Category: The 7 Principles of CEO Management

Reading @AndreaFelsted‘s piece yesterday in the Financial Times about Tesco one year in to Dave Lewis’ tenure as CEO, I was reminded of the piece I wrote on the importance of management in turning around the former UK retail heavyweight’s fortunes.

It is clear that Mr Lewis has failed to manage.  He destroyed the contract of trust by cutting thousands of head office jobs.

A CEO who cuts employees is an abject failure – his/her strategy did not work & employees pay the cost. Mr Lewis inherited this mess, so conveniently he can sidestep the strategy issue, but the fundamental problem remains: that he further strained the contract of trust while negotiating his compensation package.

Why would Tesco expect anything else from their employees but distrust, disconnection, cynicism and low morale?

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One of the highlights of Management Today’s coverage of its #MTLive event recently was hearing from Andy Street, CEO of UK retailer John Lewis Partnership.  Street is, by the publication’s measure, Britain’s most admired business leader.

Reading his comments and, subsequently, a series of articles written about him it’s not hard to understand why he is most admired. But he is, first and foremost, a Manager not a Leader.

In one Management Today piece Street attributes his success to strength of the business model he inherited; a business model created by the founders son in 1929 and adhered to ever since. Street is the steward of this model.  He is accountable for creating and executing a plan that allows the company to prosper.  And, prosper it has.  While many UK retailers have struggled in difficult trading conditions and increased competition from low-price retailers John Lewis’ premium business has weathered the storm better than any other.

How has it done this? Andy Street says he thinks it is in large part down to the culture of the organization. “People trust organizations because of a sort of total peace around the organization. So we want to be perceived as an organization that’s a good employer and has a fair approach to pay, for example”, he told the publication.

John Lewis are renowned for their staff’s morale and engagement. This requires clarity – everybody must know what they are accountable for. This requires direct, truthful, conversations; sometimes difficult ones. This also requires transparency. But, most importantly, it requires management.  Most companies struggle to create a culture where employees are engaged and inspired.  The most common cause is not a lack of a leader – somebody pointing the way – but the lack of a Manager.

The Partnership in the John Lewis name means that all employees share in the profits. You might think that having partners might make direct truthful conversations about corporate and individual performance – and applying consequences – in a transparent way difficult. But, says Street in his #MTlive interview, it makes them easier.  Management and employees at John Lewis are able to have direct truthful conversation that are accepted and understood by all – and this produces significant competitive advantage in innovation, customer engagement and strategy execution.

Creating and maintaining this culture doesn’t happen by accident: it starts at the top – with the CEO and senior management team. Creating it is easy; maintaining it is incredibly difficult. It requires continual management.

I believe Andy Street should be recognized as Britain’s Best Manager – a far greater accolade in my book than the one already bestowed on him. He doesn’t just point the direction, he manages the organization to ensure it achieves its goals for the benefit of every single employee.  I call it CEO management.

Obvious as it may sound CEO’s must create a strategy that frames the work of the organization and provides context for all the work of managers and employees.

We often find that the company strategy is not uniformly understood or accepted by the executive team. This disconnect prevents significant numbers of employees from understanding and committing to the strategy.

In How Dare You Manage you will learn:

  • Why strategy is the cornerstone of everything a CEO does
  • The opportunity provided by a clear Vision and Missions statement
  • The requirement of an executive team that can create and support the thinking required to build a company strategy and then unpack it, explain it and manage their employees to get the work done

Clear structure is essential for company success.   What structure do you advocate?

You have to stand for something as a CEO and structure combines your choice of philosophy and framework and defines how you want to organize the work of your company.  Your employees need to know this and trust in your intentions.  Without this understanding and trust your employees cannot do their best work.

In How Dare you Manage you will learn:

  • How to choose a philosophy and framework
  • Learn how to create a clear functional structure
  • That this is your work, not HR’s
  • Understand how structure can drive highly productive behaviour

Part of your management work as the CEO is to determine the required number of levels of work in your organization to effectively implement your strategy.  Too many levels causes bureaucracy and limited thinking.  They can choke the life out of an organization because employees do not have the space to feel empowered or the adequate use of discretion to get their work done.

If you determine you have too many levels in your organization have the courage to address it and reduce them. It is an uncomfortable conversation, but it will release energy and creativity into your organization and  your  employees will thank you for doing so.  Their roles will be meatier and more challenging, allowing them to grow and learn.

In How Dare You Manage you will learn:

  • How to create the optimal number of levels in your organization
  • How to recognise  and the damage it does
  • What thinking and work should be done at each level
  • How this leads to clarity of expectations and understanding with your employees
  • Why employees want to come to work!

Imagine the effect of 700 employees coming to work unclear on their accountabilities!  If they are unclear they will spin and churn.  For your organization to work effectively you must ensure that each of your employees role and accountabilities are clearly defined.  It is unfair to try and measure an employees work performance when they are unclear of what is expected of them.  You need to define the work of your organization!

In How Dare You Manage you will learn:

  • What your employees need to know to enable them to perform effectively
  • How to define a role
  • What should and should not be delegated
  • How to empower employees
  • That defining work of your organization is iterative and never ceases as management work for your the CEO

In order to fulfill its visions and mission much of the work in companies moves sideways across functions or departments to create the required value for the customer.  You have to ensure the work of your different functions is integrated so employees can successfully do their work.

When working with a peer in a different department, employees sometimes need discretion and authority to provide a requested service or receive a service from a designated peer in another function. As CEO it is your management accountability to ensure the authorities are in place so they can have it to ensure your employees work effectively between the different functions in your company.

In How Dare You Manage you will learn:

  • How to clarify role relationships
  • What is required to manage the key lateral relationships of your company
  • How to identify and manage the key cross functional processes in your company that deliver key aspects of your strategy
  • How to determine what types of authority you can delegate
  • What are the specific consequences of failing to manage lateral relationships