When you think about who runs your business, most people think it's the company's management or leadership team. But it's not. The real answer is there is always an inner circle; the three to four people who, with the CEO, are the ones trusted with making the most critical decisions in the business. Don't let this freak you out. As a CEO it's a good thing and you should embrace it even though it doesn't look collaborative and open. Let me explain why.
Consider how most organizations, especially ones that have reached a certain scale, are structured. It's like you have a series of concentric circles that ripple out from the focal point: the CEO. At the outer level, you have your front-line workers. Next come your managers and then your directors. As you close in, you have your vice presidents and then your C-Suite.
One of the defining characteristics of those circles is that the farther out you go, the more the people in those roles focus on their core function, say, marketing, engineering, or IT. Their function is where their loyalty is and what they spend their time thinking about and taking deep dives into.
The closer you get to the inner circle, though, the more people need to think less about their particular area of function and more about the overall health and growth of the company. Your director of marketing, for example, needs to be thinking about more company-wide issues than just the next email campaign in the queue. Your VP, then, takes that even further.
When people think about who makes the critical decisions inside your business, they tend to think it comes down to the input from those directors and vice presidents who make up what we usually call the company's "leadership team," which often consists of between eight and 10 people. We've seen a lot of advice lately about how CEOs and leaders need to work collaboratively by seeking input on key decisions from teams like this. As a result, this group probably meets at least monthly if not weekly to discuss the latest updates inside the business. This is certainly powerful and the group mind will always come up with a better answer.
But consider how political these meetings can get, where people can get too focused on defending their turf or worried about their own department's goals over what might be better for the company. There's still too much of a loyalty to one's function or department. Frankly, this happens even if people are on very good behavior and in low-political organizations.
That's why I am suggesting that, as a CEO, need to tighten that inner circle even more when it comes to soliciting input on making the most critical decisions in your business. This group should consist of people like your CFO, your COO, and maybe your CMO. Everyone here should have full access to all of the information in your business and be willing to make decisions with the CEO without the influence of departmental or functional politics. This group can become aligned, make good and rapid decisions and leave the politics outside the room. Frankly, if a hint of agenda shows up, they should be asked to leave the inner circle. This is all about doing what is best for the business, that's it.
What also makes this inner circle different than your leadership team is that you, as CEO, need to bring the critical issues facing the company to them to solve. This means elevating the discussion beyond "reporting out," or giving updates, and truly giving these folks the chance to drive the business forward with you, perhaps by making sacrifices to their former functional loyalty.
What's interesting, though, is that many CEOs feel guilty about relying on their inner circle. They have been taught that they need to be more inclusive and collaborative when it comes to making critical decisions. And in some cases, it's all well and good to rely on your leadership team's input for certain decisions.
But a key advantage of building up and relying on your inner circle team is that you are also developing your roster of potential successors to you as CEO. Elevating them into this position and relying on their input to make critical decisions should actually part of the developmental plan for your superstars.
On the flip side, if you're a young and hungry manager looking to grow your career inside your company, set your sights appropriately. Aiming for the becoming a member of the leadership team won't be enough if you eventually want to become CEO. There's still another circle to climb to.
The key takeaway is that building an inner circle is a critical part of both effectively leading your organization as well as a way to groom the next great leaders inside your business.
Jim is the author of the best-selling book, "Great CEOs Are Lazy". Grab your copy on Amazon!