The Strategic CEO vs. Tactical CEO

Each of my customers has a story that everyone can learn from. Several years ago I was contracted to help a company that lost its founder, CEO and corporate leader, after which the company fell into the hands of the CEO’s son.

His father brought him along very well but not to the point of immediate succession. The good news is the son is the total package—mature beyond his age, a motivated student—but he will still have to be stretched and coached for several years as he moves himself and the team to a higher level.

The son immediately took the lead with defensive moves to reassure the key relationships with valued customers, the bonding company, the bank, suppliers and company associates. We then focused on the team moving forward and his new role as the leader and CEO. He understood everyone would be looking to his performance, leadership and reassurance of taking the company forward.

After stabilizing the ship, he analyzed his present team—his goal was to get the right team on the bus and in the right seats. He found some key associates were in the wrong seats, expanded the roles of some players and has made a new strategic hire. I was very impressed with his analysis, especially the reading of his team and their skills.

Focus on the Bigger Picture

After a coaching session I wanted to leave him with a single thought to move him forward and help him visualize the big picture of his new role as CEO. My intention was to begin planning for the changes that were going to be required to create a championship team. I got this idea from Robert Slee, the author of Midas Managers.

I instructed him to tape a note reading “$200” on his monitor to focus every day on his responsibility as a CEO.

In his second year, the sign should be changed to read “$400.” And in year three it should say “$500.” Why did I ask him to do this? Because these are the minimum hourly wages for which he should work. His new role as leader/CEO is to create value and focus on the big picture of the company.

Underperforming CEOs spend almost all of their time working on jobs of their managers and support team that pay less than $50 per hour. Even if an owner works 3,000 hours per year at this rate, they will only earn $150,000 (at most). The challenge is to leverage your time through leadership, process, vision, performance, training and accountability. $50 an hour doing everyone’s work is not the path to financial independence or a great company.

Consider what’s involved in a CEO’s role that pays more than $200 per hour:

Leading, teaching, coaching, mentoring, stretching and holding everyone accountable.
Listening, reporting, building consensus and communicating in management team meetings.
Creating the vision and strategic plan that every associate understands.
Setting the standard, leading by example, and recognizing and rewarding those who excel.
Strategically choosing the right niches and most profitable markets.
Being at the helm and looking at the next turn, and over the horizon.
Getting the right people on the bus and in the right seats for each niche.
Implementing the systems, measurements and appropriate performance metrics.
Funding those niches that provide higher margins and growth.

You can see that the more-than-$200-per-hour activities are all strategic and cannot be outsourced. Also notice that these activities require “right brain thinking” (creative, intuitive) as well as “left brain thinking” (analytical, structure); this concept can be better understood by reading the best seller A Whole New Mind by Daniel Pink.

Compare this to how most owners spend their days in $50-per-hour and under activities:

Creating estimates or quotes that should only be reviewed by the CEO.
Putting out fires caused by not following written procedures and unclear directions.
Following up with things that should be done correctly the first time, every time.
Meeting with vendors, not strategic partners.
Talking on the phone or meeting about stuff that doesn’t matter.
Dealing with various logistical issues that are not on the strategic plan.
Doing other people’s jobs because they are not trained properly.

Do you see yourself here? These are tactical activities that could be delegated to people who earn less than $50 per hour.

How many hours each week would you need to work if you focused on $200-per-hour activities? The answer is five to 10 hours per week. This is highly counterintuitive to most people who have been brainwashed into believing that working 60 to 80 hours each week is a virtue. You will never become financially independent or grow your company by routinely working such long hours. Sure, you will have to work some long hours while setting up the value-creation system. But that should not take more than three years.

My continued coaching and training process over the next three-year period will focus on these big picture high-value activities:

Teamwork activities moving employees toward understanding themselves, their blind spots and their teammates.
Strategic planning and vision for one to five to 10 years for management, operations and marketing.
Championship management skills and leadership development.
Creating systems and manuals for accounting, operations, marketing, safety and estimating to leverage quality and efficiency.

I am excited about this company and its leader, and blessed to be coaching him as a partner in the company’s future.

In closing, ask yourself three questions: