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Wednesday, 28 July 2010

Why CEO’s fear 21st Century Firms

I have worked with CEO's during job changes, even gone in with them during their first few weeks in the new job. They call the top Team together; go through the numbers, then look to make changes big or small.
Compare this to when I take over a new sales force it really is months before I am comfortable with changes. It takes 2 months to master the Product/Market, one more month to have a quarter years meaningful figures to act on. During that quarter, I expect to see improvement every month and on target by quarter end.
So, why is it the CEO can act quicker than the Sales Director can? It has to do with company design. Most Firms, 99% or more, are based upon Strategy, Structures and Systems developed before 1970. They have run in the same way for 40 years. How power is distributed, resources allocated, budgets set, compensation awarded and most importantly HOW DECISIONS ARE MADE. The patriarchs of Modern Management decided it all: Taylor, Fayol, Peters and Porter, Top down Management.

So, what changes in 21st. Century Firm? DECISION MAKING is distributed. The person or Team nearest the decision point solves the problem or takes the opportunity and makes the decision. Top Management moves from constraint to enabler, from power centre to power distribution. This is not Consultation, it is delegation of authority. Its fast, it is agile and to many CEO's, especially those who believe in Command and Control, it is scary!

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