Wednesday, May 11, 2005

The CEO as organizational systems designer

Reading about George David of UTC in CEO Magazine today and an article by Jay Forrester (see especially "Policy versus Decisions" on page 5) yesterday reminded me of an observation I made years ago: CEOs, executives, and managers who are successful over the long term are systems designers. They don't obsess over individual decisions, although they clearly can make decisions or overturn poor decisions by others; rather, they ensure the organization is designed in ways that lead it to make good decisions repeatedly and repeatably.

What's important is that their primary focus seems to be on what Forrester describes as policy design: the "rules" by which the organization makes decisions. From David's focus on profit centers, his Japanese-style focus on quality, and his emphasis on "linearity" and "continuity momentum" to Bill Hewlett and David Packard's focus on making a contribution, self-funded growth, and taking care of people in the community and in the company, successful CEOs have designed organizational systems that worked over the long haul. They are effective systems designers.

What can one do to become a better executive systems designer? We each have certain skills and background we bring to the job. Building on those takes a combination of useful experience and effective learning from that experience. There's a strong suggestion that effective simulation exercises may help us gain experience faster, and many find some form of journaling effective in stimulating and guiding reflection.

What do you think? What has worked for you?


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