Are CEOs Looking at Their
Organizations Through Rose Colored Glasses?
To remain competitive and survive, organizations must continue to improve and re-position themselves in their marketplace. Change is the lifeblood of every business and flows through the veins of each organization year in and year out. For some that flow is smooth, for others the flow is clogged in one or more areas.
Where do you start when your goal is to improve the performance of your organization? An excellent initial step is by attempting to understand how your executives view enterprise performance and the web of issues that feed and drive performance.
About the Study
Insight Management Group and Bergeron Associates partnered to conduct a study of executive views on enterprise performance through a web based survey coupled with one-on-one interviews. Over 100 executives participated representing 20 states, and 3 countries. Over 100 questions examined their views and practices used in the areas of:
This article focuses on the different perceptions by CEOs and "Other Executives" towards success and failures of existing practices. As we go through some of the key findings below, you can't help but notice that more CEOs appear to be satisfied and optimistic about corporate performance. Which group has the more accurate view? Are the more optimistic CEOs looking through rose colored glasses or are there other explanations? Let's re-visit this question after reviewing some of the study findings.
Factors Critical to Achieving Strategic Goals
Overall the intensity of CEOs vs. the Other Executives on what is critical to achieving strategic goals is a disparity between the two groups and is visually apparent in the chart below. In all but one factor, CEOs see the factor as more critical.
CEOs and Other Executives agree that Leadership, Vision and Strategic Goals tied to the Vision are the most critical factors to achieving strategic goals.
More CEOs place importance on a workforce prepared to execute plans, project management methodology to get projects done and change prompted by actual performance results than Other Executives.
The category of Project Management had the greatest disparity. It received a relatively low 24% as a critical factor from Other Executives, vs. 48% from CEOs.
Abilities of the Organization
Overall, more CEOs are satisfied with their organization's abilities than Other Executives. Again, this is very apparent in the chart below.
Being able to establish a vision, execute tactical plans and recognize changes based on performance were the areas of highest satisfaction for CEOs (62%). Other Executives' satisfaction level for these same categories was significantly less (40% to 43%). That's nearly a twenty percent differential between the two groups for each category.
The largest area of disparity between the two groups was in the ability to set more challenging targets over time. CEOs at 23% are much less satisfied compared to a moderate 49% among Other Executives.
Other Executives were least satisfied with their firm's ability to implement changes, drill down to understand what is driving results and distinguish key performance indicators from other metrics.
A key message here is from the Other Executives, which is basically we are not satisfied with our ability to execute tactical plans or manage projects and therefore we are not satisfied with our ability to implement change. These are critical components of success for an organization.
Unfortunately, until the CEOs level of satisfaction drops into the range of the Other Executives, the drive for improvement will not be as strong as is needed to drive change in these areas.
Achievement of Strategic Goals
The differences in perspective between CEOs and Other Executives were substantial. Achievement of strategic goals in the Operations and Core Process category was deemed to be the least successful where only 15% of CEOs and 39% by Other Executives declared success.
CEOs are more positive about achieving strategic goals in three out of five categories. Their top three were goals achievement in the areas of Customer, Human Capital, and Finance. Strategic goal achievement in the Customer category was considered most successful by CEOs (81%) and Financial was judged to be most successful by the Other Executives (71%)
While CEOs and Other Executives both agree they are least successful in the achievement of strategic goals in Operations and Core Processes, the overall more positive CEOs were very negative about this category. The biggest difference between the two groups was achievement of strategic goals in the Human Capital or Workforce area with success declared by 67% by the CEOs vs. twenty six point lower score by the Other Executives (41%).
CEOs are consistently more positive about the effectiveness of enterprise performance communications and that may largely be due the significant role CEOs play in those communications.
CEOs appear to be more satisfied with all aspects of employee communications on organizational performance issues. More than half tend to feel that their messages are clearly being articulated to all employees in the categories surveyed: strategic goals and vision, performance targets, actual vs. targeted performance and changes based on actual performance. The Other Executives being closer to staff tend to field more questions from staff about what is going on and hear complaints that the CEO is more removed from.
The one category where communication to all employees was noticeably lower among both CEOs and Other Executives was "Change based on performance".
CEOs are more positive about the effectiveness of employee communications in every category.
Poor Execution and Competing Priorities were indicated as the two Primary Factors that lead to failure to meet Enterprise Performance Expectations.
One difference that really jumps out of the data hovers around unrealistic expectations as a primary reason for failing to meet enterprise performance expectations. CEOs (26%) think their expectations about enterprise performance are realistic vs. almost half (44%) of the Other Executives.
Quote from one respondent:
"It took a company failure for me to appreciate and understand the role of successful project management. Since the implementation of this practice, projects are not started until they are ready, monitoring of projects has alleviated out of budget problems."
Unrealistic Plans and Inadequate Requirements are Primary Factors that lead to failed projects. Most projects begin to fail at the beginning. The problem is that many executives don't see the problems until they are in full bloom when the project is well down the time and cost path. For this reason it is no surprise that CEOs and Other Executives were in sync on these two as being top factors contributing to failed projects.
Starting projects before they were ready came in third for CEOs but Other Executives felt that Inadequate Resources were their top issue. While resources are a visible issue to all levels of management, it is one that impacts Other Executives on a day to day basis. Thus it is not surprising that this category scored higher with them.
Another category that was viewed differently was in Risk Management. This was high on the Other Executives radar screen at 40% vs. a surprisingly low 19% for CEOs. There may be several reasons for this disparity. For instance it is not uncommon for bad news to get filtered as it travels slowly up the management chain. Thus CEOs may not receive important information or it may be presented in a way that it does not register. Whatever the reason, the level of understanding on risk management issues among CEOs warrants improvement.
Overall, the tragedy is that many respondent organizations have staffs that can get projects done satisfactorily and on time. All of these factors have a beginning point and when you trace the problem factor backward more often than not you will end up at the very beginning of the project. This is where both the success and failure of projects start. If more energy was put into assuring a project is really ready, the level of satisfaction can improve in any organization.
Where do you start? Improving project success should start at the portfolio level. It is here that priorities are established, resources allocated, plans are reviewed, risks assessed, etc. to ensure that the project is ready. This can be done by establishing a PMO, improving the overall project management process and educating people including executives, project sponsors, managers and team members.
CEOs have a high level of satisfaction in most categories regarding Investments in the Workforce. The top two on the satisfaction list were Recruiting Skilled Staff and Succession Planning.
CEOs satisfaction levels were consistently higher than Other Executives. Recruiting received the highest level of satisfaction and Core Values and Culture was low at 25%. The biggest area of disparity between CEOs and all Other Executives was in the category of Individual Performance Management. Twice the numbers of CEOs (52%) were satisfied as Other Executives (26%).
Failed Workforce Initiatives
Competing priorities reduce the success of Workforce Initiatives
Overall, competing priorities, inadequate resources, lack of skills, and unsuccessful integration into operations are the primary factors leading to the failure of workforce initiatives.
For the most part CEOs and Other Executives agree except for two factors. The Other Executives group assessed inadequate resources and unsuccessful integration into operations to be significant factors that led to failed workforce initiatives. This is most likely due to the fact that Other Executives deal more directly and regularly with these issues than the CEO.
Additional disconnects between perceptions of CEOs and Other Executives:
So, are CEOs Really Looking at their Organizations through Rose Colored Glasses?
There clearly are distinct differences in how CEOs look at their organization compared to Other Executives. CEOs are certainly more satisfied than the Other Executives about many aspects of organizational performance management. Is it part of their culture to be more positive? Are they removed from much of the detail and the challenges associated with effective execution? Have they been out of the detail too long to recognize problems? Are they focused predominantly on external organizational issues? Although there is probably a little bit of truth in each of these possible explanations, overall we feel that CEOs are not wearing rose colored glasses when they look at their organization, they are simply looking at it from a different viewpoint. Then, what explains their optimistic views?
The Rosy View:
CEOs are the visionaries and the strategic thinkers of the organization. That's their job and their focus needs to be looking ahead, leading the organization. So when we discuss operational issues they are naturally looking from a different perspective.
While they are creating a vision and trying to move their organization towards that vision they are still involved in operational issues and therefore it is critical for them to have a crystal clear view of the organization. For many CEOs their view of operations is primarily based on what is presented by their staff's, but does the presentation result in a crystal clear view or is it delivered with a rosy tint?
From our experience, it is more likely that some of the operational staff may be holding up a rose colored window for the CEO (and Board) to look through. While the Operations Staff live in the midst of day to day problems, what they often offer up to view is a rosier picture than reality.
So how did the rosy view get delivered? Basically problems and bad news get filtered or tinted at every level on the way up the chain. The amount of tint will vary based on several factors, but in general it will be less than crystal clear views. The result is the CEO has a rosier picture of the organization, but not because of their glasses, but rather the window through which they look at their organization.
The Key Message?
Most organizations are not happy with their performance. To be more competitive they must change, and to change they must learn how to do a better job of implementing change. In order to implement change they must learn how to better manage projects and portfolios to avoid the self-inflicted wounds or sabotage that innocently are introduced into those investments. They must also do a better job of preparing their workforce to meet organizational and project challenges through better individual performance initiatives and employee development.
If CEOs want to ensure they have a crystal clear view of their organization they need to delve deeper into the organization, ask better questions, and periodically get independent objective assessments. In reality there is little time for a CEO to do that for everything going on, so the key is picking the right areas to spot check.
The Operational Executives need to take the same steps to ensure that the information they receive is crystal clear and to not put their rosy tint on information when they pass it along.
The Bottom Line: In order to perform better, organizations must change.
With disciplined processes and performance metrics in place, the rose tint will wash off so all executives will know what needs to be changed. With that base of knowledge, the opportunity to really improve is created and performance can soar to new heights.
Charles Perry is co-founder of Insight Management Group - experts in Project Management and Change Management. Charles has over 30 years experience helping organizations improve themselves through change. He has been published and quoted in leading business publications and can be reached at (401) 447-7517, firstname.lastname@example.org or via website: www.insightmanagementgroup.com .
Carol Bergeron is founder and president of Bergeron Associates™ - human capital management and organizational performance improvement consulting. Carol, with over 23 year's experience, is an experienced consultant, instructor and author and can be reached at (781) 376-4071, or www.bergeronassociates.com .
Researcher and Editor Pat Kirton PMP is co-founder of Insight Management Group. Pat has over 30 years experience in IT and Project Management. She can be reached at (401) 447 5911, Kirton@insightmanagementgroup.com or via website: www.insightmanagementgroup.com .
Many more articles in Executive Performance in The CEO Refresher Archives