SETTING DIRECTION AT THE TOP

As we've discussed, the steps to setting a clear direction are equally applicable at every level of the organization. Unfortunately, in many companies senior leadership does not take full advantage of the team approach to setting a clear direction. Let's take a look at why this is, and how the process in many organizations could be improved.

If you look at a company's senior management team, in addition to the CEO, there are business unit leaders as well as functional executives. Let's assume for this discussion that the CEO has ten senior managers on his team: five business unit leaders and five functional executives. Each of these ten people, however, focuses almost exclusively on his or her particular function or business unit. The CFO spends most of her time on finance issues, and the general counsel is focused primarily on legal matters. The same goes for the head of HR, the chief information officer (CIO), and the president of each of the business units.

Even though this may be a terrific team, in this model the only person with a holistic, global perspective of the organization is the CEO; everyone else is focused almost exclusively on his or her silo. If you were to map out how this team operates, it would resemble a hub-and-spoke with the CEO at the center, and the head of each business unit and function branching out in a specific direction. No matter how efficient this structure may appear to be, the CEO is not able to take full advantage of having a team that works with him to set a clear direction for the organization.

There is another model that can be much more effective. Instead of being consumed with only his or her own area of responsibility, each of those five business leaders and five functional executives is also expected to take a much broader view of the entire organization. Half of each executive's time is spent in his or her particular function or area, and the other half is spent in a leadership role with the CEO working on the total of the organization. For example, the head of manufacturing is focused on his functional area as well as issues and opportunities that impact the entire organization. The same goes for the CFO, who not only analyzes finance issues but also focuses on the entire enterprise. In other words, each of the senior team members wears two hats. These team members look beyond their specific areas of responsibility to consider how a particular function or business unit interacts with every other business in the company.

Using this model, let's say that you are the CEO. When you meet with your team, you tell them that the company is looking at an acquisition opportunity. As discussion ensues, you don't expect the general counsel to limit his views to due diligence and closing the transaction. Instead, you expect him to have opinions about whether this business makes sense for the entire organization, what the people implications may be, and what integration issues should be addressed up front. The same goes for the CFO, whose feedback won't be just about finance; she will voice her opinions regarding the overall strategy and the specific opportunity. As the CEO, you do not see yourself as the only one who is running the company. Instead, you have a team of ten senior executives who spend a significant portion of their time working with you to set a clear direction for the entire company.

The team approach to setting direction is infectious. Silos and barriers are broken down, and perceptions change. Not only do the business unit leaders and functional executives relate better to the CEO; they also interact with each other more freely. Let's take the CIO, for example. All too often the CIO is seen as someone who speaks a language all his own as he dwells in the world of information technology. People respect what he does, but his realm is seen as separate from the rest of the company. When the entire executive team grasps the overall global perspective, however, the CIO is like every other senior executive with responsibilities to work with the CEO to lead the company. The CIO attends strategic planning sessions and operations reviews. He understands not only the company's IT issues, which are his area of expertise, but also what the company is trying to do strategically and operationally, and how the IT strategy fits into the overall company strategy. In addition, he can now lead his IT team much more effectively. Instead of operating as a silo, the IT group becomes an integral part of the entire company.

The result is a shift in how people see themselves. Instead of being, for example, the chief marketing officer, who focuses exclusively on marketing, she is a senior leader of the company who, among other things, happens to know a lot about marketing. It really makes a significant difference in how the person views her role. She stands ready at every meeting to offer expert opinions on marketing issues, but her contribution to the team does not end there. The chief marketing officer sees herself as being one of ten people at the table with the CEO, each of whom is capable of playing a significant role in running the company and setting a clear direction. The varied backgrounds and multiple perspectives help them arrive at a much better direction.

Some leaders do not like this “two-hat” approach. Perhaps because of a lack of self-confidence, they view it as having to share their power. They also may be concerned that this approach will slow down decision making. Or they may worry that the team could decide to go in a direction different than the one they as the leader want to go. Remember, however, that as the leader, whether you're the CEO or the head of a small team, you are the one who makes the final decision as to what the direction will be. But for you to do that effectively, everyone's input is critical.

Setting a clear direction brings out the best in values-based organizations. When all people understand their tasks and responsibilities and, equally important, the rationale behind these assignments, they become engaged and empowered. Teams at every level want to do the right thing and make a difference. The game changes. Senior leaders do not call the plays by themselves. They rely on a strong, values-focused team, and together they execute against a clear direction to achieve their goals and objectives.