Platt Perspective on Business and Technology

What do C level officers do? 16: Chief Executive Officers and Presidents 2

Posted in career development, HR and personnel, job search, job search and career development by Timothy Platt on January 30, 2015

This is my 16th posting to a series on what C level officers of a business or organization do, that specifically emerge as job requirements for the senior leadership of an organization (see Guide to Effective Job Search and Career Development – 3, postings 376 and following for Parts 1-15.)

I began my overall discussion of leadership and management at the top of a business and of its senior executive team, with Part 15 of this series where I offered:

• A simplest case, baseline model of overall business leadership with a single most-senior managing executive and an effective, supportive strategically aligned board of directors (see my posting: Boards of Directors and Corporate Culture and Strategy for a discussion of board types, and of what it means for a board of directors to be strategically aligned as a taxonomic type.)
• And a list of four possible complicating scenarios as alternatives to this baseline model, all of which are drawn from real-world experience and I add commonly shared experience for anyone who has worked with a variety of businesses.

I stated at the end of Part 15 that I would continue its discussion in a next series installment with the first of those alternative scenarios, and start that here by repeating its brief orienting description from that posting here:

• A business has separate positions of President and CEO that are held by different people.

This, in fact does not represent just one possible scenario; this situation can arise in a variety of ways, and with at least as wide a range of consequences, good and bad. Before delving into a selection of them, I would begin this by discussing the issue of final authority and responsibility, and with a perhaps well-known historical example.

The ultimate responsibility of a leader is to make final, binding decisions, and particularly under circumstances where there is significant opportunity for disagreement and where a single voice has to be able to rise to the top to get necessary decisions made.

President Harry S.Truman put a small sign on what had just become his desk in the White House Oval Office when he became President of the United States with the death in office of his predecessor: Franklin Delano Roosevelt.

Truman stepped into the presidency of the United States at a time when his country was engaged in fighting a global war and across two massively extensive fronts: against Nazi Germany and their immediate allies in Africa and Europe, and against Imperial Japan in the Pacific. And he found out as he was taking on this new responsibility that Roosevelt has kept some of this war’s most important and far-reaching secrets from him, including the existence of the Manhattan Project and its efforts to build an atomic bomb that could be used to end the war. Truman had to be briefed into this project, and a great many other secrets that he has not been told of and very quickly. Then he had to make the final decision on whether to use this new weapon, and if so, where and under what terms. Some of his senior advisors, for example, counseled that he should detonate one of these new bombs on an uninhabited site first, and with a warning that similar devices could be and would be used on populated military targets; others argued the case that this new weapon should be used immediately on a populated target so as to force Japan into immediate surrender from the shock this would create. He chose the second of these options, and the result was that a first atomic bomb was dropped on the city of Hiroshima and a few days later a second one was dropped on the city of Nagasaki. This did bring the Japanese government and military to agree to unconditional surrender and very quickly.

Truman put a small sign on his desk: a small wooden sign of the shape and size more usually used to indicate the name of the person who uses a desk at work, that said “The Buck Stops Here.” There is an expression: “passing the buck” that refers to passing responsibility to make a decision and to bear responsibility for it, to someone else. The buck stopped there, with Truman and he said he with his sign that he was the one who would make the final decisions and take responsibility for them. On a smaller scale, that is the role that the single most-senior executive in my simplest case scenario takes, from Part 15 of this series. The buck stops with these senior executive leaders and they make the ultimate decisions, and whether that means supporting and validating a decision made further down the table of organization, or arriving at and enforcing a new decision that might or might not be popular but that they see as necessary.

I identified Scenario 1 on my above list as a single scenario, at least when first noting it in Part 15, but it in fact represents a collection of possibilities, all of which lead to divided leadership at the top and a forking of that “the buck stops here” where there is no consistent, absolute final stopping point in place for decisions to be made at. More specifically, and as a starting point example, I have seen startups that were co-founded by two people with strong personalities who seek to resolve their potential conflicts as to who should lead by having two co-Presidents, or a President and a Chief Executive Officer. This is a recipe for disaster unless they come together to establish precise areas of control and responsibility where each would have the final say. Even there, this creates problems as many decisions have far-reaching impact and implications that would cross those agreed-to boundaries. And there are always going to be gray area decisions that do not cleanly fit into any one side of such a division of oversight and responsibility. Successful startups that try that approach generally succeed in part because they abandon that approach and switch to having one top-level, most senior executive officer, with their founding business partner, for example taking on the role of Board Chair, or stepping back to take an Executive Vice President and senior advisor role in that way.

I have also seen a shared top-leadership approach taken when two roughly equal sized and equally influential businesses merge, with the Chief Executive Officers of the businesses that entered into this merger both staying on and with a primary role of overseeing what had been their own old businesses. That can be at least as problematical as the situation I just noted for dual top leadership startups and for reasons that parallel those that arise for those startups too. The one situation where I have seen this type of division of leadership work is in fact where one of these officers (generally a Chief Executive Officer) takes overall ownership of strategy, while their co-leader partner (generally deemed that business’ President) takes on overall operational leadership and as a particularly powerful variation on the Chief Operating Officer position (see Part 6.)

A dual approach can be more sustainable when one of these leaders takes, as in the above example an operational approach and serves as what amounts to a Chief Operating Officer President, and the other take on a more overall strategy approach and serves as Chief Executive Officer in that sense. But dual leadership is always complicated and these business leadership divisions can become fragile and ineffectual, and certainly in the face of rapid change, with the uncertainties that brings. So with time that approach tends to be moved away from – even if there are exceptions where dual leadership can be stably maintained and long-term.

I am going to continue this discussion in my next series installment where I will delve into the issues that arise with Scenario 2, from my above-cited numbered list, where:

• A business has an owner who takes a very hands-on approach to their business, and a most senior executive manager who works for them but who at least nominally holds senior executive authority over that business, and by whatever name that executive level officer would be identified by (see Part 15 for the complete alternative scenario list.)

Meanwhile, you can find this and related postings at my Guide to Effective Job Search and Career Development – 3 and at the first directory page and second, continuation page to this Guide. I also include this posting in Page 2 of my Human Resources and Personnel directory and also see its Page 1 for related material.

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