Monday, August 22, 2011

The CEOs astounding balancing act

From The Definitive Drucker
… I've touched on failure, so I should mention success. Six of Business Week's top ten fastest-growing small American companies, and seven of the ten companies that have shown the greatest equity value gains over the last five years, didn't even exist twenty years ago. This dramatic performance highlights a key challenge to CEOs: to wrest the ability to challenge assumptions and redefine the way business is done from the financial markets. Up until now, the venture capital and equity markets have served as the primary vehicles for creating new ways of doing business and even innovation—closing companies and opening new ones. Sure, shareholders liked this power, but it flies in the face of the business's need to sustain itself. Ultimately this short-term obsession with results is closing down businesses, displacing employees, and ruining communities. It is the CEO's responsibility to use his or her uniquely broad field of vision to challenge the status quo when answering the question "What is needed?" so that companies and communities can remain viable. On top of everything else, CEOs must do an astounding balancing act: They must lead the enterprise for the customers and employees and accommodate, but not bow to, the harsh demands of the stock market.

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