The CEO's Brain

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.

Comments

re: The CEO's Brain

George, are you seriously suggesting that there is someone who did not know that?The question is how well you can run a company with a shareprice/revenue/profit mindset alone. Fortunately, I can focus on supporting my people to do good business with my customers, which over 20 years translated to growth in revenue and profits.

re: The CEO's Brain

Agreeing with the prior comment, I believe that the CEO usually has a strategy in place for moving those metrics. Company officers have to show not only their orientation to the metrics but also that they are on the CEO's program for getting there. Lots of good strategies for growing sales and profits can conflict with an existing strategy and undermine its success.

re: The CEO's Brain

I think the last two comments are confusing what a CEO does with the language that resonates with her. I agree with George: when communicating with a CEO (or anyone at board level), it is necessary to develop an "enterprise-based" language rather than a "functional-based" language. As a sales executive, I have realized this for many years. When selling an IT system to a CEO, she will be interested in how that system will further the business' success, not if it's "cool" or "the latest thing". And of course this will be evaluated using enterprise metrics.

re: The CEO's Brain

George Manka -- good point.The miss-communication between CIOs and CEOs often happen because the CIO thinks in terms of "means" -- Cloud Computing, virtualization, services-oriented architectures while the CEO thinks in terms of "ends" -- higher revenue and increased profits. It's the job of good CIOs to translate the means into ends -- only then will you your point be understood.