Role of An SME CEO

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Role of An SME CEO

February 28, 2018

As CEOs of our SME setups we often (or rather always) find a large gap between what we (as CEOs) should invest our time on and what we ultimately end up doing. Through this small write-up, I am sharing my views on where should a CEO of an SME spend his time on and how can he ensure this balanced distribution.

 

A) Four Levels of Management:

 

Broadly, the 4 levels of management are as follows such that they form a pyramid (triangle) with Governance layer at the top and ‘Operations’ at the bottom.

 

1) Governance
2) Management
3) Administration &
4) Operations

In single-person organizations, the owner/proprietor alone has to address all these 4 layers such that most of his time is spent on ‘Operations’ and the time required to be spent reduces over layers above. However, practically, many such entrepreneurs may commit a mistake of getting too much caught up in Operations & Administration with no time left for higher layers leaving these unaddressed most of the time. This results in such entrepreneurs always being in ‘Execution Trap’ with no time left for strategic & tactical considerations. The result of this imbalance over a period of time is obvious.

 

For entrepreneurs who have teams, responsibility of different leaders in the hierarchy span across one or more layers. Here, the entrepreneur must ensure that he spends most of his time on Governance & Management and leave the layers below to his 2nd & 3rd line managers. Here, a mistake that an entrepreneur often commits inadvertently is to ‘creep’ into his next line’s scope of duties and spend a lot of time on lower layers thus creating overlapping responsibilities. At even more basic level, most entrepreneurs heading decent sized teams do not create strong 2nd & 3nd line managers thus ending up handling all the layers above Operations and additionally carrying a lot of opertional load too.

 

B) CEO’s Focus Areas:

To ensure a balanced distribution, a CEO should focus only on the following w/o getting caught in transactional activities:

  • Link the outside to the inside
  • Provide a conducive environment and set the culture
  • Systems & Processes (setting up & maintaining)
  • Oversight (through suitably designed dashboards)
  • Intervention (where team may require guidance and support and/or where things seem to be headed in the wrong direction)
  • Control (through effectively designed control systems)

Kindly share your views too!!

Warm Regards,
Vikrant Vartak

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