As they say, the only constant is change. This year change has been ongoing at break neck speed. The truth is, that as things are developing fast, the archetype of the omnipotent CEO — the lone commander at top of the corporate pyramid — is increasingly becoming a relic of 20th century management thinking. There are some notable exceptions, like business founders like Jeff Bezos, Elon Musk and Mark Zuckerberg.
However, all the research being done at the moment is indicating that for most mere mortals, it’s simply too hard to go it alone. The modern business landscape is too fast-moving and the demands on a CEO have become too innumerable for a single person to set an organisation’s strategic direction and oversee a multitude of internal decisions, while also dealing with all stakeholders.
At the same time and now more than ever, the expectations of modern leadership have evolved. Organisations need to be more agile, less hierarchical and must adapt quickly to the sudden dislocations we have today. This also means that today we are viewing what were until recently considered as non-traditional soft skills as more essential to leadership. Hence skills related to empathy, selflessness, collaboration, expressiveness, flexibility and patience are more essential and important than a single leader with independence, aggressiveness, decisiveness and controlling.
Let me be clear, this is not the case of either/or but about having all of the above. Some organisations may be super fortunate and find that unique individual who is both right- and left- brained, who is both decisive and collaborative, to mention an example. They are the so called unicorns.
For all the remaining organisations, the better alternative is to have their CEO or MD accompanied by a team of executives who complements the CEO and most importantly shares in the accountability, authority and role of the CEO. This structure also creates room for growth in the C-suite, helping combat the kind of corporate brain-drain that inevitably accompanies a change in CEOs. But none of this is to say that simply placing a strong executive team is a magical panacea that will solve all problems or automatically lead to business success. Like anything in life it requires a great deal of work. However such a setup should ensure that companies are led rather than just managed.
Let me forward some pointers, which are coming out from the latest research of how this could work out:-
- Pick the right people. Executives need to share the commitment to the business like the CEO with a common vision, clear communication and most important deep trust. This sustains the relationships when inevitably, there is a disagreement.
- Set expectations. Critics of this structure argue that shared accountability amounts to no accountability at all — if many are in charge, no one is. But properly managed, the opposite is true. The idea of joint accountability means setting performance standards that put each executive in the position of having to live up to the other. Ideally, this creates a healthy competition.
- Define roles and responsibilities. The organisation must understand who is in charge of which aspects of the company and where decision-making authority lies. This is liberating in that it takes some daily responsibilities off the plate of just one CEO. Clearly delineating areas of responsibility also mitigates another common criticism — that such a structure creates a bottleneck. In fact, the structure often facilitates a quicker response because the assigned executive that has authority to make a decision on a certain area, is likely to be able to do based on a great depth of experience and knowledge. No CEO can be an expert on everything.
- Distribute authority but not responsibility. While each executive would have individual duties, the CEO and executive team must fundamentally remain a leadership unit, one in which successes and setbacks alike are owned together. These successes and setbacks should be reflected in short- and long-term compensation. They must be prepared to be rewarded or penalised as a unit and accept the consequences. With the right chemistry and trust, it should serve as an incentive both for a healthy competition but also having each other’s back. Another benefit of this conjoined career planning is that it can both temporary or long term.
Let’s be honest, the modern CEO is often overwhelmed by unrealistic demands. Business pyramids are stifling innovation, while a division of authority can unleash it. In unprecedented times like these, more companies should rethink their structures and embrace a share leadership approach, putting their leaders in a position to succeed.
At EMCS we specialise in helping companies fine-tune and adapt their organisational structures, based on an in-depth and independent internal review. Feel free to contact me on firstname.lastname@example.org to have a chat.