The Demanding Role of The Chief Executive
13 March 2009 Mike Hudson
In an extract from his book Managing Without Profit, Mike Hudson examines the pressures and demands on the ever-changing role of the chief executive.
Over the last 30 years, the role of senior paid employee of third-sector organisations has changed dramatically. The post used to be called ‘general secretary’ or ‘clerk to the council’, and the role was seen as being the administrative servant of the board. The post-holder was given comparatively little strategic authority and governing bodies took a hands-on role because most organisations were small.
During the 1970s, the title ‘director’ started to creep on to organisations’ letterheads, reflecting a change in the duties that the board expected the officeholder to discharge. In the 1980s the language and the role changed again. Organisations began to seek ‘chief executives’. They wanted people with substantial management experience who could take charge of these increasingly large and complex organisations.
It is now widely accepted that having a talented chief executive is a critical ingredient of a successful organisation. Chief executives are expected to be figurehead, politician and manager all rolled up in one person. They have to deploy a combination of managerial, entrepreneurial and political skills. They need management skills to get everyone to work together towards achieving common goals. They need entrepreneurial skills to take risks and seize opportunities, attributes that are usually associated with the private sector. They also need the ability to unite diverse political constituencies behind activities that everyone is willing to support – a skill that is more often associated with public sector management.
The job is demanding, both mentally and physically, but it is also immensely satisfying. Effective chief executives are rewarded with the knowledge that their work has a huge effect on the lives of the organisation’s users, its staff and its volunteers.
However, the burden of leadership should not fall on the chief executive alone. A clear distinction has to be made between the ‘leader’ of an organisation, the person who holds the most senior position, and ‘leadership’, a function which should be shared by all levels of the organisation. The leader is the person who has most responsibility for providing leadership of the organisation as a whole, but managers and staff at all levels can contribute by providing strong leadership of their divisions and departments. Indeed, the board also contributes by giving strong leadership to the governance of the organisation. In this notion of ‘distributed leadership’ everyone has responsibility for the leadership of their areas and for contributing, in large or small ways, to the leadership of the organisation as a whole.
The modern view of leadership is that leaders are expected to possess high levels of emotional intelligence. This is not to suggest that leadership is all about relationships, but to stress that investing time and energy in developing and maintaining open and trustworthy relationships with the board, the leadership team and other stakeholders is an essential part of the chief executive’s job.
Distinguishing management from leadership
The concepts of management and leadership are closely related and they overlap. However, in unpacking and describing the special contribution made by chief executives, it is helpful to make a distinction between the two functions.
Management is concerned with the efficient administration of the organisation. It is about the establishment of processes that make the organisation work, the creation of structures that link people together in an organised way, the development of plans, the control of budgets and the costing of services. Chief executives have to master all these and more.
Effective chief executives have to rise beyond management and provide leadership. Leadership is what clarifies the mission, motivates people, seeks new opportunities, gives organisations a sense of purpose and focuses people on the task.
This is not to suggest that management is all boring administration and leadership is the enjoyable activity. Organisations need an appropriate combination of management and leadership for their circumstances. Those that are over-led and under-managed can be exciting places to work, but they may not have the practical capacity to deliver the work. Those that are under-led but over-managed may be capable of doing the work, but they are eventually overtaken by imaginative organisations with the flair and creativity to take entirely new approaches to achieving their missions and inspiring their people.
Effective chief executives understand the difference between being a manager and being a leader. They strive to delegate managerial tasks so as to create the time they need to be the leader. They manage their time in such a way that they can turn their attention away from the daily deluge of seemingly urgent activities and on to the important task of providing leadership.
Special characteristics of the chief executive’s job
The role of the chief executive is very different from all other posts.
It is less structured. Being responsible for everything the organisation does means the chief executive can become involved in anything. This lack of boundaries differentiates the job from all other posts. The range, scope and wide responsibility of the job mean that there is an almost limitless opportunity to be ineffective unless chief executives are totally clear about how they are going to set about the job.
It is highly exposed. Chief executives have nowhere to hide. They are expected to speak in public, to make press statements, to report to the board, to make presentations at gatherings of staff, and to approve publicly available documents. Chief executives are on stage every day of their working lives.
It requires the widest range of abilities. Chief executives need to master an extraordinary range of skills. They need to understand the fundamentals of finance, marketing, service and human-resource management; they are expected to deploy strong inter-personal skills and at the same time master the policy issues of their field; they need consummate political skills to make things happen; they need to be tough when hard decisions have to be made and tender when compassion and sensitivity are required.
It involves the widest range of constituencies. Chief executives have to operate with many different groups, including funders, service users and umbrella organisations, as well as staff and board members. They have to adjust their style and approach to suit groups that often have different interests and different motives for contributing to the organisation.
Key relationships requiring active management
It is a lonely position. The chief executive often has no one inside the organisation to seek advice from on sensitive issues, because the act of raising them can cause unnecessary anxiety, particularly if the ideas are not subsequently pursued.
It depends on maintaining a reservoir of goodwill. Chief executives need the trust and active support of their board and their staff. They have to maintain the confidence of both groups in order to do the job.
It is the critical link between the board and the staff. Chief executives have to operate effectively both as head of the leadership team and as the servant of the board. These two groups frequently have different working styles and priorities. Chief executives have to work with both and manage the information flows between the two.
It requires a long-term perspective and short-term actions. Chief executives have to think years ahead, and simultaneously solve current problems that have not been resolved elsewhere in the organisation.
Three further aspects of the role are common in managing third-sector organisations.
The position is not well understood. The special characteristics of the chief executive’s job are sometimes not well understood by the board, the staff or other people outside the organisation. This results in conflicting expectations that can pull chief executives in different directions.
Chief executives have to bridge many fundamentally different value systems. Third-sector organisations tend to have a skill-base such as medicine, education and social welfare. Each skill-base is associated with a set of values that are predominant in that field.
These values are seldom consistent with a managerial mindset. The chief executive has to bridge the different values and help each group see the organisation and its issues from the other’s perspective.
Sometimes chief executives have to challenge inappropriate values. Modern management textbooks (including this one) stress the importance of the organisation’s culture and values. But values can also be a source of difficulty for the chief executive, when they permeate all aspects of an organisation’s work in ways that are inappropriate. Take, for example, the training organisation whose commitment to training its own staff grows out of proportion to their need to perform their jobs; the trade union that is frightened to challenge the union that its own staff belong to; or the social-services agency that cannot bring itself to sack members of staff who are consistently not performing to the required standard. In these circumstances, it falls to the chief executive to challenge the inappropriate application of values and beliefs.
The third edition of Managing Without Profit, £24.95, is available from www.dsc.org.uk.