1: The executive team had gathered to make three investment decisions.
“First, they discussed the investment for a £10 million nuclear power plant,” Carolyn Dewar, Scott Keller, and Vikram Malhotra write in their book CEO Excellence, citing C. Northcote Parkinson’s 1958 book The Pursuit of Progress.
Total time spent to make the decision: Two and a half minutes.
Next up? What color should they paint their bike shed? Total cost? About £350. Time spent? Forty-five-minutes.
The final agenda item? “The staff needed a new coffee machine, which would roughly cost £21,” the authors write. “The committee discussed this topic for one hour and fifteen minutes and decided to postpone the decision until the next meeting.”
Okay, then.
2: What happened here is an example of the “Law of triviality,” in which issues everyone understands and may have strong opinions about take up an excessive amount of time.
This law, also called “The Bike Shed effect,” is a primary reason people complain: “We spend too much time in meetings.”
Executives respond by attempting to consolidate meetings. But this usually makes the situation worse. Because “more ends up packed into less time in a less effective format,” Carolyn, Scott, and Vikram write, “making the time spent feel even more senseless.”
The data bears this out: “Only 38 percent of CEO direct reports feel their top team is focused on work that truly benefits from a top-of-the-house perspective,” they note, “and only 35 percent feel the right amount of time is allocated to important topics.”
The best CEOs take a very different approach. “These leaders make sure that only needle-moving work items are on the agenda,” the authors observe.
“My role is making sure the top team does the big things really well,” says Ecolab CEO Doug Baker. “Our job is to focus on what can make the company successful, and what can kill us. All the rest is email.”
Thermo Fisher Scientific CEO Marc Casper agrees: “One of the reasons for our success is the ‘ruthless prioritization’ of what we work on together. We’re okay with letting things be mediocre that aren’t on our list of priorities. That’s perfectly fine. The key to success is that we focus our time and energy on what really matters.”
3: What type of work do the best leadership teams focus on?
o Corporate strategy (priorities, targets, M&A)
o Large-scale allocation of resources
o Identifying synergies and interdependencies across business units
o Validating decisions that significantly affect all employees
o Assuring delivery of company financial targets
o Providing direction for major company-wide projects
o Reinforcing the desired company culture (including individual and collective role modeling)
o Building the company’s leadership bench strength (which includes providing feedback to one another)
What they don’t spend time discussing are topics that smaller subsets of the group can better handle.
“For example,” the authors write, “quarterly business performance reviews are done with a subset of corporate leaders (e.g., CEO, CFO, and CHRO) and individual businesses unless there is a cultural reason to combine the reviews into one session.
“Corporate governance and policy decisions (e.g., risk management controls and processes) are typically taken by a subset of leaders, and those decisions are then shared broadly so that the team can execute against them.”
More tomorrow.
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Reflection: How often do I hear, “We spend too much time in meetings?” What can I do to bring about an awareness of the importance of the “ruthless prioritization” of what we work on together?
Action: Discuss with my team.
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