Before starting American CEO Peer Groups, I was part of a group myself called Inc. CEO Project, led by Jim Schleckser. He had valuable ideas about how CEOs should spend their time through the concept of the five hats a CEO should wear to maximize their impact on their organization. I will summarize and comment on his ideas and add one additional hat that I think is also valuable.
THE PLAYER HAT
The first hat is the player hat, which can be both a curse and a blessing depending on how you wear it. It is comfortable to wear because it allows CEOs to do what we’re great at, whether that’s sales, engineering, marketing, or whatever. Most CEOs have gotten to the role because they excelled in a certain area of the business. Since we’re that good, we can make a significant contribution to the business. There are multiple problems with this, including failing to evolve and tackle the unique challenges of the CEO role itself. Though there are exceptions, the key is finding a way to get out of player mode and bring talent and systems in to execute the same things that you would do as a functional executive.
THE ARCHITECT HAT
Next is the architect hat, one of the most important roles for a CEO. It’s all about business model design because you are working on the strategy of your business. You are focused on your product and market, answering questions such as: Who is the customer? What problem are we solving? How do we make money? In the early stages of a business or when introducing a new product, you will need to spend large amounts of time in the architect role. Getting this role right is so important that you must make time for it on a regular basis. Even in a business with a well-established strategy, I would still reserve at a minimum one full day every quarter to review and think about strategy. At other times when things are changing rapidly, the right answer may be to spend time every day in this role. If you make good decisions in this area, everything else becomes a little easier.
THE ENGINEER HAT
The next hat is the engineer hat, which has to do with the process of delivering value to your customers. As the company grows, you need to make investments to run more efficiently and reinforce your value proposition by creating processes and systems. This gives you a true competitive advantage. On the other hand, failure to have more mature systems and processes will inhibit your growth. The engineering process is analytical and involves defining a goal, creating metrics related to the goal, analyzing those metrics, and improving the process. This continuous cycle of improvement is critical to building a high-performance business and culture.
THE LEARNER HAT
The learner hat is one of my favorites. French author Francois de la Rochefoucauld observed “the only thing constant in life is change.” Great CEOs understand this and are constantly trying to improve and expand their knowledge inside and outside of the business. Inside the business, focus your learning on your products, customers and competitors. It is easy for CEOs to lose contact with these areas if they don’t force themselves to devote time to each. Scheduling at least one extended customer visit per quarter and attending a couple of industry trade shows every year are good ways to improve your knowledge inside the business. One of the best ways to have breakthrough ideas is to look outside your industry. This can mean focusing on a wide array of topics, from economics to basic research, or using CEO peer groups like American CEO to add to your knowledge. The two keys to any peer group are the quality of the leader and the individual members.
THE COACH HAT
Readers of this blog know how important I believe the CEO’s role is in finding and recruiting talent. This is what the coach hat is all about, and it is one of the highest value roles because you are investing in finding talent that pays you greater dividends over time. The role of a coach is to get the maximum performance from everyone on the team. CEOs should identify areas for improvement overall as well as the employees who need to hone their skills or be replaced. This starts with spending time with your direct reports. A weekly one-hour session with each one is an important time to provide insight and direction that should lead to increased performance. Additionally, work with your executive team to identify areas of the business that need additional talent. This is critical for success, particularly in a fast-growing organization. Find out from your direct reports who the top talent is at lower levels in the organization so that they can be groomed for future leadership positions.
THE PRIEST HAT
The sixth and final hat in this series is one I am adding: the Priest hat. I was reared Catholic, so I use the term priest, but feel free to substitute your own term for spiritual advisor. While wearing the Priest hat, you are concerned with the morale of the organization. You are trying to make people feel good. One of the best ways to assume this role is to go out and talk to your employees. I am a big proponent of management by walking around, and when I do this I am often wearing the Priest hat. Any time you have a large number of people on a team who care about what they are doing, there will be times when tempers flare or personalities clash. This is a natural part of human interactions, but the CEO can often play a particularly powerful role in maintaining strong morale. Often employees will want to tell you about their problems or frustrations that are occurring in their jobs. I have learned that often the best thing to do is just listen and ask questions to make sure you understand the source of the frustration. Once I think I understand the cause of the problem, I usually coach the employee on how they can work within the organizational structure to achieve the results they desire. I believe that by wearing the Priest hat, I heard about many small problems before they could escalate to a serious issue. Building trusted relationships with front-line employees is invaluable to a CEO and can prevent bigger problems from developing in the organization.
To be great, the modern CEO must have tremendous influence over their organizations while in some sense seeming to do very little. How CEOs should spend their time has been the focus of this blog. Of the six roles discussed, architect, engineer and coach are very high value because they set the stage for the continued growth of the business. CEOs should spend at least half their time in these three roles, depending on where the business is in its evolution. As Jim states in his paper titled Five Hats: The High Leverage Roles of a CEO: “Really excellent CEOs spend 35-50 percent of their time in a high leverage role by minimizing all other activities.”