What CEOs Need From Their Functional Teams



Mark-Stouse-headshotBy Mark Stouse — There’s been a lot of discussion on LinkedIn about a new study by the Wharton School of Business. It looks at ways that CEOs can adopt a 21st century approach to Communications, even if their professional communicators (PR pros, speechwriters, content gurus, and the like) are still in the 20th century. Read more here.

The Wharton research paper focuses a lot on the dichotomy between the “hard skills” valued by business leaders and the “soft skills” associated with functions like Marketing and Communications. Everyone is exhorted to understand the language of the other and create new value together. Good stuff mostly, but it’s here that the authors miss a very important point:

No matter the function, it’s the business perspective that rules.

So while the Wharton paper is focused on Communications, the fact is that many of the issues apply to all functions. And there are some real lessons to be learned here.

Talk to business leaders, and you’ll hear about the chasm that exists between what they need and what many functional leaders want to give them. And let’s be clear: While every business leader should pursue new knowledge and better skills, the onus is not on him or her to “just get it” when it comes to the “inside baseball” of Marketing, Communications, HR, IT, etc. It is the functions who must gain business perspective, acquiring the necessary knowledge and insight to more effectively advise and persuade business leaders on the right course of action in their sphere.

I’ve been a business leader, and I’ve been a functional leader. I’ve done both jobs in small and large companies, and I’ve done them more than once in my career. I’m a CEO of a software start-up now. Here are some observations I’ve found to be true.

Business leaders are practical. They want to know that what you’re proposing has a very high likelihood of success, and that it will really mean something at the end of the day. Many times the assurance they’re given is largely about precedent — this is often the default functional argument. But CEOs want to know that you have the right data, the right analytics, and the ability to show reasonable cause and effect.  Today, some functions are better in this area than others, but none have truly given business leaders what they want to see.  IT has made vast improvements over the past decade, but it’s still got some ways to go before it can stop being a cost center and start being a revenue driver.  In contrast, most marketers and communicators can’t give the business and the board any analytics that matter to them at all. Regardless of who you are functionally, this deficit compromises the credibility of whatever you are proposing to your CEO.  S/he is not going to change, so you will have to meet them where they are.  Learn to prove your “soft” skills in “hard” ways.

Business leaders want to hear about your contribution to what they care about. The CFO is not going to stop caring about your cost-effectiveness and the ROI the business derives from investing in your function. The CEO is not going to stop wondering if what you’re doing is really making a contribution to the growth, health and prosperity of his company. The sales leader will always want to understand whether you are putting enough grease in the right places so that the sales teams can sell more to more people, and do it faster.  This is where the battle is, and it’s where you should be too.  For every purely functional position you take, you should be seen to advance real business arguments at least 20 times.  It’s a directional reference to be sure, but 20:1 is a good ratio that will help change your game.

Business leaders need informed, empathetic advice. They expect you to know enough about their world—and the constraints they live with—to give them solid, actionable counsel. If you can’t do that, you will be ignored and marginalized.

Functional bias remains a huge problem today.  Too many functional leaders still advise business leaders to do and say things that sound wonderful from their limited point of view but ignore the wider realities that a business leader has to deal with.  f you’ve done that—and who hasn’t?—then you know that it tends to be very disconcerting to a business leader. It tells them that you do not understand their world. And if you do it often enough, their reaction will be to pull a huge filter between themselves and anything you suggest. Ultimately, that filter might even be a pink slip.

What to do about it?  Step out of your profession, and take a line of business position. It really is true that where you sit determines where you stand, and changing position will open your eyes to a host of things that you never thought about before. I’ve done this several times in my career, and I’ve never regretted it.  Quite the contrary, making those changes often ended up catapulting me forward. But most importantly, it filled in my ignorance in many areas and taught me empathy.

The Wharton paper highlights how important it is to “know your audience.” Business leaders are no exception, and I’d like to offer up a short story from my own career that amply illustrates the point.

Once upon a time, I was in a big consulting firm, representing a large insurance company. We came up with a glorious marketing campaign that would raise their profile and awareness dramatically. The client’s marketing leader loved it, and so we had the chance to present it to the board. When we left the room, we were convinced that it was a slam-dunk.

An hour later, we were invited back. To our shock and dismay, the board had voted it down. We asked why. A director spoke up and said something like this:

“We like your ideas, and we have no doubt that your proposal would raise our awareness and brand in many markets. However, we have a lot of data that shows clearly that when our brand awareness goes up, insurance claims also go up. For that reason, your plan would be very expensive for us to execute and would reduce shareholder value.”

To our considerable chagrin, we learned that day that we neither understood their business nor their responsibility to their shareholders, nor did we understand the likely effect of our program on their business. We had proposed a campaign that looked fantastic from our narrow functional perspective, but was a bust when placed against a broader reality that we had never even attempted to understand.

Looking back on it, it’s clear that we did ourselves — and the credibility of our profession – absolutely no favors that day. Those board members undoubtedly shook their heads and said, “Those guys don’t get it” right about the same time we were saying those same words about them.

Except they were right, and we were not.

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