The Operations Question: What is the CEO to do?

The Operations Question: What is the CEO to do?

Wikipedia defines operations management as being concerned with overseeing, designing, and redesigning business operations in the production of goods and services. The goal is to ensure maximum efficiency throughout all departments by using as few resources as possible while still meeting and exceeding the expectations of the customer. Notice that the idea is clear: to design operations and put them into motion. For the purposes of being an effective CEO, the temptation to try and be more than a designer and leader of the operations of the whole organization should be avoided.

In his book the “E-Myth”, Michael Gerber laid out a compelling case for a highly systematized and rigorous organization structure. The point being, according to Gerber, is that operations must truly operate. Gerber’s pie business example is indelible in the minds of anyone who has read the book. Basically Gerber’s position is that the business is not truly a business unless it can function on without direct involvement in operations by the owner.

For the CEO of any business, but especially larger vertically integrated (fancy term for lots and lots of people underneath you with different levels and jobs), the question of operations and his involvement is one that entails multiple considerations. How the CEO proceeds is an indicator of his perception of the strength of the business. It is also a strong statement on his confidence in other members of the organization.

Substantively there are two extreme poles: fully hands off delegator/borderline figurehead and micro-manager. In between there are too many styles to count. Some that work in one situation for a certain CEO personality type, may not work well in another organizational situation. If we are talking a start-up or an established company with an ingrained hierarchal structure, the CEO is likely better served to strive for fully hands off as an ideal. Don’t worry about losing control. Fully hands off in practicality will never be achieved. The larger danger exists when the CEO shades more towards too hands-on in day to day operations-related activities.

The main reasons this too hands-on approach is bad are: 1. Such an approach is often an avoidance tactic by the CEO to not sit down and think through the operations structure. It is this structure that is the long term answer for the organization to really flourish. 2. Being too hands-on can hurt morale within the company. Basically you are giving a vote of no confidence to the people working under you in the organization. “If you want something done right, you have to do it yourself” is not a winning credo long-term for a CEO. A CEO must drive the creation of the systems, think them through painstakingly, lead the creation of the training structure, oversee the hiring of the key management, and then be willing to keep adjusting.