The CEO’s Brain
Have you ever wondered what CEO’s really want? Ever pondered on what you’d find in the CEO’s head if you could take off the top of his or her skull and peer inside? Here’s a short story and simple answers to those questions.
I have spent many years helping technologists in large companies communicate with executive management. Chief Information Officers often speak a different language than the CEO and commonly see the world through a different lens. As a way of signaling to the CEO that a new era of business-focused technology has arrived I have been advocating that the CIO change the term Information Technology (IT) to Business Technology (BT). It’s a not-too-subtle way for the CIO to say, “Hey, I’m no longer the insular geek you’ve come to know and love through the years — my team and I are about making money, not just tech.”
But CIOs tell me they need more. They want to know what is in the CEO’s mind so they can tune their message more precisely to that frequency.
To gather clues, you could read the annual report letters from CEOs. But they don’t offer a clear answer. You’ll get a lot of flowery language about, “Helping our customers through a pretty tough year…” or “Develop safe, fuel-efficient, high-quality new products” or corporate-wide re-invigoration…”
Yes it is true that seven themes recur — numbers, organization, shareholder value, customers, innovation, brand, improving the world — but that still feels too general and mushy…
So I’m about to let you in on a simple but powerful secret — one they only reveal at Chief Executive School. CEOs think incessantly about only two things: 1) higher revenue, and 2) increasing profits. That’s it. All of the rhetoric about productivity, or efficiency, or corporate responsibility can be directly linked to these two goals.
Why? Because in the long run, revenue and profit change governs the stock price. While in the short term, alluring strategic statements or charming executives can cause temporary share price spikes, you can’t get sustainable valuation without driving the top and bottom line. In the 13 years I’ve spent running a public company, the intelligent investors I’ve worked with focus on these two metrics above all else.
So the next time you have to present to the CEO, remember to connect your tech project, or your new product idea, or your reorganization plan to revenue and profit increases. That’s when the CEO’s brain will light up and you’ll be speaking his or her simple language. And don’t tell them I let you in on the secret.
As a note, I presented these thoughts as a keynote at Forrester’s Business Technology Leadership Forum held in Chicago on October 8th and 9th, 2009.