The Chief Pollinator
Another look at what CEOs really do
The job of the CEO is to lead – everything. CEOs lead the people in their organization, of course. Leading people includes clarifying what work should be done and the way people are organized to do the work. In turn, that requires that the CEO ensures that good people are selected and that they are given the development they need, rewarded appropriately, and encouraged to work together. A culture needs to be created that is innovative and motivating, because the CEO has to manage performance, not just people. The culture has to be innovative because the CEO is responsible for growth, which requires new products, new ideas, and new ways of doing things. These things all cost money, so the CEO must raise capital and establish a sustainable budget. On the subject of sustainability, the CEO needs to set the company’s policy with regard to ESG (environmental, social and governmental), since maintaining the company’s reputation and making certain it operates within the law is also the CEO’s responsibility. Doing these things requires the active engagement of stakeholders and the CEO is responsible for maintaining good relationships with these people and issuing timely and informative communications concerning the company’s activities. The board is interested in these activities, and up to thirty percent of the average public-company CEO’s time is spent preparing for board meetings. The board thinks of all kinds of things the CEO should be responsible for, including planning for their own succession and making important choices about AI and other technologies that promise to transform the way business is conducted. Businesses need customers, and the CEO is the face of the company to key customers, meaning that the CEO carries a responsibility to understand customer needs and guide the company to meet them. The CEO is responsible for strategy, acquisitions, spin-offs, outsourcing, downsizing, transformation, partnerships, industry agreements, supply chain policies, charitable contributions, community involvement, executive offsites and holiday parties.
You can do the math. Three hundred sixty-five days divided by thousands of meetings and trips and speeches equals impossible. The job can’t be done, unless the CEO has met with Santa Claus to discover the secret to delivering millions of presents during the short interval when the kids are sleeping. Yes, there’s delegation, but the CEO is still personally responsible for everything which requires at least enough involvement to know what is happening and not be embarrassed when a board member as a question about why a vendor in Vietnam was found to be secretly using underage workers in a factory that supplied component parts to your supplier in Cambodia who assembled them into products that were shipped to your customers in Latin America. Oh, and by the way, there’s a leak in the sink in the men’s room that needs to be fixed.
Everyone believes the CEO is in fact doing all the things he or she is responsible for. Everyone knows that can’t possibly be true, but no one dares to question whether Santa is real. The CEO assigning full responsibility for something to anyone else wouldn’t be satisfactory. It has to be the inhabitant of the corner office, or it doesn’t count.
What comes to mind is the image of a bee pollinating flowers, flitting from one to the other all the working day. Pausing for lunch is rare, since there is a massive field of blooms waiting their turn for the CEO to visit. Although the visit will often be briefer than the flower might have hoped, enough pollen was transferred to keep the process of regeneration going until the CEO can return.
How then should we think about the performance of the CEO? Should we count the number of flowers the CEO has visited over the course of a year? Is just showing up for meetings to impart a word of encouragement enough? Should each flower give the CEO a grade? Or should we judge the CEO by the health of the flower ecosystem? Is the field of flowers getting bigger or smaller?
Given that fulfilling all the responsibilities of the role is impossible, should the board reward the CEO on his or her pollination efforts regardless of their outcomes? If one of the many responsibilities isn’t accomplished or turns into a crisis, how much weight should be given to that single measure compared to the rest of the picture? These are not idle questions; boards struggle with them every year as the CEO’s performance is reviewed and compensation for the next year is tied to certain goals.
In an ideal world, the board would spend some time in honest conversation about the specific measures that will be used to assess the CEO’s performance. The board would acknowledge the impossibility of the role but understand that given the company’s strategy and business challenges, some priorities rank higher than others. If low priority goals slip or even create unexpected issues, the board should understand that the CEO was focusing elsewhere. Being on top of everything isn’t possible, so the CEO shouldn’t be penalized for focusing attention on the things that matter most.
As important as the criteria for performance that are ultimately accepted is the alignment among board members regarding what really matters. More than a few CEOs have run themselves ragged trying to respond to the diverse and sometimes opposed concerns of powerful members of the board. A lack of alignment among the board members regarding performance criteria is a failure of the board chair, not the CEO.
Again, the secret to a low-stress CEO performance review is the board spending time carefully thinking through the criteria and the metrics that will be used to define different levels of success. Some criteria are easy; X percent increase in sales, or Y% improvement in profit. Other criteria are yes/no. Does the CEO live up to our code of conduct? While this seems like it would be easy to assess, what exactly does “living up to the code of conduct” mean? Does the CEO know what the board is looking at, specifically?
And then, there are the criteria that start fuzzy and stay fuzzy, no matter how much conversation the board has and how much effort is put into coming up with metrics. Is the CEO a good leader? Does he or she have the confidence of their people? Are they building broad and deep relationships with key customers? With these intangible goals, there can be a lot of flying from flower to flower without a true sense of what is being accomplished. Therefore, while intangible goals may still be important, the CEO needs to be granted a little leeway if they approach the task differently than a board member might prefer.
When a faction of the board sees something they don’t like in the performance of the CEO they can become loud and insistent. It’s up to the chair to call for an objective discussion grounded in evidence and shared views of what really matters. What’s more, best practice dictates that in as much as possible, the board aligns itself on performance criteria in advance and shares what they are thinking with the CEO before giving the CEO a final grade and sending them to buzz off on another mission.