarity, consistency, and dedication.
Regardless of the approach, then the CEO’s position is to act decisively and boldly—a call for high-level leadership taught simplest through on-the-job training.
Whatever strategy, the task of the CEO is to behave confidently and boldly — a demand for high-level leadership that is learned only by on-the-job preparation.
Approaches that have resulted from our analysis are not standard corporate success techniques, nor are they rigid roles in which all CEOs should be depicted. The sector is too complex to carry out such a simple analysis. But the five methods provide a framework for understanding how CEOs continue to add order and sense to their relentless practice, learning to lead as they go.