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

Date01 January 2018
Published date01 January 2018
© 2018 Wiley Periodicals, Inc.
Published online in Wiley Online Library (
DOI 10.1002/jcaf.22310
Nine More Ways to Reduce the CEO’s
Power of Authority
Alan Vercio
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-
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
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,
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

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