The Complexity of a CEO’s Role: What Makes It So Challenging?
The CEO’s work is quite complex because they are responsible for all processes and results. The CEO needs to have different skills that help improve the quality of management, increase the company’s operational efficiency, and the effectiveness of budget spending. In addition to the current processes, the CEO should be engaged in developing the company to understand when it is necessary to accumulate a resource and when to start heavy traffic. The CEO, like any effective manager, should be able to manage time and know how to concentrate on the task. The CEO needs to perform a large amount of work that may be related to various company activities, making their work complex and multifaceted.
The mini case identifies several situations that pose significant difficulties for CEOs’ success. It depends on the manager’s experience and ability to solve tasks and competently build processes at the enterprise. Thus, McDonald’s could not cope with the growing competition in the world and the rules set in the market (Hitt, Ireland, & Hoskisson, 2015). The head was also unable to achieve significant results when working with finances in the organization, which led to substantial expenses, untimely payments of salaries, and, as a result, the loss of trust of the company’s employees.
The third considerable problem that the company came to under the illiterate leadership of McDonald’s was that at a time when purchasing power was reduced, and people needed to buy goods at more affordable prices, P&G did not regulate its prices (Hitt, Ireland, & Hoskisson, 2015). In this regard, customer loyalty was significantly reduced, which caused damage to the work of the entire enterprise.
Rehiring a Retired CEO: Is It a Good Practice?
Some companies, including P&G, have applied in their work the practice of returning to work a manager who has retired. The advantages of this practice are that a person who has returned to work has studied the company well over the years and knows what strengths and weaknesses exist, as well as opportunities and threats. Based on previous experience, such a manager also knows how to conduct business for the company to achieve success among competing firms.
Nevertheless, such a manager has several drawbacks, such as strictly established views on various company processes without innovation. In addition, the disadvantage may be that a person working in the same company for a long time may not see new necessary areas of work, unlike a person with contemporary views and ideas. A similar situation occurred at P&G when consumers were waiting for new lines and company products, and the new CEO decided to create new directions for the company.
Succession Planning at P&G: How Should the Company Replace A. G. Lafley, a Former CEO
To replace Lafley after his retirement, P&G must prepare in advance a person who can adequately take the post of CEO. It is essential to choose a specialist for this post who has the necessary skills for the manager, extensive experience, and many promising ideas for the company’s development. Moreover, to prepare for the inheritance, Lafley must prepare the future CEO for a certain amount of time, passing on his knowledge to them and sharing the experience gained during work. In other words, it is necessary to carry out global work in preparing a new CEO with the expectation of a long-term job that will require a lot of perseverance, skills, and considerable experience. This is necessary so the company does not regress or stagnate but develops, grows, and attracts more consumers.
Reference
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2015). A change at the top at Procter & Gamble. In Strategic Management: Competitiveness and Globalization: Concepts and Cases (11th ed., pp. 368-397). Cengage Learning.