When the CEO role becomes more operational than strategic

It rarely happens overnight. At first, it may involve helping the organization move forward or solving urgent problems. But over time, it becomes more operational than strategic.

The issues that are most critical to a company’s long-term development—business strategy, market position, innovation, and the relationship with the board and shareholders—are given less attention than they deserve. The question many CEOs eventually ask themselves is: Has the organization become too dependent on the CEO?

In many organizations, this is a natural consequence of growth and change. As the business grows, complexity increases. More customers, more projects, and more employees mean more decisions and more issues that need to be coordinated. At the same time, the organization’s structure does not always evolve at the same pace. There are a few recurring causes.

• Unclear Roles and Mandates
  When responsibilities and authorities aren’t entirely clear, many issues get escalated up the organizational chain. Eventually, they end up with the CEO.
• The management team is more of a forum than a team
  It is not entirely uncommon for the management team to focus primarily on reporting. Managers report on what is happening in their areas, but the group does not work together to drive key issues forward.
• Too Many Initiatives at Once
  In today’s fast-paced environment, it’s easy for organizations to launch more projects than they have the capacity to carry out. When priorities become unclear, the responsibility for coordinating and making decisions often falls on the CEO.
• Lack of operational capacity within the organization
  When certain functions lack resources or structure, someone needs to temporarily fill the gap. In many companies, that person is the CEO.

Each of these factors can be managed on its own. But together, they can gradually create a situation where more and more issues are concentrated on one person: the CEO.

In the short term, an operational CEO can work well. Many companies have grown rapidly thanks to strong and committed leadership from the top. But over time, this situation creates several challenges.

• Strategic issues take a back seat
  When the calendar is filled with operational meetings and internal decisions, there is less time for business development, marketing issues, and long-term strategy.
• The organization becomes more dependent on individuals
  When many decisions are concentrated in the hands of a single person, the organization becomes less autonomous. The pace of decision-making and change risks slowing down.
• The management team is developing more slowly
  If the CEO frequently gets involved in operational matters, it limits the opportunities for other leaders to take responsibility and grow in their roles.
• Change initiatives are losing momentum
  Projects and initiatives that lack clear ownership risk stalling or requiring more oversight from the CEO than is actually sustainable.

The result may be that the organization continues to grow, but the structure supporting its operations does not keep pace.

There are some clear signs that the organization has become more dependent on the CEO than is sustainable. Here are a few of them:

• Operational decisions often fall to the CEO
• The management team is waiting for guidance before taking action
• Decisions are taking longer than they should
• Change initiatives are losing momentum

When this happens, the challenge is rarely a lack of ideas or new initiatives. Rather, it comes down to the organization’s ability to implement what has already been decided. How responsibilities are allocated, how the management team functions, and how initiatives are driven within the organization greatly influence how hands-on the CEO’s role becomes.

In our guide “How to Free Up Time for Strategy as a CEO” we describe some approaches that many companies use to create more room for strategic leadership.

Want to quickly get a sense of how dependent your organization is on the CEO role? Then download the checklist: “10 Signs That Your Organization Is Too Dependent on the CEO.”

It can provide a quick indication of whether responsibilities and authority within the organization are distributed in a way that creates room for strategic leadership.

Every company benefits from strong leadership commitment. But if the organization grows without the structure evolving at the same pace, it will have a negative impact on the business.

In such a situation, you may choose to temporarily strengthen your organization by bringing in a senior external resource—an experienced interim leader who can provide structure, momentum, and the ability to get things done for a set period. This also frees up the CEO to focus more on the company’s long-term development.