The Winners
Interview with Mr. James B Haybyrne
on the Role of the CEO
CNBC: First of all, we understand that a CEO is at the top of the echelon. What key roles or responsibilities is that he or she have?
Haybyrne: I think the primary responsibility of a CEO in any organisation is fundamentally to create wealth – to create wealth for that organisation in terms of the shareholders and also to contribute to the broader economic and social development of the country within which that organisation operates. More succinctly, the responsibility of a CEO is to create a strategy and then to ensure that all of the people within that organisation understand it and implement it.
CNBC: And under this current economic environment and under a global economy, are we seeing the role of the CEO change?
Haybyrne: I think that the principal role of creation of wealth won’t change now or in the future but what will change is fundamentally how that organisation or CEO goes about creating that wealth. Much of the changes that you see in the world economy today – for example, the downsizing, the influx of information technology – have all resulted in a removal of different layers of management in an organisation. And when those layers of management are removed, primarily, the middle management, the role of the CEO then becomes paramount in creating a strategy that is easily understood by those who must implement it. There will be no division between the “thinkers” and the “doers” in the 21 st Century. The CEO must “lead” this type of workforce from the front; not “push” them from behind.
CNBC: Let’s talk about the issue that the main role of a CEO is formation of a strategy. What then should a CEO ask him or herself on a daily basis, for example?
Haybyrne: I think in fulfilling the responsibility of the CEO, there are a number of different questions that will never go away. And these begin with “what is the future be like”? For example, what will be the demographics, or consumer preferences? The ability of companies such Sharp, to foresee the emergence of flat screen technology and the application of that technology is one example of how a CEOs can “see” the future and then create products for that future.
CNBC: It is not easy to have that sort of foresight, is it?
Haybyrne: No, it’s very difficult. Much of the CEOs kills lie not only in the ability to use factual information but in the ability to use intuition, and to have the courage to take a decision and move forward with it in the absence of data or information.
CNBC: What other questions should a CEO ask?
Haybyrne: Once you have an idea of what you believe that future is going to look like, you have to respond by managing the changes necesary to get there. And change will come in all sorts of forms, from different organisational structures, to the different systems that people need to apply. Thus, managing change becomes the second element of a CEOs responsibility. The third is to understanding what your competitive position will be. And there the CEO must understand where the competitive advantage of its company lies. It can be in distribution systems or selling methods or technology. But understanding that competitive advantage is critical to crafting a successful strategy.
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CNBC: What about the reputation of the company, is that important?
Haybyrne: Reputation is a key element of strategy particularly as we move into the “Information Age”. You can see companies such as Coca-Cola or V-tech and Acer in Asia as examples of companies that have developed a reputation in the marketplace which gives them competitive advantage. Your reputation is what precedes you, whether on a personal basis or on a corporate basis. And the ability to build a successful reputation based on a solid strategy is one of the key responsibilities of the CEO.
CNBC: Mr. Haybyrne, of course, the CEO can set all these policies and so on but he needs the support of the people underneath him or her. Does he or she not?
Haybyrne: Absolutely. A CEO must not only communicate the strategy by “telling” his other people what is that vision. He must also “engage their minds and hearts” communicate so that people share that vision.
CNBC: What happens if you have an ineffective CEO?
Haybyrne: Well, you have a lot of difficulties. You see companies today – Apple Computer, for one example, going through a transformation. IBM brought in Lou Gerstener to turn that organisation around. The responsibilities of the board of directors is to ensure that the CEO fulfills his responsibilities of wealth-creation and if he or she doesn’t, then it has to take the very difficult decision of removing the CEO.
CNBC: Mr Haybyrne, it’s all well to have the knowledge of management. But what about personality, the charisma that a CEO might carry? Is that important?
Haybyrne: Well, it’s an element. The most important part of a CEO is performance – -sheer performance. Although it can assist you, charisma, in and of itself, will get you very little if you don’t have the strategic capabilities behind that charisma.
CNBC: Are there any other personal skills that are important?
Haybyrne: I think obviously the ability to mobilize people’s thinking, to really get them engaged in the future, to get them excited about that future is one of the key elements of a CEOs success.
CNBC: Mr. Haybyrne thank you very much for those words of advice.