Business Exposed82
Dutch top managers and was curious about whether the same
might be true for these guys (yes, all of them guys . . .). And you
know what, after a good chunk of statistical analysis on a rainy
afternoon, it appeared that Dutch top managers also leave when
their rm’s performance is at a high. Yet, they’re not walking at
all when it’s low?! Apparently, Dutch top managers don’t easily
get the sack even if their rms are underperforming.
Interestingly, though, these top managers not only left when
their rm’s performance was relatively high, but when it was
also just starting to (rapidly) decline. With their image intact,
and their successor in place, they left before the slide. I guess it is
all about picking your moment; what better time to get out than
when you’re just “over the hill”, and your house of cards may be
about to come tumbling down.
Chief story-teller
The question remains, what do CEOs really do? Because, although
their impact might sometimes be overrated (for better and for
worse), they certainly have some inuence. What is the role of
a CEO?
Stevie Spring, CEO of Future plc (a UK magazine publisher),
recently expressed it to me in the following way: “I am not really
the Chief Executive; I am the Chief Story-Teller.” What (on earth)
did she mean by that?
Let’s rst think, what is an organization? Well, it is a group of
people – sometimes a rather large group of people – (supposedly)
working towards a common goal. This goal may simply be prot,
but it certainly helps if we have a common idea of what we’re
trying to do in order to make a prot.
Hence, it is about setting a clear strategic
direction. A clear strategic direction is
not a 40-page document outlining a
rm’s strategy – that’s a drawer-ller. It is
a concise set of choices that determines
what we do and don’t do. For example,
‘‘
A clear strategic
direction is a concise
set of choices that
determines what we do
and don’t do.
’’
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Gods and villains
for Future it’s something like “special interest, English-language
magazines for young males, possibly with spill-overs online
and in terms of events”. Hence, they would for instance do a
magazine on “guitar rock” but not on “music” (as that is not
focused enough to be considered a special interest); they would
do such a magazine in the US but not in German (then they
might license it); they would cover motorcycle racing, or Xbox
or wind-surng, but not knitting (unless, without me realizing it,
knitting has recently had a popularity surge in the community
of 20-something males). Thus, it determines what you do, but
it also determines what you don’t do, because it doesn’t t your
expertise and capabilities.
And Stevie Spring tells that story – over and over again – to a
variety of constituents: to analysts and fund managers, board
of directors, employees, customers, and even the occasional
business-school professor.
Good CEOs have a story. Tony Cohen of Fremantle Media says
they want television productions to which they own the rights,
with spin-offs in other areas (e.g., online), which are replicable
in different countries – simple and focused. Alistair Spalding of
London’s Sadler’s Wells theater wants to be actively involved in
producing a broad array of cutting-edge modern dance, aimed at
a London audience. Frank Martin of Hornby wants to produce
near-perfect scale models of model trains (and Scalextric race
tracks) for collectors and hobbyists, which appeal to some
feeling of nostalgia. Their stories are clear and simple; employees,
investors, and customers alike can understand and believe in
them.
Is being able to tell a convincing story enough for a good strategy?
I don’t think so. I remember a Goldman Sachs analyst writing
about Enron in October 2001 (weeks before its bankruptcy),
“Enron is still the best of the best. We recently spoke with most
of its top management; our condence level is high.”
However, a convincing story certainly helps. When you have
a lousy strategy, without much focus or logic to it, it is hard to
come up with a coherent and convincing story. And it’s a good
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