RSM Resources

A difficult issue all chief executives face is howto allocate time for setting their company’s strategic direction whileoverseeing day-to-day business operations. The task has never been an easy one,but the recent slew of corporate accounting scandals has made maintaining thisbalance harder than ever.

While regulatory pressures mandated by theSarbanes-Oxley Act of 2002 (SOX) make strategic leadership especially difficultin publicly held firms, all CEOs face a more challenging business landscape.According to the New York City-based Reputation Institute, the public’s trustof business leadership has slipped for five consecutive years. For that reason,many privately held companies and not-for-profits are voluntarilyadopting SOX requirements, or pursuing similar compliance measures in anattempt to boost public and customer confidence.

But the more CEOs focus on tracking spreadsheetrows and columns, the greater the risk they will lose sight of the big picture.And while most CEOs of midsized companies readily acknowledge the problem,finding a way to restore the proper balance can be a difficult challenge.

The urgent vs. the important

"It’s not a new problem," says FredFoulkes, professor of organizational behavior and director of the HumanResources Policy Institute at Boston University’s School of Management.The institute brings scholars and business professionals together to examinethe problems and solutions surrounding strategic human resources issues."CEOs have always had to balance the short term with the long term, and toearn their pay and keep their jobs, they need to be concerned about thefuture."

Foulkes admits that focusing on the future is notalways easy, especially in today’s highly regulated environment, because"the urgent always drives out the important." The solution, he says,rests primarily on a CEO’s ability to maintain a delicate balance betweenstrategy and operations — or suffer the consequences.

Are you focusing too much on your company’s internalissues and not enough on long-term strategic planning? Consider the followingwarning signs:

• You are spending less than 70 percent of your time dealing with strategic issues and more than 20 percent dealing with operational ones.
• Your company has no formal strategic plan meaning you cannot quantify the amount of time spent on "big picture" issues or on tracking progress toward goals.
• You have a formal strategic plan, but cannot readily pinpoint your company’s progress toward outlined goals.
• You spend an inordinate amount of time helping your executive staff solve day-to-day problems or operational issues you are not required by law to oversee.
• Your membership in external boards and organizations, or your frequent participation in purely ceremonial events, is draining too much of your time and attention away from the company.
• You regularly perform tasks that could be delegated to subordinates.
• You feel as though you are either not in the loop or are too far from the action if you are not regularly checking on your staff.
• You rarely take a vacation.

As with all problems, the first step towardcorrecting an imbalance of strategic and operational issues is recognizing thatone exists. Once you’ve identified the problem, experts say there are four concretesteps you can take to help restore balance, including:

Delegate, delegate, delegate. A January 2003 study by Proudfoot Consulting found thatCEOs say they spend an average of 16 percent of their time dealing withproblems and work that could have been delegated. While putting too much trustin your employees can lead to lack of oversight, maintaining the appropriatemanagement depth ensures that your senior staff can take as much as possibleoff your plate without taking you entirely out of the loop.

Put a strategic plan in place. While financial reporting is important, it should be justone of several key internal and external initiatives that help drive yourcompany’s long-term success. Creating a strategic plan that balances suchelements as financial performance, internal operations, innovation, learningand customer satisfaction is an important step in defining your company’sshort- and long-term goals.

Evaluate your reporting process. Once you have your strategic plan in place, make sure youhave a regular means of monitoring and communicating the plan’s progress. Byappointing key internal stakeholders to update you regularly on progress androadblocks toward goals, you can make sure that none of your strategicinitiatives drop off the radar. Additionally, put strategic progress on yourregular executive staff meeting agenda to further ensure that your leadershipteam’s attention doesn’t permanently shift from long-term goals to short-termfires.

Empower your employees and board to manage up. While it’s important to recognize your own role inmaintaining balance, you neither can nor should bear the entire burdenyourself. CFOs and other corporate executives must understand company goals andrequirements, and must be empowered to speak up if they believe the CEO needsto delegate more effectively. Likewise, corporate boardmembers should possess the appropriate skillsand power to keep the CEO on track with both short-term compliance issues andlong-term strategic initiatives.

By taking these steps, you can recharge yourability to lead your company toward long-term success, while not losing sightof overall operations.