In the classic film, Back to School, Rodney Dangerfield portrayed a very successful CEO who went back to school to help his discouraged son get through college. Rodney’s character was a fun-loving, obnoxious businessman who cut corners and bribed others to fulfill his schoolwork obligations. However, what Rodney eventually learned was that the OLD WAY of doing business was fading. Almost 30 years later, the same lesson applies: it takes a broader set of skills to achieve and maintain success.
In similar fashion to Rodney’s character, two great chief executive officers John D. Rockefeller and Andrew Carnegie, found ways to prosper. Their achievements were driven more by their aptitude to use their own business instincts, not using much input from others. They found the ability to adapt and implement new innovations which would outperform their competitors. Their individual drive and dedication to find these modernizations made them rich. Times were different. Regulation and public scrutiny was not as fierce as it is today; there was little reliance on teamwork and employee satisfaction.
Carnegie made his fortune in the steel industry, as he controlled the most extensive integrated iron and steel operations ever owned by an individual in the United States. One of his two great innovations was in the cheap and efficient mass production of steel by adopting the Bessemer process for steel making. The second was in his vertical integration of all suppliers of raw materials. In the late 1880s, he was the largest manufacturer of steel rails and coke in the world. Rockefeller was the first American to attain a net worth more than a billion dollars and at one point, he controlled 90% of all oil in the United States. His ingenuity of borrowing and reinvesting profits, controlling costs and using refineries’ waste revolutionized the petroleum industry.
The CEO today has to think more rationally than in the days of Rockefeller and Carnegie. Communications and technology transport at such a rapid pace, that if not planned, reported and executed properly, can destroy a company. It can be a lonely place at the top, with CEOs under greater public scrutiny than at any other time in history. The CEO must grapple with the future direction and prosperity of their business, inspire confidence and lead by example. Business leaders are at the heart of ensuring that sustainability is embedded within a company’s culture throughout the organization. Modern chief executives have a relatively short time to make an impact and create transformational change within a business. Responsible leadership is about more than the individual at the top; it is about embedding the right values and approach to business throughout the organization. To leave a positive legacy, CEOs must also think about how they are equipping people at all levels within a business to carry the baton and act as advocates for a responsible approach to business.
Innovation and teamwork are the power skills in today’s business. Innovation, in its purest sense, is a tough mission to accomplish. To facilitate impactful changes requires commitment and campaigning from the CEO. The ability to promote internal innovation is completely dependent on the openness and willingness of both the CEO and the executive team. In many instances, a CEO is faced with staff that is already inundated with day-to-day challenges. Overloaded teams can be dismissive of new ideas, as they may believe they do not have the time to execute on additional work. When a CEO clearly sets the innovation agenda and achieves the desired results, the next hurdle for implementing change is the company structure and its employees. If innovation is the path for the company, it must be aligned with the capabilities and strengths of both the executive staff and employees. To be effective in implementing change through the innovation process, the CEO must be tough-minded and ready to make all required calls in structure and employees to allow the changes to take hold.
The CEO should never confuse risk and fear. Every decision has certain risks. Be prepared to articulate, understand and quantify the risk, but don’t let risk become fear. Fear can result in inaction. No action can be the end of a promising career. Embrace and promote your culture. The culture of your business beams through your employees and customers. Be as intentional as possible to develop and promote your culture, so that it makes you less vulnerable to your competitors.
Never be afraid to fail. It sounds like an old cliché. A CEO must often shape direction and strategy where the outcome is uncertain.
Written by Mark S. Carrow, CPA, MS for 2015 CEO Evolution - Philadelphia