The Chief ‘Execution’ Officer
“What’s needed to be tomorrow’s CEO?”
This is one of the key questions in PwC’s 18th annual Global CEO Survey of 1,322 CEOs in 77 countries. Of course, there was a wide range of answers, but the biggest category of responses was “strategic thinking.”
You might be saying to yourself, “Well, duh!”—but what does “strategic thinking” really mean? The CEOs told PwC it meant that they have to be aware and make sense of the many changes happening in their markets; to be able to draw conclusions from current trends while anticipating the future; to set a clear vision; to be able to take a healthy amount of risk; and to make decisions quickly and effectively.
Whew! Sounds like the job description of a superhuman to me. In my way of speaking, however, I’d summarize all these findings by saying that what’s needed to be tomorrow’s CEO is the enthusiasm to dive into and drive the details of strategy execution. These CEOs are essentially saying that it’s not enough to relegate strategy implementation, risk management, intimate customer understanding or decision-making to staff. On the contrary, there’s so much at stake in our constantly changing business environment that leaders must get involved and understand the details.
For example, a recent client company of our firm had been realizing success by developing products it thought the market needed and wanted, and most of the time it hit the target. Then the industry changed, and suddenly the company was in distress. The conclusion of our analysis was to change the company’s mindset and immerse it in the details of its customers. In short, it needed AMMO, which stands for “A Marketing-Minded Organization.” After explaining what this meant, and the steps needed to become AMMO, the client embraced the new direction. Over the next several months, the evolution to AMMO resulted in a huge turnaround in revenues and profit.
Oftentimes, details about strategies—and in particular the details about specific markets and the buying habits and desires of customers—are relegated to the marketing staff or the sales manager. Successful leaders, however, see themselves as the Chief Execution Officer of their companies and get actively involved with these details. (This includes the board of directors, as well. I get that directors are not supposed to get too involved in operations and should practice the old saying of “Heads in, but hands out” of the company operations. But I believe that is a truism of a bygone era. Directors need to know the details about markets, customers and segments in order to make informed decisions about strategy.)
Traditionally, the approach to getting into the detail of markets is segmentation using several methods including demographics, psychographics such as how customers think and sociographics such as customer buying habits. Using each of these approaches together contributes to a detailed understanding of market segments and customers, and is where you should start when developing strategy. I apologize if this seems academic, but it never ceases to amaze me that many executives and directors have very little knowledge and understanding of market segmentation basics.
While segmentation is a good start, legacy segmentation models have limitations at today’s pace of global business. Drivers of purchasing decisions have become increasingly difficult to determine, as new social media technologies have changed what customers value and how they make decisions. Keeping abreast of the details of market trends and changing customer behavior in our digital world must be a priority to remain competitive. The digital capability through social media that connects customers, gives them a voice and offers online purchasing options without regard to geographic limitation has become a significant challenge.
The place and space limitations that once defined customer behavior do not exist today, when customers can purchase the same or a similar product from several different retailers online; compare features, benefits and prices; and read opinions of previous customers and learn about the good (and bad) about your brand on their cell phone. These new capabilities make those old demographic boxes around age and gender, and sociographics boxes about behavior, fuzzier and fuzzier.
If you’re about to throw in the towel at this point, don’t! There is good news about organizations that are delving into the details of their customer’s digital footprints. Big-data analytics are allowing executives involved in these details to gather and analyze market intelligence to respond appropriately. Analytics, for instance, are being used to optimize pricing strategies, provide better customer service, fine-tune market segmentation and adjust inventory to better respond to market demands.
The devil is clearly in the details, but those leaders who make it a priority to understand these particulars are the saints. Those who have the skills to understand and anticipate what the trends mean for their future, and to communicate a strategic vision are the ones who are proud to be called “Chief Execution Officers.”
Mark W. Sheffert (email@example.com) is founder, chairman and CEO of Manchester Companies Inc., a Minneapolis-based board and management advisory firm specializing in business recovery, transformation, performance improvement, board governance, and litigation support.