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

• Author: Alan Vercio
• Date: 01 January 2018
• DOI: http://doi.org/10.1002/jcaf.22310
• Published date: 01 January 2018

139

© 2018 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI 10.1002/jcaf.22310

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Nine More Ways to Reduce the CEO’s

Power of Authority

Alan Vercio

INTRODUCTION

CEOs working with an

ineffective board of directors

and management passing infor-

mation 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 strat-

egy. This article identifies nine

more ways to limit the CEO’s

ability to execute the business

strategy. Each of the nine ways

will include examples of how it

happens and mitigation oppor-

tunities.

FOUNDATION CONCEPTS

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

Peter Drucker provides

reasons for two primary

types of planning. … a

great many companies

increasingly separate

the budget into two

parts. One is the operat-

ing budget, which deals

with all the things that

are already being done.

The other part is some-

times called the oppor-

tunities budget; it deals

with the new things

that might be done,

with products, markets,

activities, programs that

represent either some-

thing genuinely 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 dam-

age? How much effort

and how many resources

have to be put into this

activity 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

opportunities budget,

the first question is

always: Is this the right

opportunity? And if the

answer is yes, then the

next question becomes:

What is the optimum,

in terms of resources

and money, this oppor-

tunity can absorb at the

present level. (Drucker,

1973)

Vertical Versus

Horizontal Work

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 horizontal

work responsibility. Horizontal

work is accomplished by link-

ing functional work together to

form an end-to-end (E2E) work

flow. This is important because

the customer/patient experience