Do you have the right executive structure?

Have you done yourself out of a job? Do your executives make the decisions for you? If not, you haven’t got the right structure, delegation, accountability or consequences.

Yes, I know it’s hard to think about – you not doing everything or being responsible for everything. But that’s the end goal! The goal is to have your executives or managers operate and be accountable within their delegations.

So, how do we get this right?

The CEO

The CEO must report to a board chair. The CEO then makes decisions within their accountability, delegations and scope of employment, and if it’s out of their range, they’ll go to the governance board for decisions.

The CEO also needs to advise the board of the decisions they make. These may simply be matters for noting. But the CEO and board must be clear on the difference between matters for a decision, matters for discussion and matters for noting.

Executive team

Most organisations today have a Chief Executive Officer. Underneath the CEO, the executive team structure includes a Chief Operations Officer, Chief Financial Officer, Chief Human Resources Officer, and Chief Marketing and Sales Officer.

Sometimes, the Chief Operating Officer will have all the other positions report to them, and the CEO will only have one position reporting to them – the Chief Operating Officer.

It doesn’t matter what structure you have; what matters is how you manage it, how you hold positions to account, and how you make it work.

It goes back to the 60-30-10 rule: 60% of what executives do should be focused on the next 12 months, 30% of what they do should be focused on 12–36 months, and 10% of what they do should be focused on 36+ months. If you’re not spending the right amount of time in those areas, something’s not right with your workload.

What activities should you stop, start or keep?

It’s important you continually look at how you spend your time, and how you could spend it better. This means examining your reporting, accountability and delegation structures.

I recently met with the CEO of an $8 million business, who complained about the $5,000 spent on birthday cakes each year. When I asked him what the budget for reward, recognition and employee development was, he looked at me blankly. Typically, it’s $1,000 per employee. So, he should have had a budget of $50,000, yet he was complaining about a $5,000 spend.

What are your delegations? What’s your staff accountability, and who can make what decisions? Do you spend too much time analysing the wrong numbers? Remember, what you measure matters. So, too, do birthday cakes, because they’re about employee morale and engagement. Instead of worrying about cakes, perhaps you should spend more money on ensuring your managers can manage effectively?

How many direct reports do you have reporting to you? The preferred number is anywhere between three and seven. That way, you can spend one-on-one quality time with each of your direct reports, upskilling, mentoring and managing them. They should then do the same with their reports, and so on. If you’ve got too many direct reports, you won’t be able to upskill and manage them as effectively as you could.

So, who do you focus on? Who reports to whom? What’s your delegation, accountability and consequences?

If you’re not sure, email me at [email protected].

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