The CEO’s most important operational responsibility

The CEO’s most important operational responsibility
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CEOs wear several hats — strategic, operational, financial. In One On One, Ben Horowitz makes a profound statement:

“Perhaps the CEO’s most important operational responsibility is designing and implementing the communication architecture for her company.”

My goal for this post is to dig deeper into the communication architecture that Ben refers to: why it matters in the first place, and what its constituent components are. (Ben — if you read this, would love your thoughts on whether I’m missing something!)

Why communication architecture matters

A good communication architecture enables information to flow across the company (up and down, side to side) without impediment. It ensures that every person understands the organization’s strategy and priorities (and their own role in it); that people can easily access the information they need to do their job well; that people understand how to make and communicate decisions; problems are surfaced to leaders efficiently.

In other words, the communication architecture is foundational to how a company operates, and it’s the responsibility of the CEO to put one into place.

Therefore, it’s better if the CEO makes explicit choices about its design instead of ending up with a sub-optimal design because of inertia or decision paralysis.

CEO choices around communication architecture

An organization’s communication architecture consists of several components. The choices the CEO makes for each of these elements, taken together, define its communication architecture. Some are perennial and evergreen; I have grouped the others by cadence, that is, how regularly they occur. I have also articulated the choices that the CEO needs to make around each element.

Evergreen

  • The company’s organizational structure — whether functional or product unit or some blend thereof — dictates how information flows and hence is a fundamental underpinning of communication architecture. This is a choice the CEO necessarily must make up front, but then needs to continually monitor to see if it’s serving the company well, especially as the company evolves and grows. Steven Sinofsky wrote a comprehensive post on functional versus unit organizations.
  • A formal decision framework helps people (make and) communicate decisions across the organization, which helps everyone understand why decisions are being made. The CEO must choose whether to use a formal decision framework, and if so, in which situations it should be used. At Square, we use an internally developed decision framework called SPADE, which has served us well.
  • Meetings are seen by many as the bane of the workplace and as the epitome of organizational drudgery; love them or hate them, they are an essential lubricant to every organization’s functioning, as organizations that tried to ban meetings have discovered to their chagrin. The CEO can choose to establish meeting norms, which can go a long way towards improving their efficiency and productivity and the happiness of meeting participants.
  • Retros (aka “retrospectives”) are a valuable mechanism for reflection on projects. Ideally, there should be a retro for every project of note. Retros can be done either at specific milestones or checkpoints, or on a regular cadence (eg: monthly) for longer running projects. The most important goal of the retro is to ensure there is learning and that the same mistake is not repeated again. This post does a good job of outlining how to run a retro. The CEO choice here is around how and when to run retros and in which situations.
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Daily, weekly or fortnightly cadence

  • 1:1s are foundational. They act as “a mechanism for ideas and information to flow up the organization”. The CEO can choose the frequency of 1:1s as well as how deep they should go (eg: only with direct reports or with skip levels, peers, etc) Ben Horowitz, Andy Grove, and several other leaders have written excellent articles about how to think about and structure good 1:1s.
  • All-Hands help celebrate milestones, drive alignment and provide a forum to ask and answer questions. They help employees feel invigorated, empowered and energized. The CEO choice here is both around All-Hands frequency and format. My post on All-Hands is a detailed look at how to run an effective All-Hands.
  • A daily / weekly metrics email sent to the entire team, breeds urgency and reinforces transparency. The CEO choice here is around email frequency and content — how to have the Goldilocks (“not too many, not too few, just right”) metrics in the report. Square has been doing this since very early days, and it’s proved very powerful — this metrics email is one of the first things a new product at Square is expected to set up. And everyone working on a product is automatically subscribed to the daily email.
  • A weekly or fortnightly CEO email to the entire team helps the CEO have a personal, direct line of communication with the entire company, and results in a team that is better informed and more aligned. CEO emails trump other forms of many-to-one communication in authenticity and permanence. The CEO choice here — of course — is how often to send this email and what it contains. My post on the weekly CEO email delves deeper into this.

Monthly, quarterly or annual cadence

  • Planning and goal setting, whether done annually, quarterly or monthly, is absolutely critical to an organization’s success. Done well, it makes the organization a well-aligned, fearsomely executing machine. Done poorly, it can bring things to a grinding halt through confusion, chaos, finger pointing and lack of clarity. The CEO chooses the cadence and details around this process and articulates the parameters and constraints around it. Ben Horowitz has an excellent post on this.
  • Product or business reviews are a good mechanism to update stakeholders on progress against objectives for a product, project, function or business. Good reviews surface open questions and lead to constructive discussion and dialogue that move the project forward. Reviews end up consuming a lot of time and bandwidth from everyone involved (especially the folks who are pulling it together), so the ideal review cadence is (at least) a month. As the scope of a product or project increases, consider moving to a bimonthly or quarterly cadence. The CEO formulates (or delegates) principles around which products, projects or businesses should have reviews, how frequent these reviews should be, who should attend, and what the format should be. Gibson Biddle has a good framework for product reviews.
  • Performance reviews are a way to collect and receive feedback on people’s work, as well for managers to have a constructive conversation with every report. Few things inspire as much anxiety and dread — among both managers and employees alike — as performance reviews, yet they persist in most organizations for the simple reason that they force a formal dialogue — centered around feedback and areas for improvement — a dialogue which in theory should be happening continuously but in reality doesn’t. Feedback should be multidirectional — inclusive of a self-review as well as feedback from a person’s peers and (if applicable) reports. The performance review cadence is either six-monthly or annual, though some exceptional organizations do it quarterly (kudos!). The CEO can choose to eliminate performance reviews entirely — there’s research that shows that they lead to no change in employees behavior and that most employees are dissatisfied with them — but you need something tangible to replace it with, otherwise I guarantee your employees and managers will feel the void.
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I hope this gives you a good sense of the choices you need to make as CEO around each element of your company’s communication architecture. However, it’s critical that you revisit your choices regularly (at least annually) to ensure they are still optimal for where the company is. As Ben says, there is nothing more important that you can do operationally as a CEO.

PS: Thanks to Shariq Rizvi for pointing out the need for retros in this list.


The CEO’s most important operational responsibility was originally published in ThinkGrowth.org on Medium, where people are continuing the conversation by highlighting and responding to this story.

Original article published here


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