Yesterday's news is a harbinger for strategic growth disaster.
The September 21 issue of The Wall Street Journal revealed that AOL Inc. and Avon Products "embraced a hot management trend: eliminating the second in command." Says Crist/Kolder Associates president Tom Kolder, price "the CEO wants to be closer to the action." At this rate, discount many are moving dangerously close to a new title: Chief Everything Officer.
At what point in cost cutting do you begin to cut into the muscle of the organization?
Right now, ailment at least 40 major companies (according to Crist/Kolder) have moved one step closer to that stage. Between January 2008 and June 2009, these companies have eliminated the COO or president position, while only 20 added it.
In my opinion, these companies have cut dangerously close to the bone. Unless they are intentionally positioning themselves for a fire sale, this is a strategic disaster waiting to happen.
Now that I have been fortunate enough to work for several $1B+ companies and clients, consolidating the President and COO positions into the CEO role presents these major risks:
1. The CEO gets too involved in the daily activities of the company, marginalizing her key executives' confidence and autonomy.
2. The role of strategic planning and focus on critical goals gets diluted.
3. Succession planning candidates suddenly disappear, or at least diminish greatly.
Before you consider more cost cutting in your organization to model yourself after these so-called market leaders and corporate behemoths, consider other strategic options. How about good old fashioned organic growth and innovation?
Please don't leave this decision to the Chief Everything Officer.
Copyright 2010, Lisa Nirell. All rights reserved.