Firefighter or Architect? Three Priorities Of The Top CEO

The leaders of the most successful companies focus their time, energy and effort on three specific areas. The first is improving the business model of the company they lead. The second is ensuring the best possible people are employed in the business. The third is an unrelenting laser beam focus on profitability.

Let me elaborate.

My entire life has consisted of working with, observing, advising, coaching, consulting to, watching, reading about, and learning from top business executives.

The title that the person at the top has is not important. Neither is the industry or the tax status of the entity. It also doesn’t matter the size of the organization: a one- person business operating out of the back bedroom of the house or a company with thousands of employees.

I’m writing this because my belief is that everyone who is leading a business wants that entity to be successful. How success is defined is an individual matter, and each organization should decide and define for itself what success is.

But what the most successful top executives do; how those individuals invest their time, is not up for discussion. The leaders of the most successful companies are not firefighters, they are architects. For decades, and sometimes even now, firefighters are primarily reactive in nature; meaning, they go to work only when there was a fire blazing that needed to be put out. Architects, on the other hand, are designers, and work with builders to take a vision with the goal to create structures that are built for a purpose. The most successful leaders are builders, proactive in nature, as opposed to firefighters that are reactive in nature.

There are many ways to describe and define a business model, and you can search online for them, but for my purposes let me borrow from Peter Drucker’s questions: “Who is the customer? And what does the customer value?” These two queries follow with, “How do we make money in this business? What is the underlying economic logic that describes how we can deliver value to customers at an appropriate cost to deliver a reasonable return?”

Those that I observe to be successful, invest time working on their existing business model. Let me provide an example. One of my clients runs a cash heavy business. The problem is that with cash often comes crime, both internal and external.

So while cash may be king, in this case it is also potentially trouble. They are working to convert the many points of sale, some in very remote locations, from cash to debit card. Where before there was a delay of weeks from the time the cash was received until it was collected before being deposited, with debit cards and the internet, the firm now sees deposits credited overnight.

This change reduces risk of theft, improves cash flow, lowers bank charges and armored car expenses, and fewer employees will be needed in the field to collect which means a reduction in vehicles and related expenses.

The second area of focus is people. It means is having the best possible people on the payroll, focused on tasks within the business model to create value. In the more successful companies, each employee has goals, managers who are responsible for keeping people focused, and tools to ensure their people can be successful.

For the CEO, it also means investing the time to make certain that the most capable people are in the correct positions and that if things are not working out; the individual is allowed to be recast internally or be allowed to depart for a better fit externally.

The top executive also works to insure alignment from top to bottom and across the company so that departments and individuals are not working at cross purposes.

Third, CEOs have a firm eye on improving profitability. Nothing is too small to escape attention in the ongoing search for profits. Two quick examples; at one client operating a fleet of vehicles, drivers were written up when they did not use the gas station down the street from the office as it had the lowest prices.

The price differential was four cents a gallon. Take that and multiply it by thirty vehicles with 16-gallon gas tanks and each vehicle being filled up twice a week. The savings were $400 a week or $20,000 a year, not an insignificant amount of money.

Back when a commercial flight meant being served a meal, one airline CEO ordered the removal of the single black olive that had been included in the salad being served. He also reduced the number of olives in martinis from two to one. In the process these two small decisions, the airline saved a significant amount of money. No one complained.

It’s never too late to have a better business. If you decide to change how you invest your time, change from being a firefighter to an architect, by working on the business model, your people, and profitability.

Read more: How Companies Can Prepare For The New Digital Reality

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