Four essentials for a successful CEO- Part I of II
By: Stanislav Shekshnia, Kirill Kravchenko and Elin Williams, INSEAD Business School
We often hear that running a large company is one of the most complex jobs in the world. Business schools, strategic consultancies, headhunting firms, training providers, and executive coaches, all have a tendency to mystify the work of the CEO.
However, effective CEOs see their jobs in much simpler terms and consider this simplification an important element of their effectiveness.
That was one of the surprising findings of a research project we undertook over the last five years.
In order to understand how the CEOs themselves see their work and which factors make them successful, we interviewed a carefully assembled selection of truly international CEOs from the world’s twenty biggest economies (other findings are reported in our book CEO School: Insights From 20 Global Business Leaders).
Respondents emphasized four essential roles of a CEO: envisioning; nominating; enabling and managing crisis.
This article, part I, is about envisioning.
“The ability to define an accurate vision is very important,” says Jean Sentenac of Axens (France).
For Abdel F. Badwi, formerly of Bankers Petroleum (Canada), the “role of the CEO is mainly about vision”.
Contrary to the widespread view of a corporate vision as a picture of the future set in stone, our CEOs consider vision a work in progress.
Fine-tuning and updating the vision is a never-ending process of unraveling a paradox.
It entails a number of elements:
-First, good vision is always crystal clear, yet it is also evolving along with the company and the macro- and micro-environment in which it operates. As Diego Bolzonello, formerly of Geox (Italy) says, “Direction is made by a long-term vision…and you modify it continuously. Because in this environment you need to understand what is happening all around the world.”
-Second, good vision is grounded in rational evaluation of the market and business potentials, yet it must also be inspirational and emotional. Renato Bertani of Barra Energia (Brazil) explains: “It’s not about sending orders out; it’s really about making people believe you know the right way and providing the right vision.”
-Third, good vision provides direction and establishes fundamental working principles, yet it leaves plenty of room for creative expression from every individual. As Lee Chul Kyoon of Daelim (South Korea) says, “Once a system is set up, it will function. But if we don’t all share the same future perspective, it won’t work. The CEO provides that.”
A CEO’s story
We would like to illustrate how dynamic envisioning works with the story of a CEO – let’s call him Alex – with whom we have worked closely for many years. Alex was a management consultant when the founders of a privately owned conglomerate offered him a senior executive role. After a series of acquisitions, they decided to create a stand-alone energy company and Alex was the natural choice for CEO.
The young CEO’s brief was simple: Turn this collection of assets into a business, without any extra capital. But Alex was more ambitious than that. His vision was to create the country’s best-run company in terms of performance, systems, management, talent, and reputation… within five years. He wanted the business to be an employer of choice, a supplier of choice and (given his brief from the owners) a borrower of choice. He shared all this with the organization.
On a more personal level, his ambition was to prove himself as a CEO and make his family feel proud of him. The company’s HQ was in the region he came from, not the nation’s capital. He wanted to build his hometown’s economy and also to prove that it could be home to a great company and attract leading executives of top international caliber.
In his first year, attracting top executives is exactly what he set about doing. At the same time, he put in place a transparent system of reporting and improved the performance of the company’s various components by reducing waste and cutting costs. Eventually, it resulted in various encouraging outcomes.
To know more about Alex’s 2nd to 5th years into his task, please read part II.