(2017-11-10) Rao CEOs Don't Steer

Venkatesh Rao: CEOs Don’t Steer

But CEOs don’t steer.

Other kinds of leaders steer.

When I read or listen to exemplars of other categories of leaders, I am often impressed by the subtlety, nuance, agility, and complexity of their thinking. This is not true of most things CEOs say or write. Public displays of CEO thinking are impressive primarily for their sheer banality

I’ve seen it on display in candid, private settings as well, where there’s no particular reason to keep things simple. CEO world views really are that simple

Other kinds of leaders are generally playing a higher-dimensional kind of chess than the people they are leading or influencing. CEOs are playing a lower-dimensional chess.

it is a strength, and possessing it is the primary job qualification

Resistance Must Be Futile

You don’t want a CEO to be an intellectually stimulating bon vivant

You want a grinding, relentless, tank-like drive in a seemingly unshakeable direction that builds shareholder value. If you’re in the way, you get crushed. If you’re off to one side, you are ignored. You’re looking for a resistance is futile affect

CEOs may make many decisions but they are not steering decisions

If any kind of ongoing steering is obviously necessary, it becomes a function at a lower level than the CEO, associated with a suitable kind of mapping, sense-making, and navigation skill

the actual job is the opposite of steering.

CEOs are orientation locks

providing a steady True North signal to everybody else doing more local kinds of steering work. (Vision, Focus)

they counterbalance an organization’s natural tendency towards distraction, ADD and momentum dissipation

As the orientation lock, the CEO becomes the human locus where momentum compounds; the psychological platform others build on. They are the steward of whatever snowballing network effect or unleashed natural wealth-creating dynamic is the company’s raison d’être. Their primary job, and ideally their only one, is to protect and feed that dynamic, and get everything else out of the way

If you didn’t have a CEO serving as an orientation lock, you’d have governance by some sort of bickering executive committee

Result: the irresolute Brownian motion of (say) a Parliamentary democracy. No Compounding interest. No network effect. No platform effect. No force-of-nature unleashed. No dent in the universe.

Contrary to popular belief, it isn’t inertia that’s the problem for most companies, it is lack of sufficient inertia in the right direction.

When a company needs to truly steer at the CEO level, it changes CEOs.

If a direction change event is more complex than substituting one set of foundational orientation/vectoring beliefs for another, you might require some temporary high-agility steering between two locked orientations. Under such circumstances, a company usually hires a specialist turnaround CEO

When the environment changes in more profound and permanent ways, the steering happens in the guise of an entirely different company: a disruptor company from the margins that is on a better vector. Often one founded and staffed by veterans of the original company

Incidentally, The Innovator’s Dilemma is among the (very) rare bestselling business books that is not reducible to a single declarative propositional-logic assertion

And if you think about it, its core message, notwithstanding Clayton Christensen’s brave later attempts to offer an “Innovator’s Solution”, is essentially a close cousin of mine: Companies Don’t Steer

Sticking to a straight line is actually a very difficult job for a human

This does not mean the CEO never takes over a helm position, but such an override is usually only called for when the report is doing something that might derail the company from its main locked-orientation vector

In all cases, needing to be over-ridden via the CEO taking over a steering function is usually a firing offense

CEOs don’t steer, but they do make aiming decisions — usually they get one shot at “aiming” the company during the honeymoon period

CEOs make acceleration decisions when they can, braking decisions when they must, retargeting decisions after successes, but steering decisions only when the alternative is losing the job (and the company) no matter what they do. And generally they lose the job anyway.

Agile artistry is a good thing almost everywhere except for at the CEO locus.

A company can survive an underwhelming marketing campaign, a failed skunkworks project, and even a failed product launch. But at the very top, a failed steering episode is usually a CEO-killer, and often a company-killer as well

The risk structure of a steering decision that is not a fundamental reorientation is complex and fragile, but is also much more amenable to being mitigated through focused, specialized attention, data, and intensive sense-making and mapping efforts. In other words, it’s a job for somebody else

A Very Small CEO Shell Script

Almost everything about the job of not-steering has to do with managing energy and emotions, but let’s get the decision-making part out of the way

So the CEO algorithm not-steering algorithm basically looks like this:

Filter everything as either relevant or not relevant

Almost everything is not relevant, and almost all of it can be judged to be not relevant by an somebody else.

For things that are relevant (and actionable), it is either a steering decision or a not-steering decision. If any kind of map exists, it is a steering decision and belongs to whoever owns the relevant map

If it is a steering decision,

Delegate it

If it is not a steering decision, it is usually an acceleration or braking decision

Less frequently, it is a drop/add decision

The rarest kind of decision is a steering decision that does not belong in a functional pigeonhole

Such a decision is a reorientation steering decision. An existential threat for the CEO, and possibly the entire company

I resisted this conclusion for a long time because it suggests the null hypothesis that most of what people do to support or influence CEOs in their jobs is bullshit

Most of the time, in the face of an existential threat, there will also be some sort of foolish attempt at a “change” theater

Most efforts at change fail because they are either unnecessary, or because they are impossible.

Increasingly, I just say no.

It’s a weird belief for a consultant.

If the decision-making algorithm that is 10% of the CEO job, the part requiring intelligence, is simple and reducible to being a very small shell script, the other 90% is reducible to being a very big hammer. CEOs must speak robotically and carry a big hammer. Or rather, be a big, robotic hammer

The biggest part of the job of a CEO is to stay on course without steering, by managing tempo

The converse is not true. Most people who display all these traits are merely garden-variety assholes

The Care and Feeding of AlphaGo, CEO

The combination of 10% running a simple decision-making algorithm with 90% managing rhythms, emotions, and energy looks suspiciously like one of those inscrutable new-fangled deep learning algorithms that just digest piles and piles of data and use it in relatively simple ways to make decisions.

the big data (relative to a human-brain scale) is really piled on by CEO-fodder books and essays (Business Book)

The pile of data isn’t meant to refine the big claim being installed, or add nuance to it. It certainly isn’t meant to attempt to falsify it. The crushing weight of evidence is designed to confirm and reinforce the One Big Truth and install a pattern-match filter to navigate by it.

When CEOs are doing this job well, they look like out-of-control assholes

resist the temptation to steer, or give the CEO steering ideas

Being True North personified sounds like a dull and exhausting job to me, but clearly somebody’s got to do it.

When a small-shell-script-big-hammer CEO has been properly fed for enough time, you get a CEO who can project a reality distortion field and lock orientations.

When you talk to non-CEO senior executives, any map more complex than a 2×2 is too complex.

And when you talk to a CEO, any map more complex than a 2×1 is too complex.

Either the world is flat, or it is not. Either software is eating the world, or it is not.

You’ve heard A. G. Lafley’s famous line that the job of the CEO is to interpret external reality for the company. Now you know what it means: interpret the entire world through a bunch of WorldIsFlat class filters

One reason (though not the main one) the CEO shell script needs to be simple is to allow at least a partial copy to be installed in everybody’s head through frequent reinforcement.

If everybody were to participate in the business of Lafley’s “interpret external reality for the company” you’d get constant chaos. This runs counter to everything many people sincerely believe about the value of employee empowerment and autonomy, and turning the entire company into some sort of innovation hotbed running on “20% time” (a bullshit idea I believed in for far too long). The truth is, if you actually tried doing things like that, you’d turn the noise and distraction levels up to “impossible to manage.”

What is it like to be at the center of this system of focused energy and blinkered vision non-steering? I hope to never find out personally. CEO frankly sounds like a completely awful job. But I do know what it feels like to run into it up-close, especially if you’re in the way.

There’s an internal reason CEOs don’t steer: Steering kills reality distortion illusions.

CEOs represent the ultimate kind of scarce human resource: meaning.

If the trivial beliefs are mostly right, most of the time, the result is powerful: a reality distortion field that contains a source of shared, non-null meaning, a mission worth believing in.

But this only lasts so long as the CEO does not steer

Steering is a sign of being human and capable of error, less-than-omniscient understanding of the world, and less-than-omnipotent agency over it. To distort reality, you have to play god

the rest can simply replace their own why questioning with a because the CEO says so. They stop at the first simple answer that justifies their chosen direction of steamrolling, and then start spinning up momentum

What matters about a source of meaning is not the semantics of what it “says” but how much generative energy is coiled up and continually exploding behind it. This is why the most successful companies necessarily have a cult-like quality, induced by the reality distortion field of the non-steering, omniscient, omnipotent leader. You may know it’s an illusion, but it works nevertheless.

When true CEO-steering does happen, it usually involves intense death-and-resurrection level trauma for the CEO in question

So if you see a CEO start to steer, you should probably run.