Usually, the CEO initially takes a bipolar approach to empowerment: still micromanaging (which can result in the team’s paralysis and lack of ownership, as they wait for the CEO’s direction) or complete delegation (which can result in the team pursuing non-critical missions). It takes time for the CEO and the execs to develop the right balance and trust. The CEO also needs to develop (i) a “passive sonar” system (which allows the CEO to observe the critical events without being noticed) and (ii) a way to influence the team in the background (so the empowered exec does not lose authority and motivation).
Micromanage (paralysis) ßà Passive SONAR + Background influence ßà Abandonment
Coordination of these silos will soon become a major challenge, because empowerment will result in organizational silos. In fact, successful empowerment creates stronger silos. I had a great conversation with Amitabh Sinha about the difficulties of coordinating silos. Usually, CEOs try to coordinate silos (or business units) through financial metrics and other KPIs. They help, but don’t address the root cause. The CEO needs one simple vision to unify the silos. In technology companies, that vision could be one unifying product architecture. For example, promoting every Apple product to have the same look and feel from the user perspective. Amitabh believes the organizational structure must be consistent the underlying product architecture. Another unifying vision could be targeting the same teaching customer.
Vision and culture for all employees. As the CEO manages the company by empowering executives within his effective span of control, the CEO still wants to communicate with all employees without undercutting his executives' empowerment. One method is to promote vision and culture. This way everyone knows where the company wants to go and why. This helps each employee do the right thing from the CEO’s perspective, even if the CEO cannot talk with each employee personally.
Vision usually comes naturally to every founder CEO.
Culture is more complex. According to Wikipedia, “Organizational culture is the behavior of humans who are part of an organization and the meanings that the people attach to their actions. Culture includes the organization values, visions, norms, working language, systems, symbols, beliefs and habits. It is also the pattern of such collective behaviors and assumptions that are taught to new organizational members as a way of perceiving, and even thinking and feeling. Organizational culture affects the way people and groups interact with each other, with clients, and with stakeholders.” Wikipedia I find culture best created through the company’s folk heroes and losers. These role models translate the company’s abstract culture into something very simple for everyone. So, CEOs can get tremendous leverage by creating the right heroes (like George Hu below).