Corporate Doctrine
The CEB Doctrine embodies principle insights formed by researching what the best companies do. For more than 25 years, these beliefs have successfully driven the decisions and actions of The Corporate Executive Board.
1. Go Outside Your Company and Industry for Innovative Ideas
Most organizations use very little comparative data and experience to assess their own costs and capabilities, resulting all too often in incorrect decisions about what businesses and processes to invest or disinvest in. The best leaders regularly benchmark not only their processes and costs, but also their decisions against other organizations in and outside their industry to benefit from the tacit knowledge and experience of peers outside their own organizations.
2. Mine Your Value Chain for Ideas to Build Competitive Advantage
While phrases like “the customer is always right" and “customer at the center" are ubiquitous, most organizations rely primarily on antiquated tools such as customer panels and surveys for identifying and meeting emerging customer needs. The best leaders organize their companies around customer segments and build processes to challenge ingrained assumptions about core markets. They also integrate their suppliers into their product innovation, design, and manufacturing processes to sense market changes more quickly than their competitors.
3. Revisit Strategy Assumptions as Frequently as Business Conditions Change
Most organizations’ planning horizons are too short and their response times to changing information too slow. This happens because many leadership teams are reluctant to revisit the assumptions underpinning corporate strategy. The best leadership teams, by contrast, frequently test the core assumptions underlying the strategy; changes in the assumptions trigger immediate revisions to strategy.
4. Align Functional Goals to Corporate Strategy (Rather Than Just Focus on Cost or Internal Customer Satisfaction)
Leading companies identify the few functional processes or capabilities unique to their company that create competitive advantage and manage the rest to a standard of global efficiency. The best functional leaders work back from the organizational strategy to develop their most important performance metrics. These leaders avoid being beholden to generic cost or internal customer satisfaction goals that are detached from the organization’s larger strategic goals. They are wary of business cases—especially within corporate functions like Finance, HR, and IT—that employ self-referential goals of efficiency or low-credibility, return-on-investment calculations.
5. Measure What Matters, Not What Is Easy to Measure
Every important driver of organizational performance can, and should be, rigorously measured. While most organizations usually organize around metrics they can easily capture (e.g. employee satisfaction, customer satisfaction), the best companies organize around metrics that truly tie to economic outcomes (e.g., employee engagement, customer effort scores).
6. Pamper Your Stars, but Move Your Middle
Human factors such as the composition and skill of the leadership team, engagement and training of the workforce, and leaders’ change management capabilities disproportionately drive the difference between moderate and high corporate performance, which could be up to five times greater in high-performing companies. While the best leaders still pamper their stars, overall they focus less development attention on stars and underperformers and instead devote their energy to “moving the middle” performers, thereby driving the most dramatic productivity improvements.
7. Continually Make Opportunistic Hires to Close Future Capability Gaps
There are increasing tensions between the fast-growing complexity of many jobs at all levels of the firm and the sharp differences in capabilities of most individuals. The best leaders continuously assess their employees’ skills not just today, but over a multiyear horizon, and determine the most economical ways to close skill gaps by developing the current workforce, replacing the workforce, or restructuring the work itself. Even when these leaders do not have open positions, they benchmark their current employees against a steady pipeline of external candidates so that they can make opportunistic hires that best meet their evolving needs.
8. Focus on Building Better Managers, Not Bigger Paychecks
While organizations obsess over compensation, benefits, and employee brands, manager quality is extraordinarily powerful in creating motivated and effective employees because managers are a day-to-day factor in work life—not one-off events like performance reviews or rewards. The best leaders invest disproportionately in improving manager quality. They provide managers with tools that offer daily views into business performance metrics and with training on how to analyze and respond to data-informed views of the organization. They invest in acquiring top manager talent and reward top managers visibly and significantly. They then leverage their management team at all levels of the organization to communicate to each employee the organization’s strategy and how the employee contributes to it each day.
9. Control Your Future by Generating Your Own Investment Capital
Structural changes in the credit markets have reshaped cost-of-capital calculations, permanently rendering obsolete approaches such as high-leverage, corporate-center-funded plays. The best leaders continue to focus on cash-flow drivers in their operations and communications to investors. They maintain more conservative balance sheets, do fewer M A deals to enable greater focus on integration, and have a bias for the company to self-fund investments. And they protect their long-term growth bets even in the most challenging economic climates.