When Toronto-based consultant Nick Forrest meets the chief executive officers he counsels, the first question he asks is how many employees they manage. On average, they say eight, referring to their direct reports.
"No, you have 2,500 employees," he will typically reply, "and your success depends on your ability to reach them and empower them. You have to figure out how to manage 2,500 employees."
In most cases, they have little idea how to do that. They have never led that many people, and managing 2,500 employees or 1,000 or even 500 is very different from leading 70 or 100. They are now the big boss, and this requires a change in mindset.
"A CEO coming into the job has to realize that, for the first time, they own it all. Until now, they always worked in someone else's system. They blindly accepted that system," he said.
CEOs like to complain about the skills gap in others. But Mr. Forrest said there's a skills gap in chief executives and other top leaders. That gap is illuminated by three insights incoming CEOs must have:
1. Now I have more people to manage – not fewer, as might be assumed if looking only at direct reports. Managing those people can involve a quantum leap in complexity.
2. Now I'm accountable for everything. Yes, everything. The CEO is responsible for strategy, and how it is implemented. The CEO is also responsible for the structure of the organization, which she may not have given thought to before, but that may be the key to unlocking the potential of the employees working for her.
3. Now I need to manage more, not lead more. We continually hear that CEOs are leaders, not managers. But Mr. Forrest argues the opposite. "The higher you rise in an organization, and the more employees you influence, the more management matters," he writes in How Dare You Manage?, his book about addressing the skills gap.
The CEO must now learn the craft of management. This involves understanding how to manage large groups of people in a way that provides clarity and consistency, so they can do their work well.
"CEOs who do not practise the craft of management fall into the trap of implementing haphazard initiatives that are not thought through and integrated into the overall organization's structure and management and accountability processes. They kick these initiatives off with great fanfare and then watch them atrophy and die because the organization's systems are unable to support them," he writes.
While his book offers seven principles to close the CEO skills gap, he focused on two in an interview.
First, CEOs must define the work for employees. In many companies, he finds the employees have no idea what work they should be doing – in terms of how their everyday toil can help propel the company toward the intended strategy. "This applies whether there are 120 employees or 10,000. So you get employees spinning or trying to invent what they should do," he said in the interview.
As a manager, you need to tell your employees what success looks like – specifically, what output you want from them. What activities they actually perform each day isn't the focus. You must stress what the individual must achieve, which defines his role. As well, the employee needs to know five or six accountabilities – a word used to stress responsibilities for which leaders must hold people accountable – that are required to accomplish this role.
Before doing this with staff, you need to define your own role and accountabilities. In an example in the book, the CEO declares that the organization will be positioned as a national leader in its market. Accountabilities include creating the corporate strategy to achieve its business goals; building the talent and capability of employees so the company has a competitive advantage; ensuring operations perform at a high level; and establishing key performance indicators so organizational progress can be determined and all managers can manage effectively.
These priorities must cascade down throughout the organization. If not, employees will come up with work they think should be done but might undermine the actual strategy. "What is the role of a manager if not to define the work of their employee?" Mr. Forrest asks.
He also urges CEOs to adapt a series of management practices, highlighted by setting the context for employees, delegating tasks, monitoring and coaching. When delegating, employees must be aware of quantity, quality, time and resources, which he calls QQTR – how much of something needs to be produced, what standard is being applied to determine whether the work is good enough, when the activity needs to be completed, and what resources are required to complete the task.
"If you have that in place, you can manage and coach," he said. "If you don't have context, and haven't set QTTR, how can you manage and coach?"
Harvey Schachter is a Battersea, Ont.-based writer specializing in management issues. He writes Monday Morning Manager and management book reviews for the print edition of Report on Business and an online work-life column Balance. E-mail Harvey Schachter