Chief Executives and Managing Directors
Determine, formulate and review the general policy program and the overall direction of organisations within the framework established by boards of directors and similar governing bodies.
Your first month at the top
You are the new chief executive of a medium-sized company, and your board expects a plan within the month. You have been in the role for two weeks. The company is doing reasonably, but not well enough, and three different people already want you to make a big decision.
Choose what you would do. Then see what happens. There are often good reasons for each choice.
I would like you to announce a bold new direction at the next staff meeting. The board wants to see decisiveness, and your first impression matters. What are you planning to say on Friday?
Announce a big change to show strength, and sort out the details afterwards
Staff leave the meeting anxious and nobody can answer their questions. A bold announcement without substance sounds like a threat, and the best people start looking elsewhere.
Tell the board you need ninety days of listening before announcing any direction
Gordon accepts it reluctantly, and you gain time. But with no message at all on Friday, staff fill the silence with rumour. A short, honest update on your listening plan would have helped.
Share what you have learned so far, what you are still finding out and when the direction will come
Staff relax because they know what to expect, and the board sees a clear timetable. Decisiveness includes knowing what you do not know yet, and saying so.
We have a choice. We can fund the new product line or fix the old factory equipment, but not both this year. The sales team is pushing hard for the product. The factory manager says the machines are on their last legs. Which way?
Back the new product, since growth will pay for the repairs later and the sales team has a deadline
The product launches well. Then a machine fails in the busiest month, and the factory cannot fill orders. Growth that rests on a shaky base has a way of collapsing.
Have both leaders make their case to each other, then decide and explain why
You hear what neither said alone, choose a staged plan and explain the reasoning to both. Even the person who lost feels the decision was fair, which makes the next one easier.
Split the money evenly between the two projects, so nobody feels they have lost out
Neither project gets enough to succeed. Half a product and half a repair satisfy nobody, and you have spent the money without a result.
I have to be honest with you. Some of us are not sure about the new chief executive. We did things a certain way for a long time. If you want us on side, you need to show you respect what we built here.
Reassure Neil that nothing important will change and that the old ways are safe for now
Neil relaxes, but you have promised something you cannot deliver. When changes do come, he feels betrayed, and the damage lasts longer than the original doubt.
Ask Neil what he thinks is worth keeping and what he would change, then listen
Neil talks for forty minutes and tells you things no report has. He becomes a useful ally, because respect for the past makes people more open to the future.
Tell Neil that change is coming and he will have to adapt like everyone else
It is honest, and the board would approve, but it closes the door. Neil goes quiet, and his twenty years of knowledge stop reaching you.
How it went
At the end of the month, you have a listening plan, a decision about the equipment and a new ally on the floor. A chief executive sets direction and carries the consequences, mostly by asking good questions and choosing carefully. Would you want to be the person people turn to when no easy answer exists?
This is a simplified, fictional situation to help you explore. It is not professional instruction or a test of your ability.
Case study: The factory that wanted to grow too fast
A fictional case set in the executive office of a fictional medium-sized company that makes irrigation equipment for farms.
The situation
Chief executive Adaeze Obi ran Greenfield Irrigation, a family-founded company with a loyal workforce. A large overseas order arrived that would double the factory's output for a year. The board was excited, the sales team was thrilled, and the finance team said the numbers worked. But Adaeze had walked the floor that week and heard that the machines were already running hot, two key staff were thinking of leaving, and quality complaints were creeping up. Saying yes would be the exciting choice. She wasn't sure it was the right one.
What they did
Adaeze did not accept or reject the order at once. She asked her operations and finance leaders for a straight answer on what the factory could really handle. She went back to the customer and offered a smaller first order with room to grow if quality held. She explained her reasoning to the board in plain terms, and brought the factory supervisors into the room so the board heard the concerns first-hand.
How it turned out
The customer agreed to the smaller order and later expanded it. Growth was slower than the board had hoped, and one director was openly unhappy. The factory kept its experienced staff, and quality held. Adaeze said later that the board's frustration was easier to live with than a broken factory would have been.
What would you do?
- Why do you think Adaeze walked the factory floor before deciding?
- Would you be comfortable disappointing a board that wanted a bigger win?
- What do you think a chief executive has to know about every part of the business?