Nine More Ways to Reduce the CEO's Power of Authority

Published date01 May 2017
Date01 May 2017
© 2017 Wiley Periodicals, Inc.
Published online in Wiley Online Library (
DOI 10.1002/jcaf.22268
Nine More Ways to Reduce the
CEO’s Power of Authority
Alan Vercio
CEOs working with an
ineffective board of direc-
tors and management passing
information they believe the
CEO wants to hear instead
of what the CEO needs to
hear are two ways to limit the
CEO’s ability to execute the
business strategy. This article
identifies nine more ways to
limit the CEO’s ability to exe-
cute the business strategy. Each
of the nine ways will include
examples of how it happens
and mitigation opportunities.
Following are foundational
concepts that will provide the
reader a baseline for several of
the “nine ways.”
Operating Versus Discretionary
Resources and Operating
Plan Versus Opportunities
(Life-Cycle) Plan
… a great many com-
panies increasingly
separate the budget
into two parts. One is
the operating budget,
which deals with all the
things that are already
being done. The other
part is sometimes called
the opportunities bud-
get; it deals with the
new things that might
be done, with products,
markets, activities, pro-
grams that represent
either something genu-
inely new or a new way
of doing old work.
In analyzing the
operational budget, the
manager asks: “What
is the minimum that
needs to be done in
this area to prevent
damage? How much
effort and how many
resources have to be
put into this activ-
ity to keep it going?
What is the lowest cost
to obtain adequate
results?” (or “what will
I have to cut out of my
operations to meet pro-
ductivity demands and
budget cuts?”)
With respect
to the opportuni-
ties budget, the first
question is always: Is
this the right oppor-
tunity? And if the
answer is yes, then
the next question
becomes: What is the
optimum, in terms of
resources and money,
this opportunity can
absorb at the present
level. (Drucker, 1973)
Vertical Versus Horizontal
The functional (vertical)
organization structure is based
on technical skills. The segrega-
tion of technical skills begins
in education and is supported
with professional organizations.
While most of the organi-
zation’s people (90%?) reside
and work in the vertical orga-
nization structure, there is a
set of skills that have horizon-
tal work responsibility. Hori-
zontal work is accomplished
by linking functional work
together to form an end-to-end
(E2E) workflow. This is impor-
tant because the customer/
patient experience is deter-
mined by the horizontal flow of
work and rarely one functional

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