Category: How Dare You Manage

A CEO is accountable for all the behaviour and results of their company.  Today VW CEO Martin Winterkorn admitted that the company he is the chief executive of had mislead both regulators and customers. How is it possible for a global company fraudulently installing software in their cars to deceive their customers and regulators without the knowledge of the CEO?  This scam, due to its scope and scale, had to have the ear of senior management.

Volkswagen wants to be the largest automaker in the world, but how dare they have this aspiration when they get caught in such a sophisticated scam that is so stunningly deceitful. A company has an accountability to serve the communities it works and sells in.  It must demonstrate responsibility and care to this community.   When it breaks this bond of trust it loses it right to serve these communities.

Today VW launched a mea culpa PR initiative in the US.  The strategy being if you say sorry your customers will forgive you.   I believe this goes deeper….the company is sick and there must be consequences for this failure.  Winterkorn has, it is reported, refused to quit.  If the board is serious about ensuring this never happens again it needs to fire him when it meets later today.  Only then can they start a process to eradicate a culture, led by their CEO, that produced such duplicitous behaviour.

If they do not nothing will change.  How dare they fail to hold Winterkorn accountable for this scandal.

The two words leadership and management are probably the most ambiguous words in the lexicon of the business world. I believe defining these two words are at the heart of the meaning of the work, and success, of a chief executive officer.

As a CEO or senior executive you have to choose your words carefully. It is your job to effectively “launch a thousand ships” and, in doing so, know when to lead and when to manage. I often ask my clients to define the meaning of Leadership and Management.  The answers are hardly ever consistent. And my clients have strong differing views!  These need to be debated in order to establish a collective understanding and agreement of “how we will manage our company”.

My definition of leadership is about pointing the way; whereas management is how you get to your destination.  To use a football analogy, leadership is getting the team fired up before kick-off. Management is selecting the plays and getting the players to execute them in order to move the chains down the field 10 yards at a time. It requires everybody to understand what is being communicated.

The rules of language apply to all levels of management.  As a chief executive you need  choose a philosophy of management, a language, principles, processes, and structure.  You must then practice them for the rest of your professional career, developing an expertise and an ability to lead and manage in a deeply effective way.

I call this the Craft of CEO Management.

CEO Management is the lifelong pursuit of mastery in an executive’s chosen profession.  Part of achieving excellence in any profession is the requirement to be precise in the meaning of the language of the profession so that everybody understands what is being said.  The profession of management is profoundly poor at this.  It is beset with jargon, there is no universal agreement on the definition and collective meaning of words or language, and is laxly applied.  The existing vocabulary is continually being undermined by jargon.

We’ve all seen what happens when this happens on the football field – when team members misunderstand what the play call is or what route they are running!

CEO Management requires you to design and manage your company environment to maximize your employees’ understanding of their work,  their effectiveness and efficiency. This framework enables them to do their best work. The larger the group of employees, the greater the payback is for doing this. However, the larger the number of employees, the larger the risk of failure if there a clear framework does not exist.

Make the way you choose to manage uniform throughout your company. Give your both your managers and their staff the gift of consistency and clarity of language, principles and process.  They will respond with increased effectiveness and productivity.

To learn the language of effective CEOs, check out How Dare You Manage? Seven Principles For Closing The CEO Gap.

Nick Forrest

Recently I attended a business dinner with a group of senior executives and the subject of what is the difference between “leadership” and “management” came up. Despite an energized discussion, by the end of the evening we had not arrived at a common agreement.

To me, this demonstrates that the profession of management is in trouble. Actually, management is not even seen as a profession… and it should be!

Look around you where you are sitting reading this blog. Nothing in the room you are in was not touched at some point in its creation by a manager. The chair in which you sit, the building that shelters you, the coffee you drink – all came about thanks to processes and people being managed. Our society depends on managers, and management is the pre-eminent profession of the 21st century. Yet it has no coherent unified body of practices, discipline and processes, unlike, for example, the accounting and legal professions.

Why is that?

The sad truth is that anybody can become a manager, and there are few consequences if one mucks it up. Managerial philosophy, values and practices are inconsistent. Oh unfortunate employees!

What we need to do is to treat management as a craft. What’s a craft? A craft is the lifelong pursuit of mastery of a body of knowledge. Practitioners of the craft of management would be expected to follow common principles, rules and standards of engagement.

If all this was in place, my colleagues and I would not have spent the evening arguing about the differences in meaning between leadership and management. We would know. Our profession would be defined by precedent and practice.

I believe companies would be very much better managed and employees would be more productive if management would be recognized as a profession. Everyone would benefit from increased respect, consistency, and clarity of expectations. And their managers would be held accountable to practice their craft in a clearly delineated manner to set standards.

Nick Forrest


This past weekend I attended the GO Conference in New York. Much of the discussion one day centered on the importance of CEOs being able to create a viable long-term strategy for their company.

It is something I don’t think many CEOs do that well; in fact, many have the audacity to outsource this work to consulting firms. In doing that, they don’t seem realize they are abdicating one of their key accountabilities: the creation of the strategy.

Presumably their Board hired them for a fair wage (society would probably say a princely sum). The Board felt they had the capability to think through, unravel and master the complexity and competitive dangers facing their company with the required strategy… but no, some CEOS will avoid one of the more exciting and delicious pieces of work a CEO does. And I did say delicious!  If the CEO is well matched and capable of doing the role he or she should love the challenge of doing strategy work.

One of my favorite stories is how a client of mine, a CEO, went about creating a strategy for his company. He had been engaged in a turnaround situation in an industry he was reasonably familiar with. He went ahead and hired a global consulting firm to help him with his strategy development with the following proviso and instructions.

“Look,” he said, “I and my executive team are going to do the interesting (and delicious) work of creating our strategy. We want you to do some of the legwork for us and carry out the research part of things and get me the specific data I want. We will then take that data and create the strategy. To be clear: I do not want you to recommend a strategy. Got it?”

Off they went. When they returned to present the data they also presented a strategy to him. He fired them on the spot! The strategy creation was his accountability and he wanted no interference from outside. His team had to be excited and value the work of strategy creation. The people on his executive team were capable and in the right roles. By creating the plan themselves, it made it their work.

Implementing the plan had a much higher chance of success than a plan devised and presented to them by strangers.

Needless to say, the strategy the team created (and lead by their CEO) was a game-changer in their industry and was implemented with huge success.

Nick Forrest

Recently, it was announced that Galen Weston, Executive Chairman of Loblaw Companies, has also been appointed as President and is taking over the daily operations of the business.  I cannot think of a better way to muddy the business waters and create obstacles to the smooth functioning of the company.

I firmly believe that the roles of Chairman and President should be separated. Here’s why:

1. It concentrates too much power in a single role. How can one person be accountable for both the oversight of the company as well as its day-to-day functioning?

2. One person as President and Chairman creates potential for conflict of interest. The chairman protects the interests of the shareholder, while the president manages the business. This often creates a healthy tension between the two roles that helps police them.  That can’t happen if one person holds both positions.

3. There is simply not enough time in a day for one person to fulfill both roles. How will he decide which “hat” to wear? Will he end up delegating and/or abdicating the bulk of his accountabilities due to time constraints?

Now, in addition to being chairman, Galen is accountable for managing and maximizing the performance of 135,000+ employees. This in itself has got to be more than a full-time job and does not need any other distractions. Either role in a company this size is hugely complex and time-absorbing.  The president’s role itself will be busy overseeing the integration of Shoppers Drug Mart into the Loblaw business. How will he apportion his time?

As President, Galen will have a lot of strategic thinking to do.  How will he ensure it is integrated across all of his reporting functions? How many store and location visits will he have time for? How will he plan his days? And during Board week, will the business take a back seat to board meetings? It all sounds like too much of a stretch.

In the long term, it could compromise the health of his business.

Nick Forrest