Save on your hotel - hotelscombined.com

Executives should only have two jobs, and neither is setting strategy


  • Avery Pennarun is a software engineer, executive consultant, and cofounder of Tailscale.io.
  • He discovered that the role of an executive was well-defined in the 1980s, by Andy Grove of Intel fame. 
  • The two jobs of an executive are to ratify good decisions, and define and enforce company culture/values. That’s it.
  • Visit Business Insider’s homepage for more stories.

An executive with 8,000 indirect reports and 2000 hours of work in a year can afford to spend, at most, 15 minutes per year per person in their reporting hierarchy … even if they work on nothing else. That job seems impossible. How can anyone make any important decision in a company that large? They will always be the least informed person in the room, no matter what the topic.

If you know me, you know I’ve been asking myself this question for a long time.

Luckily, someone sent me a link to a really great book, “High Output Management,” by Andy Grove (of Intel fame). Among many other things, it answers this key question! And insultingly, just to rub it in, it answered this question back in the 1980s.

To paraphrase the book, the job of an executive is: to define and enforce culture and values for their whole organization, and to ratify good decisions.

That’s all.

Not to decide. Not to break ties. Not to set strategy. Not to be the expert on every, or any topic. Just to sit in the room while the right people make good decisions in alignment with their values. And if they do, to endorse it. And if they don’t, to send them back to try again.

There’s even an algorithm for this.

It seems too easy to be real. For any disagreement, identify the lead person on each side. Then, identify the lowest executive in the corporate hierarchy that both leads report into (in the extreme case, this is the CEO). Set up a meeting between the three of them. At the meeting, the two leads will present the one, correct decision that they have agreed upon. The executive will sit there, listen, and ratify it.

But … wait. If the decision is already made before the meeting, why do we need the meeting? Because the right decision might not happen without the existence of that meeting. The executive gives formal weight to a major decision. The executive holds the two disagreeing leads responsible: they must figure out not what’s best for them, but what’s best for the company. They can’t pull rank. They can’t cheat. They have to present their answer to a person who cares about both of their groups equally. And they want to look good, because that person is their boss! This puts a lot of pressure on people to do the right thing.

(Side note: this has parallels with the weirdly formal structures in eg. Canadian parliament, where theoretically all decisions must be ratified by the seemingly powerless Governor General, who represents The Queen by just always ratifying everything. The theory is that if the decisions were bad, they wouldn’t be ratified, so there’d be no point proposing them, and therefore all the decisions proposed are worthy of ratification. Obviously the theory doesn’t match the practice here, because bad decisions get ratified, but it’s nice to think about.)



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *