Now, more than ever, chief executives are at the top of the management pyramid. They often wield immense power, subject only to the guidance of the board of directors. But, with this power, what is the appropriate level of responsibility? The CEO cannot take personal responsibility for everything that happens in the name of the company; that’s simply not reasonable. For the sake of the company and the shareholders, the responsibilities of the CEO need to be clearly delineated, and the board needs to ensure that the CEO both accepts responsibility and is held accountable. If that’s the case, what should you be responsible for as CEO?

1. TOOLKIT
FOR THE RESPONSIBLE CEO

2. Responsibilities
of the CEO need
to be clearly
delineated.
The Responsible CEO
Now, more than ever, chief executives are at the top of the management pyramid. They often wield
immense power, subject only to the guidance of the board of directors. But, with this power, what is
the appropriate level of responsibility? The CEO cannot take personal responsibility for everything that
happens in the name of the company; that’s simply not reasonable. For the sake of the company and
the shareholders, the responsibilities of the CEO need to be clearly delineated, and the board needs
to ensure that the CEO both accepts responsibility and is held accountable.
If that’s the case, what should you be responsible for as CEO?
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3. The CEO sets
direction by
communicating
the strategy and
vision of where
the company
is going.
CEO Responsibilities
The responsibilities of the CEO consist of four key tasks:
➤ et strategy and vision.
S
➤ uild the team.
B
T
he board and senior management can help you to develop a strategy, and investors can
approve a business plan, but you have the deciding responsibility for critical issues such as in
which markets the company will compete and with what product lines.
A
s CEO, you hire and lead the senior management team. They, in turn, hire and lead the rest of
the organization. Your role also includes identifying and firing non-performers, and keeping the
senior team members working together in a common direction.
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4. You consider the
company’s major
expenditures
and manage the
firm’s assets.
➤ Build culture.
Y
our every action—or inaction—sends cultural messages. Work gets done through people, and
people are profoundly affected by culture. An unpleasant place to work can drive away high
performers, while a great place to work can attract and retain the very best.
Everything matters. When the you talk to someone, that choice signals who is—and who isn’t—
important. Your clothing choice sends signals about the formality of the workplace. How you
treat mistakes sends signals about risk-taking. Who gets fired, who gets promoted, and what is
rewarded all shape the company’s culture.
➤ Allocate capital.
Y
ou set budgets within the firm. You choose to fund projects that support the strategy and cut
off projects that lose money or don’t support the strategy. You consider the company’s major
expenditures and manage the firm’s assets. While some CEOs don’t consider themselves to
be financial experts, at the end of the day it’s these decisions that determine the company’s
financial future.
Ensuring that these tasks are completed is essential. Top people who fail to take responsibility cannot
long remain in the corner office. When they stay, the downward course will become immensely difficult
to change, even under new leadership.
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5. When you
have a lack of
responsibility
coupled with an
accountability
vacuum, then
you always have
problems.
The CEO Who Failed to T
ake Responsibility
Others often unhesitatingly trust in the leadership of the CEO, and CEOs who are not held accountable
can often skate along without taking personal responsibility for poor performance. There are many
recent cases of CEOs who stayed in their corner offices too long and led their companies into decline.
The failure to take responsibility can be very costly.
Is the avoidance of responsibility purely the fault of the CEO? Not always. But when you have a lack of
responsibility coupled with an accountability vacuum, then you always have problems.
The biggest and most public example of a CEO and his board, both avoiding their responsibilities, was
at General Motors (GM).
Under CEO Rick Wagoner’s watch—and that of the GM board—the company took a long and hard dive.
When Wagoner assumed the titles of President and CEO in 2000, the stock was trading at around $60
per share. During the next few years, the stock fell to around $11 per share, and then during the Great
Recession, it plummeted to $5 per share.
Under Wagoner and the board, GM missed trend after trend. The auto giant was late getting into sport
utility vehicles (SUVs), and then late to introduce small SUVs, like Ford Motor‘s successful Escape. GM
was late in creating hybrids as well. It reintroduced the legendary Camaro years after Ford redid its
Mustang and Chrysler reinvented its Dodge Challenger. The company built boring cars with outmoded
engines and interiors with poor fit and finish.
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6. After over
a month of
analysis,
the Obama
Administration’s
auto task force
determined that
the company
had failed to
put forward
viable plans to
restructure and
survive.
The company showed disrespect for the product, the engineers who created it and the customers who
bought it.
And here’s where a failure of responsibility intersected with a failure of accountability: Despite
consistent erosion of market share and losses of $10.4 billion in 2005, $2 billion in 2006, and $38.7
billion in 2007—the biggest ever for any automaker anywhere—the GM board remained a staunch
backer of Wagoner.
When Connecticut’s Senator Chris Dodd said that Wagoner should be replaced, GM spokesman Steve
Harris was quick to defend him: “GM employees, dealers, suppliers and the GM board of directors feel
strongly that Rick is the right guy to lead GM through this incredibly difficult and challenging time.”
Accountability finally arrived from Washington. In March of 2009, after over a month of analysis, the
Obama Administration’s auto task force determined that the company had failed to put forward viable
plans to restructure and survive and demanded that Wagoner leave. After thirty-two years at GM,
Wagoner retired with an exit package valued at over ten million dollars.
Who was to blame? In this case, the buck stopped with the board, who, for years, stayed the course
amid clear signs that the company needed a new direction. The board failed to demand that the top
executive take responsibility for the automaker’s long and steep decline.
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7. Responsibility is
both honorable
and makes good
business sense.
The CEO Responsibility T
oolkit
Too often, it’s easy for a CEO to build an ivory tower, where only good news is heard and the CEO
is adored universally. This tendency is destructive and must be resisted by those who have direct
oversight of the CEO—the members of the board.
What do you need to do to ensure that you are taking responsibility?
Obviously, the number one thing is the willingness to be responsible. Responsibility is both
honorable and makes good business sense. Here’s a set of tools that can help you to achieve
personal responsibility:
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8. If you don’t
meet your goals,
withhold your
bonuses, take
no raises, and
treat yourselves
exactly as you
would treat an
employee who
failed to take
responsibility.
➤ tay Connected to Your People.
S
C
ultivate an attitude of respect—that is, your respect for them. The project managers,
programmers, customer service reps, salespeople, and human resource professionals are the
ones turning your vision into reality. Ask yourself whether you could do their jobs as well as
they can. Get as close to the front line workers as possible. Walk around and talk to your
managers and employees, especially the ones who are more capable than you in their area of
expertise, and learn from them.
H
ow many times have you, as an unhappy customer, said to yourself, “What’s wrong with the
company that made this thing? Can’t they see how it’s obviously of poor quality?” Chances
are the CEO was clueless and disconnected. Don’t be that CEO. Listen with an open mind
to what your people tell you. Ask what works for them and what doesn’t. Listen to their
comments without judgment. Rather than imposing your own view of the world upon them—
which, of course, you are free to do with the stroke of a pen when you’re sitting in your
office—connect with their experience of the world and of the marketplace. Ask them what
they hear from customers.
I
n return, share your vision with them. Remember, as CEO, it’s your job to help every employee
be a success. Ask them how their job fits into the work the company does. If they don’t know,
help them understand how their job links to the vision. Clarify any confusion they may have
about where the company is going. Ask them what you can do to help them succeed at doing
their best. Then do it.
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9. Remember, as
CEO, it’s your
job to help every
employee be
a success.
➤ erve Your People.
S
A
s CEO, it’s easy to get into the mindset that everyone is there to serve you. And, on many
levels, they are. But remember, without your employees, your dreams and plans can’t become
a reality. Take every available opportunity to acknowledge the contribution of those around you
and give them credit, especially in public. Feedback is rare in most companies, and positive
feedback is rarest of all.
A
couple of times a year, ask your direct reports, your board, and anyone else you work with
for honest feedback. You can use a 360-degree feedback process or simply ask in an email.
C
reate measurable performance criteria for your executive team, including yourself. Make sure
people within the organization know your goals, and know what you can be counted on to do.
Hold yourselves accountable. If you don’t meet your goals, withhold your bonuses, take no raises,
and treat yourselves exactly as you would treat an employee who failed to take responsibility.
It sends a powerful message to the company that you’re serious about performance.
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10. Gather honest
advisors who
are willing
to hold you
accountable for
your behavior.
➤ cknowledge Your Mistakes.
A
Y
ou hold your staff responsible, and you need to accept your share. The buck stops with you.
When things don’t go the way you want, take responsibility—whether or not it’s your fault. The
mindset of responsibility will put you in a much more effective place than the mindset of blame.
G
ather honest advisors who are willing to hold you accountable for your behavior. Your board
might give you honest feedback, but they are removed from your day-to-day activities. Actively
solicit feedback from friends, peers, and associates. Share your issues and how you’re handling
them, and ask for an honest assessment.
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11. Great CEOs
know how to
filter the reams
of data that
come their way
every day.
➤ Stay Informed.
I
f your company has more than a handful of employees, you cannot know everything about
every detail of your company. Seek out experts and ask for their guidance. Validate their
options with your managers, advisors, suppliers, employees, and customers. Many companies
have fallen hard because they believed they were entitled to be market leaders for no good
reason other than an inflated ego.
G
reat CEOs know how to filter the reams of data that come their way every day. You need to
be able to access relevant information quickly and succinctly, and there’s no better way than
with a networked dashboard that feeds you the key performance indicators that you need to
see. With such information at your fingertips, instead of waiting for bad news—or for a fearful
manager to put a “spin” on a lousy report—you can pick up the phone and proactively ask for
an explanation.
C
reate systems for gathering feedback. Pay attention to customers, competitors, analysts, and
others in your industry to understand how your company and products are perceived. Make
sure you’re gathering feedback that will challenge your beliefs about the market as much as
they confirm it. For example, if you think you’re a leader in your market, don’t just ask customers
why they like your products. Ask them what other products they use, and how your products
could be improved.
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12. Expect the
highest ethical
and professional
standards from
yourself, your
managers, and
your employees.
Raise Your Standards—and Theirs
Expect the highest ethical and professional standards from yourself, your managers, and your
employees. Remember that they’re watching you and modeling after your performance. They will
believe what you do is a reflection of “the way it is,” for good or for bad. If you ask a project team to
work through a holiday while you’re on a skiing trip, do not be surprised if the results are lackluster. If
you only talk and never listen, your executives will do the same. If you dismiss customer complaints
as the grumblings of a few malcontents, your salespeople will treat your customers accordingly. If you
blame the government for making it tough to do business, your competitors will encourage you to hold
that belief as they take your market share.
These are just a few of the things you can do to foster a climate of personal responsibility and increase
your chances for success as a senior executive. Success can be had with many different personalities
and skill sets. The more you learn about yourself and your capabilities, the better you will be able to
shape a job that works for you. The more you learn about the capabilities of those around you, the
better you will be able to build teams that produce spectacular results.
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13. About Kapta Kapta provides executives with a cloud-based system to clearly communicate company goals, track every employee’s expected
contribution and review overall status through a real-time dashboard. Headquartered
in Boulder, Colorado, and founded in 2011, Kapta gives executives a clear line of sight
into each team member’s performance and the system’s easy-to-use alignment tools keep
employees on track in less than five minutes each week. Kapta’s intuitive input process
virtually eliminates “work about work” and instead provides employee alignment
and executive feedback to successfully scale your business.
For more information, please visit
kaptasystems.com