It’s simple to say a CEO ought to be accountable for many issues that appear important or pressing, and more and more it looks like nearly all the things is feeling important or pressing. Irrespective of how succesful any particular person could also be, although, there’s a restrict to how a lot a human can do. CEOs—clearly—have to prioritize and to shed a few of the myriad expectations that stakeholders have of them. However there’s one factor CEOs ought to be accountable for: to be the group’s “chief methods designer.” There are three core causes for this.
First, the CEO is accountable for the imaginative and prescient and route of the group. She is intimately conscious of the group’s targets and might decide whether or not the group is in alignment with its elemental objective or drifting away from it.
Second, the CEO is the one individual within the group with each the authority and the visibility to create a coherent set of administration methods: the formal processes and constructions that form group conduct. By working with administration methods, the CEO can drive the collective behaviors that transfer the group towards its aim.
Lastly, the CEO is in a singular place each to inject wholesome stress and to assist resolve it. Productively resolving stress is usually a nice supply of innovation.
None of that sounds notably controversial … so what’s new right here? Put merely, many CEOs right now don’t see it that means or, in the event that they do, they don’t act like they see it that means. Slightly, they typically view themselves as catalysts for change—outspoken visionaries, sponsors of transformation initiatives, motivators of the plenty. After a problem is “resolved,” they transfer on to the following large problem and focus there. This may—unintentionally—create the next diploma of drift as a company turns into extra involved with implementing its particular initiatives than staying near its elemental objective. As soon as a company has drifted too far, honing—our most popular methodology of creating small modifications to methods to remain in aligned with the group’s objective—received’t minimize it. You then have to go the route of transformation, which is usually dangerous, costly and unsuccessful.
Guardrails for Delegation
Per above, the CEO can’t do “all the things,” so it’s pure to ask what elements of methods design might be delegated. The CEO doesn’t have to handle each element of the methods that form organizational conduct, however they need to be accountable for:
- Clearly articulating the design targets (outcomes and behaviors the administration methods have to create)
- Deciding on and prioritizing the important thing administration methods that may collectively create these outcomes
- Monitoring to ensure ongoing administration methods are delivering the behaviors which have one of the best probability at creating the outcomes the CEO is looking for
We don’t see CEOs as crucial to designing the particular particulars of every administration system, nor do they must be the individual with the pen designing the main points of an working mannequin or group design.
However the CEO ought to personal the crucial decisions concerning essential administration methods, akin to what the efficiency administration system prioritizes and the way it determines promotions, the general construction of the enterprise (e.g., by geography, product line or buyer), the allocation of resolution rights and others. The CEO must also have a view on how these items work collectively to encourage conduct.
We lately had the chance to spend time with Paul Polman, the previous CEO of Unilever. He talked about honing Unilever to guarantee that it met his goal of appearing as a single, purpose-driven international firm centered on long-term stakeholder worth.
Let’s take one instance. Paul observed that many staff didn’t need to transfer from low tax jurisdictions to higher-tax jurisdictions. This made it arduous to behave globally and create leaders with worldwide expertise. So, he requested the group to create a administration system that made pay for comparable roles in several geographies equal on an after-tax foundation. As well as, to get the group centered on long-term worth creation, he eradicated quarterly earnings steering. Lastly, he used bold aim setting to border what ‘good’ appeared like (e.g., p.c of products sustainably sourced, variety of new customers to serve).
Though not all his bold targets within the Unilever Sustainable Residing Plan had been met, the corporate made dramatic strides at a tempo not beforehand thought attainable. And all of this was finished whereas additionally delivering a complete shareholder return of 300 p.c over his tenure.
As methods designers, CEOs are accountable for making a wholesome stress and balancing the wants of all stakeholders. Corporations that blend non-financial targets into their metrics akin to exceeding buyer and worker expectations create preconditions for lengthy time period well being. Since most of any firm’s intrinsic worth is in so-called “terminal worth”—basically, an investor’s expectation that the corporate will proceed to become profitable in perpetuity, not simply over the following few years—longevity actually does matter. One of many views CEOs ought to deliver to methods design is a concept of which portfolio of targets, underpinned by a particular mixture of administration methods, results in long-term worth creation.
The enterprise world is witnessing a rising recognition amongst each traders and managers {that a} slim, obsessive deal with maximizing shareholder worth alone might be detrimental—paradoxically, to shareholders specifically. Taking good care of all stakeholders creates extra worth in the long term, as a result of the system wherein the group operates doesn’t get out of stability. Extreme emphasis on short-term shareholder returns can result in myopic resolution making and value-cutting measures that undermine buyer satisfaction and lengthy time period success. Failing to care for staff’ well-being may end up in turnover past wholesome ranges and the lack of institutional data and functionality.
These are simply a few of the methods CEOs can use methods design to nice impact. Once they embrace their position as chief system designers—actively shaping, monitoring and refining the administration methods that underpin their organizations—they’ll create the invisible structure that sustains objective, drives enduring worth and permits their firms to thrive for the long-term.
Excerpted with permission from the writer, Wiley, from Hone: How Purposeful Leaders Defy Drift by Geoff Tuff and Steven Goldbach. Copyright © 2026 by John Wiley & Sons, Inc. All rights reserved. This e-book is out there wherever books and eBooks are bought.
