The "use-by-date" of a CEO LO9986

John O'Neill (
Mon, 16 Sep 96 13:44:44 +1000


Organisation's grow and die in different cycles. There is the start-up, full =
of life and energy. There is the maturing phase where things become routine =
and bureaucratic. Then there is the death cycle where the organisation goes =
out of business.=20

For organisations to stay in business over a long period of time, they must =
find a way of shifting out of the bureaucratic phase back into the startup =
phase. Otherwise, they'll die. (I'm sure someone has written about this, =
sure would like some pointers to references :->).

How do you move from the bureaucratic to start-up phase? Possibly strategies =
- BPR, redefine your organisation
- down-sizing
- create a new functional unit that is innovative and investigates a new =
market. Eventually you want your organisation to transform into this new =
- retrain your whole staff into a new culture (e.g. become more "customer =
and service oriented".)

There are probably more strategies (and someone else has probably done a =
better job of describing them).

The key point is that different types of CEOs are required for each =

For example, in Australia, Telstra is our telecommunication giant who =
suddenly had to cope with competition when the telecom market was =
deregulated and Optus became a competitor. An American, Frank Blount was =
brought in to restructure the organisation. He cut costs, changed the =
organisation from an engineering to a marketing organisation, slashed many, =
many jobs, and basically converted Tesltra into one of the most cost =
efficient telecoms in the world.

Last week, Telstra announced their latest profit results - $2.3 billion =
profit, the second largest in Australian corporate history. Telstra also =
announced the strategy for the next 12 months - cut another 22,000 jobs.


Is it because the downsizing strategy has been so successful that management =
want to continue this strategy?
Is it because of some new technological innovation that will require all =
telecoms to cut staff in the future to be more competitive?
Or is it because this is the only strategy this group of mangers knows how =
to successfully implement, and therefore is implemented in an idealogical =
manner (because it has been historically so successful)?

There may be other reasons, but I strongly suspect the third reason is the =
correct one. Testra have not only become a marketing organisation, part of =
their recent announcement was that they were cutting their research labs. =
Anyone who knows Australia knows that there are environmental and wildlife =
conditions that make designing and implementing a telecom network unique to =
anywhere else in the world. Yet, Telstra plans to cut this expertise. ... =
hmm ....

To me, it is obvious that the long-term future of this company is being =
sacrificed by the need to make short-term profits. But how do you change the =

By the time the long-term implications start taking effect, the present =
management will probably moved on (with glowing references) to another =
company to perform a similar exercise (a good example of this is the mess =
David Hill is causing to Soccer Australia, after leaving a similar mess at =
the ABC).

"Someone" must have oversight of the most appropriate CEO at a company at a =
given time, and for a period of time. Is it the shareholders? the board of =
directors? the customers?

Methinks that selecting the most appropriate TYPE of CEO at any point in an =
organisation's life is possibly the most important part of a being an LO. =
However, the traditional power balances in most organisations make it =
difficult to unseat the most powerful person in the organisation (the CEO).=20=

How do you keep an organisation healthy and retain the ability to cylce =
through different CEOs at different points in a organisations life?

John O'Neill
DSTO C3 Research Centre, Australia


"John O'Neill" <>

Learning-org -- An Internet Dialog on Learning Organizations For info: <> -or- <>