Many of us are managers but few of us ever become C-suite leaders and more specifically a CEO. But imagine if you just became a new CEO, and it is of a very troubled company. I wrote my monthly column about this for the web portal Information Management titled “Now, You are the CEO.”
I suggest you now click on my article’s hypertext and read it.
I received several e-mails about the article. Many of them were stimulated by the observation that research has revealed that the major influence for successful strategy execution does not come from shuffling boxes in the organization chart. Rather it comes from clarifying decision rights for managers and employees who are often confused if they have the power without seeking approvals to make certain types of decisions.
Employee empowerment can go a long way to generate innovation and test new ideas.
In a long business career I have found myself sitting in the CEO chair as a troubleshooter on a few occasions. Readers may be interested in one experience.
WHERE DID THE MONEY GO?
I was called in at short notice to act as CEO. The first thing I did was to compare the cash position with the forecast. I found a $500,000 shortfall, so I called in the General Manager. He had no explanation, so I called in the auditors to investigate. It took 6 weeks to find the reasons. The difficult one to find was failure to invoice $250,000 of export orders to Japan; difficult because it required extensive matching of shipping documents to the sales ledger, and there were few clues as to where to start. When we asked for the money, our customers responded immediately. The Japanese were confused and honest. We were sincere in our apology and thanks for their remittance.
The second was easier to find; frequent stock outages for hot selling items had led to junior purchasing people placing excessive orders for airfreight deliveries from Europe at huge cost. The seafreight purchasing system had broken down, and the electronic stock control system was unreliable. The overspend was around $250,000, and was not recoverable.
This was harder to fix and required a trip to Europe to align our buying system with supplier lead times.
The biggest impact for employee morale was the resignation of the General Manager. They knew he was incompetent, but despaired of executive action. They responded to the challenge of more responsibility, and business performance improved because the business started to use the few simple KPIs we had put in place.
My learning: use the numbers, find the problems, and above all ACT on what you find.