Breakthrough for business: End the CEO as we know it.
21st-century firms can’t rely on a 20th-century leadership model.
Noida, India — What's the best way to improve the performance of your company? Get rid of your CEO. I don't mean literally kick him or her out the door; I mean jettison the idea that the CEO should be the supreme corporate leader.
This is what we are working to do at HCL Technologies, where I am CEO. Over the past five years, everything about my role has changed and everything about our company has improved. We have increased our revenue and our share price, grown from 30,000 to 55,000 employees, and gained a lot of positive attention worldwide.
In today's hypercomplex, superfast world, no one person can play all of the roles traditionally ascribed to the CEO:
•Creator of Value. The CEO alchemizes all the company's ingredients into gold.
•Answer Machine. The CEO is asked all the questions and knows all the answers.
•Strategy Wizard. The CEO predicts the future and formulates a grand plan for the organization.
•Approval Granter. The CEO reviews all business plans, determines their value, and divides up the resource pie among them.
•Performance Reviewer. The CEO acts as teacher and mentor to hundreds of senior managers.
At HCL I came to realize that, first, I could not play any of those roles and, second, none of them creates very much value for the company or the company's customers. On the contrary, the supreme CEO robs employees of initiative, stifles their passion, and inhibits their ability to do their jobs well. If employees do not have to find their own answers, develop their own strategies, formulate their own plans, and assess their own performance, what are they? Automatons.
Now, how can firms end the reign of the sovereign leader? Here are some ways that have worked for us:
•Locate and maximize the value zone. The CEO must figure out where the value zone lies – in HCL it is in the interface between our frontline employees and customers – and then do everything to enable those people to create all the value they can. We have done this at HCL with a management approach we call "Employees First, Customers Second," which is a collection of practices and tools that help make management accountable to the value-creating employees.
•Stop answering questions. At HCL, we have developed a portal that enables us all to ask questions of one another. I often say that I have no idea how to proceed and ask for help. During the recession, employees' suggestions enabled us to grow without any wholesale head-count reduction.
•Tear up the napkin. Long-range strategymaking has morphed into constant thinking and adjusting, analyzing, and recalibrating. We have developed a process of strategy that involves four well-defined phases that we repeat over and over again as the business environment changes and our capabilities and interests change.
•Have peers review plans. HCL managers record their annual business plans and post them on a portal for all to review and share. This improves the quality, integrity, and executability of the plans through feedback and refinement.
•Review the influencers, not the controllers. At HCL, and most companies, employees are influenced by many people who have no formal control over them. We have opened up the review process and made the reviews available for all to view. As a result, we reveal who really affects whom, how well they do so, and what they might do to improve.
We are making progress in transforming the role of the CEO and transferring the responsibility for change to employees, as are other companies around the world. Our goal is to become a completely self-governing organization with no maximum leader at all. Until that day comes, we will have to get along with a CEO who is willing to admit he doesn't know very much, answers as few questions as possible, and is always asking for help – but whose company is growing and thriving.
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