In The American CEO, Peter F. Drucker outlines the uniqueness of the CEO position, which he writes is an American creation. He cites the American president as the first chief executive officer (CEO) ever established and credits Alexander Hamilton with writing the part of the U.S. Constitution that defines the U.S. president. Hamilton went on to found and run the Bank of New York and The First Bank of The United States holding a chief executive-type position. Article Two of the Constitution establishes the executive branch of The United States and describes the following executive powers:
- Command the armed forces
- Ask for the written opinions of cabinet secretaries
- Convene or adjourn Congress
- Grant pardons
- Make treaties with the advice and consent of the Senate
- Appoint judges, ambassadors, etc. with the advice and consent of the Senate
Like the executive powers above, Drucker describes the CEO role as primarily focused outside the organization: “In any organization, regardless of its mission, the CEO is the link between the Inside, i.e., ‘the organization,’ and the Outside – society, the economy, technology, markets, customers, the media, public opinion. Inside, there are only costs.”
Almost as important as the external focus is that the CEO is the link between the inside and the outside. Comparing Drucker’s definition with the executive powers in the Constitution does reinforce the external nature of the chief executive role. In the Constitution, there is no focus on managing the executive branch and all of the powers described are external to the executive branch and require an “outside” focus. There is little doubt that this is one of the reasons the U.S. federal government has continued to grow unchecked by constitutional requirement. The U.S. president is focused on the outside and there is no one looking at the costs on the inside.
Drucker goes on to describe the CEO’s tasks. They begin with a CEO needing to answer three questions to help define the outside of the organization:
- What is our business?
- What should it be?
- What should it not be?
Drucker presents these questions as the foundation for the specific work of a CEO. Notice they are all “outside” questions. The specific work is to:
- Decide what results are meaningful for the organization
- Decide what information is meaningful for the business and for themselves
- Decide the priorities
- Place people into key positions.
This will look very familiar to those who are experienced in the Brooks International methods. Our methodology links the strategic imperatives to the people in the organization who “determine the performance capacity of the institution.”
We do this by working with the CEO to define his or her strategic objectives and develop consensus within the leadership team on priorities and how they need to work together to achieve the objectives. We work with CEOs to clarify what results are meaningful and get their people aligned. Clearly, our goal alignment methodology is about setting and communicating priorities. This method also draws on our ability to determine and develop the required meaningful information. In determining this, each of our client engagements includes obtaining or developing the information required to measure performance of organizational entities and individuals. This includes “outside” information. Drucker believed that this is a significant weakness for most organizations. They have not put enough effort into developing outside information.
Our methods of developing market opportunity assessments, identifying prospective customers, competitor analyses and evaluating customer satisfaction are all examples of our competency in developing outside information. Of course, we also develop inside information, because the organization as a whole does need to manage costs.
Drucker believed that the hardest work for CEOs is making people decisions. Putting people in roles based on their strengths as opposed to “an absence of weakness” is required for an organization to perform at its highest level.
The Brooks International methodology of clarifying roles through the creation of position profiles, expert models and best practices, makes it possible to make better decisions about the right people for roles. Through our on-site leadership and commitment to the client mission, we also show client leaders they have strengths they did not realize they had. This is what we call delivering the client’s people.
The chief executive role is, by design, an outwardly focused role. Brooks International recognizes this and works with CEOs within this context to consistently deliver improved, predictable business performance, linking financial and operational models and dramatically enhancing execution methods, competencies and capabilities of our clients’ organizations.