6. They’re monitors and allocators of financial resources.
Billion dollar firms have financial specialists on board, but CEOs have to take a keen interest in the numbers. You should have a recurring weekly meeting with your executive team and reviewing your key metrics should always be on the agenda.
Large firms have processes in place to review capital expenditures and standards for appropriate ROI. They also have effective compensation systems in place, and the CEOs don’t pay themselves “whatever’s left over after all the bills are paid.”
As A.G. Lafley, the retired chairman and CEO of Proctor and Gamble, wrote in a Harvard Business Review (HBR) article, “We deliver in the short term, we invest in and plan for the midterm, and we place experimental bets for the long term.” That’s a good way to frame how advisory firm CEOs should look at their role in allocating resources.
Action Step: Make sure you have a good “cadence” of regular meetings and that the agenda covers your key metrics.
7. They’re integrators of the inside and the outside.
Management theorist Peter Drucker said, “The CEO is the link between the Inside that is ‘the organization,’ and the Outside of society, economy, technology, markets and customers. Inside there are only costs. Results are only on the outside.”
Drucker’s comment gets to the heart of the idea that there are certain things that only the CEO can do. Lafley, in that same HBR article said, “The CEO alone experiences the meaningful outside at an enterprise level and is responsible for understanding it, interpreting it, advocating for it and presenting it so that the company can respond in a way that enables sustainable sales profit and total shareholder return (TSR) growth.”
With the rapid pace of change in the financial services industry, this idea of “integrating the inside and the outside” is a key part of a CEO’s role. And one way you can do that is to step outside of the industry bubble. Attend conferences in other industries. Make a point to meet with a variety of experts in diverse fields. Listen to podcasts such as mine where I interview leaders from outside our industry and discuss outsiders’ perspectives on issues facing businesses today.
Action Step: Broaden your horizon by having regular meetings with other successful people from a variety of industries and backgrounds.
CEOs Shouldn’t Be Overwhelmed
This may sound like I’m blowing smoke here, but if you’re a CEO and you’re feeling overwhelmed, something’s wrong. Yes, it’s a tremendous responsibility and many people rely on you—that can be stressful. But if you’re working 12-14 hour days, week after week, the problem lies with you and your team—you because you’re not letting go and your team because they’re not pulling their weight.