How mature is your organization? Does it operate with intention and predictability–or is it immature, chaotic, and reactive?
There are many signs that you’re at one end of the maturity spectrum or the other. To help CEOs and leaders determine where their organization stands, I created a business maturity model that maps an organization’s progress from Level 1: Confused (least maturity) to Level 5: Predictable (most maturity), based on how well the CEO fulfills his or her five key responsibilities.
Most companies exist somewhere between Levels 1 and 3. Companies at Level 4 are doing very well for themselves. But when you achieve Level 5, the organization operates at a whole different level: the leadership vision is clear, the mission engages and drives employees, and performance is consistent and predictable.
Here is a rundown of what each level looks like, broken down by CEO responsibility. Judge for yourself where your organization falls.
CEO Responsibility #1: Own the Vision.
The CEO must effectively communicate the strategy, mission, and vision of the company–where it’s going and why–to all constituents.
- Level 1: Confused. Any company vision exists only inside the CEO’s head. He or she has not clearly communicated it to anyone else.
- Level 2: Described. The CEO shares a vision with a chosen few but cannot tell a story that resonates with anyone.
- Level 3: Declared. The majority of people understand the vision, but they aren’t able to internalize it and let it guide their daily responsibilities.
- Level 4. Influenced. Everyone knows the story and understands how his or her functions contribute to execution of the company’s strategy.
- Level 5: Predictable. All employees own and act on the story and are emotionally connected to achieving the vision.
CEO Responsibility #2: Provide the Resources.
The CEO is responsible for making available all the resources the company needs to reach the vision.
- Level 1: Confused. Hiring and spending is random. No one, other than maybe the CEO, understands why certain people are hired and fired, or why certain initiatives get funded.
- Level 2: Described. Hiring and spending is reactive. Resources are allocated based on the emergency du jour. Everyone consistently worries about having the right people and being able to meet financial obligations.
- Level 3: Declared. There is budget-based resource allocation built on an agreed-upon budget that may or may not match the company’s current reality.
- Level 4. Influenced. There is forward-looking resource allocation based on an informed assessment of future needs and whether those resources advance the vision.
- Level 5: Predictable. Resource allocation is driven by opportunities, whether planned for or not. The organization often achieves competitive advantage by reacting to external events faster than the competition.
CEO Responsibility #3: Build the Culture.
The CEO must constantly observe and manage for the culture he or she wants–the set of shared attitudes, goals, behaviors, and values that characterize the group.
- Level 1: Confused. There are multiple, conflicting cultures. People are not sure what the organizational norms and values are, and therefore create their own.
- Level 2: Described. Values are stated but not embraced and don’t match the reality of the organization.
- Level 3: Declared. There is a rules-based culture. Employees understand but do not personally buy into the written and unwritten rules about the company culture.
- Level 4. Influenced. The majority of employees are engaged and motivated by the organization’s values and culture.
- Level 5: Predictable. This mission of the organization comes first in this culture characterized by a set of shared values across the workforce.
CEO Responsibility #4: Make Decisions.
The CEO must make informed, timely decisions affecting the entire organization, and must also empower employees to make good decisions.
- Level 1: Confused. The CEO insists on making every decision, resulting in slow execution.
- Level 2: Described. Only the CEO and a few executives make decisions.
- Level 3: Declared. Decisions are made based on agreed-upon processes, but decision quality is inconsistent.
- Level 4. Influenced. The right people make most decisions based on accurate data. The CEO is consulted only when appropriate.
- Level 5: Predictable. The right people make the right decisions in a timely manner, supported by up-to-date insight. Everyone understands which decisions they should make and which need to be escalated.
CEO Responsibility #5: Deliver Performance.
The CEO sets the bar for the level of performance the business achieves.
- Level 1: Confused. Few company goals are defined, and performance against them is not consistently measured, recognized, or rewarded.
- Level 2: Described. Basic measurements are in place for some departments but aren’t integrated with the rest of the company. Only financial metrics are consistently reviewed.
- Level 3: Declared. Most all departments have success measurements, but they aren’t always integrated or shared with the entire organization.
- Level 4. Influenced. The company has measurements across departments. Most employees are trained to provide predictive insight on achieving their goals. Some measurements and performance against them may not be communicated across all departments.
- Level 5: Predictable. Measurements and performance against them (current and projected) are communicated across all departments.
How did you do? Were you in the upper levels for most responsibilities? Or do you suspect your organization is operating at the Level 1 or 2 in some areas?
Getting to Level 5 requires dedication and persistence, but once you get there–a place of clarity, unity, agile responses, and predictable outcomes–you will find yourself at the true nirvana for modern CEOs and their employees.
First appeared on Inc.com