What Only the CEO Can Do – HBR Article

I just finished reading the article, What Only the CEO Can Do in the May, 2009 edition of Harvard Business Review.

It gives a lot of great insight from the CEO of Procter & Gamble, A.G. Lafley.

He references Peter Drucker a lot in the article. Clearly, Drucker was a big influence in Lafley’s point of view. I completely understand the significant influence Drucker has in any thinking executive’s life. Drucker makes astounding observations that point out striking philosophical business observations.

For example, Drucker wrote that the purpose of a business is to create a customer.

He just gets to the heart of issues in a laser clear way.

This article addresses the most important roles a CEO should play in an organization.

Lafley states that the “CEO has a very specific job that only he or she can do: link the external world with the internal organization.”

The CEO, he says, “can see opportunities that others don’t see.”

This is true for a business of any size. Every other person in the company is focused on their job and how to do their job to the best of their ability. It becomes nearly impossible to shift perspective from an internal focus to an external focus for people inside a company. The only other people that have an external view are the sales people. I suspect maybe that is why they often go on to lead the organization.

The article addresses what the actual work is to “link the external world with the internal organization.” What does that exactly look like?

He breaks this into four tasks.

What I want to do in this article is to address each of these four tasks in how they relate to SageRock and my role at SageRock.

Task 1: “Defining the Meaningful Outside”

This means that if you take a look at all the outside influences that effect your company, which ones matter the most?

For SageRock, I feel that is represented in balancing the needs of our customers with the tools of the marketplace.

The Web marketing industry is still rapidly evolving. While there are definitely advertising market leaders like Google, there is still a lot of shuffling that is going on. For example, Facebook is overtaking MySpace in market share. Will Facebook become the dominant social media hub for the next decade? That’s very hard to say.

To see the quick evolution in our industry, you only need to look at Google who is canceling Google Print Ads and Google Audio Ads.

So, we walk a fine line between offering innovative services and services that work. The difficulty is knowing which up and coming services will be the services that work in the near future.

We have to test them to determine their validity. But we can’t invest a great deal of time and money to these efforts.

There are two primary needs we fill for our customers: increase sales and raise brand awareness. If we aren’t doing either of those things, we aren’t adding value to the relationship. That is why we are in the game.

We can never lose sight of our single purpose: to increase sales and raise brand awareness for our clients. If we aren’t striving for those things we should be in another line of work.

Task 2: “Deciding What Business You Are In (and NOT in).”

“Where should you play to win? Where should you not play at all?”

Lafley sold Jiff to Smucker’s because Jiff was not a global brand… which is a criteria for P&G in determining where they will play.

For SageRock, our determination is: We are in businesses where we can be superior and innovative.

If we can’t add significant value to a particular market by being the best provider offering the most innovative solutions, we shouldn’t be in the business.

Web development is a good example of this. I don’t feel we have anything significantly interesting to add to the Web development industry. So, ultimately we should stay out of it.

Landing page design and optimization is a different story. I feel we can offer significant value in this arena.

Task 3: “Balancing Present and Future”

For SageRock this has to do with how much internal investment we spend on various kinds of services: declining, growth and mainstay services are how we look at it.

As an example, cost per click search marketing is a mainstay service. It is a significant portion of our business. So, we want to be involved in this to a significant degree. We want to be the best and most innovative company in this arena.

Growth services include many interesting areas: mobile, display, analytics, social, local. We are often inclined to spend a lot of energy in these areas. Most businesses, I think, spend a lot of time in up and coming technology for their industry. They are fun and represent the future. But you have to be careful not to spend more time in this arena than in the mainstay arena.

Declining services also represent their own risks and potential pitfalls. It can be difficult to let a service go that was once important to your business but now is not so much. This includes things like: buying links, link exchanges, link directories, keyword density-based SEO.

At least 60% of our time, money and resources should be focused on our mainstay services. These include SEO and CPC advertising.

The remaining 40% of our time, money and resources should be focused on growth services, like the ones mentioned above.

The declining services I mentioned here should be dropped altogether.

Ultimately, we want to sell and provide at a high level of competency what people are buying.

Task 4: “Shaping Values and Standards”

Simply put, SageRock always tries to be the best at providing the services it offers to its clients. If we can’t be the best and most innovative at a service, we shouldn’t do it.

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This was  an excellent article. If you are the head of a company or division, I highly recommend giving it a read. These are important things a leader should know.

Image from: IMG_0763 on Flickr – Photo Sharing!

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Sage Lewis

My name is Sage Frederick Lewis. My kid's name is Indiana Sage Lewis. I am filled with love and passion for many things in life. The list of things I like about life is MUCH longer than the things I don't like about life. So, since you don't have all day reading about the mundane things I love (some of which, btw, include: Rocky, Indy, SageRock, movies, pizza, cheesecake, running, exploring.) here are the things I don't like: Driving Meetings Zucchini (I like it fine. I'm just allergic.) I think that's pretty much it. My Twitter account is: http://twitter.com/sagerock My YouTube Channel is: http://www.youtube.com/sagerock

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