The version of ISO states a concept of shared leadership, making it so that everyone understands their own importance within the management system.
It is not an easy task, but those responsible for this role will certainly spread this effort to achieve successful results for the company, establishing and guaranteeing a management system that interacts with the strategic decisions of the business.
Camilla Christino. She is also certified as a leading auditor in the ISO Subscribe to our Newsletter and get content about corporate management's best practices produced by specialists. By clicking the button below, you confirm that you have read and accept our Privacy Policy.
All Content. February 22nd, Enterprise Quality , ISO Enterprise Quality ISO A planning system will then produce a lot of paperwork but very little strategic guidance for the business. The allocation of capital comes to be seen by managers as a corporate expression of confidence, affection, or love.
The responsibility for developing a strategically rational philosophy should fall to a chief strategic officer. But who is the CSO? Ideally, the CEO should clearly be designated the chief strategic officer. This responsible individual sets the strategic plans of the corporation and submits them to the board committee for discussion, debate, approval, or modification. Although we often assume that the CEO is indeed the chief strategic officer, he is hardly ever identified as such—in the way that the chief operating officer or chief financial officer is usually identified.
The function often falls between designated responsibilities; strategic issues are not addressed. Although the CEO is the most natural choice because of the importance of the job and the power it requires, he must make the conscious decision that he himself will be the chief strategic officer and make that clear to the management and the board. To prevent such suppression, the strategic officer must work directly at the level where alternatives are first considered so that he can understand the situational analysis and identify the choices that he would like to see survive long enough to be dispassionately studied.
It is for these reasons that I say the CEO must make a very deliberate decision that he can and will devote the necessary time and discipline to be truly the chief strategic officer. This decision requires of him an involvement at lower organizational levels especially in a large diversified company than is customary in his other supervisory responsibilities.
If his other work and management style do not match these requirements, he should delegate the duties, title, and power to another officer.
This individual should be at least equal in organizational responsibility to the chief operating officer. We know that delegating title and duties like these to a staff function without power will not work. It is essential also that the chief strategic officer have control over the resources required to effect change. Most often, but not exclusively, the critical resource is capital funding. It is of course true that the chief operating officer often by default falls heir to responsibility for strategy when the CEO finds himself too busy to devote the necessary time to it.
It is an easy delegation, because it takes advantage of organizational lines to ensure lack of conflict between strategy and execution. The disadvantages, however, are massive. First, the need to be selective in denying some applications for resources and persistently seeking out others presents a conflict in management style in situations where the need is that the chief operating officer be supportive. Second, a fundamental conflict between what is easy to execute and what is right to execute often leads the chief operating officer away from the tougher decision.
Sooner or later the chief strategic officer, whoever he may be, must submit the proposed strategic philosophy or corporate strategy to the corporate objectives committee of the board for discussion, debate, modification, and, ultimately, approval. If the two steps I have recommended are carried out, the board committee should be able to arrive at a reasonably clear idea about the broad objectives of the company and the philosophical framework for evaluating a succession of much more specific strategic decisions.
To develop more specific business strategies for board consideration and, even more important, to make the strategic process work within the company, the chief strategic officer proposes to the committee the strategic guidelines for each business unit and thereafter makes them clear to the strategic business unit SBU management. The following guidelines to me are the most important:. By accumulating this information from most competitors, the chief strategic officer can get a quite accurate idea of the range of returns within the industry being examined.
Then the officer picks where he or she should be in that range, depending on the relative cost effectiveness. From an organizational point of view, the importance of these strategic parameters is that they give the business units an understanding of their mission and make it possible for them to be more efficient in developing their long-range plans in a manner that will be acceptable to the executive management.
Most senior managers too many times have had the experience of receiving a long-range plan from a strategic business unit that is unbelievable, unacceptable, or unfundable. Often the time cycle is so short before the plan must be wrapped up that there is no chance to return to the business unit for correction.
The end result is usually a plan which goes into the bottom drawer to gather dust. The importance of this process to those directors who are or are imagining themselves to be on a board objectives or strategy committee is that now they have some basic information to which they can relate management recommendations for capital investment.
As a CEO and board member, I have listened to business unit leaders outline long-term strategies to gain market share with no thought to how competitors might respond.
You can be sure that they will. How will they respond, and how will the company defend against their response? Not shedding a losing strategy. Much can be learned from entrepreneurs and their mindset. How do entrepreneurs face the specter of failure?
They pivot and pursue another strategy, another idea. Because resources are limited, and they are forced to move on. Established companies should exercise the same discipline. Failure to recognize that some leaders may need to be replaced. Members of the current senior leadership team of the company may not have the experience, skills or mindset to execute the strategies or achieve the objectives of the strategic plan.
Directors, ask penetrating questions so CEOs and the senior leadership team are more effective at developing objectives and strategies. Monitor progress, and hold the CEO accountable for results. He is a speaker, advisor and nationally syndicated columnist on leadership, entrepreneurship and corporate governance.
He can be reached at Stan SilvermanLeadership.
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