The document summarizes the four key tasks of a CEO: 1) Defining the meaningful outside by determining which external stakeholders matter most and what results are truly meaningful. 2) Deciding what business you are in by evaluating where the company should focus to win and where it should not play at all. 3) Balancing the present and future by setting realistic goals and prioritizing short-term goals that support long-term success. 4) Shaping values and standards by connecting them to meaningful external stakeholders and defining what winning externally looks like.

1. ~ IDEA IN
". PRACTICE
The iFourTasks of the CEO
The CEO hasa unique external perspective to bring to his or.her real work,
which is to link the outside to the inside. This involves four tasks.
Defining the Deciding. What
Meaningful Outside ..::;. Business You Are In
n
- Of all your external stakeholders, .J Where should you play to win? Where
which are the ones that matter most? shoUld you not Pl'/Wat all? T.hesearedif-
What results are the most meaningful? ficult decisions that require thorough evaluation and dis-
EXAMPLEAt P&G we believe that the consumer is boss. cussion. However, only the CEOhas the enterprisewide
perspective to ma~e the tOIJrgh choicesimlOlved.
Without'consumers, there is no P&G. Therefore, our
meaningful results come at two critical moments of EXAMPLEWe decided to focus on P&G's core busi-
truth: first, when a consumer chooses to buy a P&G nesses - laundry products, baby diapers, feminine care,
product over all Qthers in the store, and second, when and haircare- busines,sesill which P&G was clearly the.
she or a family member uses the product at home. industry leader, and businesses that fit strategically with
Although other external stakeholders have important P&G's core strengths. As for industries where we won't
demands, when there's a conflict, we resolve it in favor compete,rPrul1ing isn'Uls s~)Cy asacq}lisition, but it's just
of the one who matters most: the consumer. as important and perhaps more difficult. For instance,
we let go of a sentimental favorite, Jif, because it didn't
play to our strength of creating brands ona global scale.
Only Americans eat peanufbutter.
Balancing Present ShaplhgVallJes
~
~..;;: and Future ~--
- and Standards
Learningto strike the right balance be-
Values establ.ish a company's identity;
they are about behavior. If the company
tween the short and the long term comes
is to win, these values must be connected to the mean-
more from experience and judgment than from facts.
ingful outside and relevant for the presentand future.
Defining realistic growth goals is the first.step toward
Standards areraboUt expectationrs; they define what vvin-
getting the balance right; determining what goals are
ning on the outside looks like. They are best established
"good enough" to deliver in the short term is critical to
by answering two important questions: Are we winning
gaining credibility and momentum for the longer term.
with those who matterirnost:?Arewe winning against the
And the CEO's personal involvement in leadership devel-
very best?
opment may have the single biggest long-term impact
on the company's future. EXAMPLEP&G's values had been in place for generations,
EXAMPLEWehadbeen treating internal stretch goals but over tip1e they had becofue internallyf()cused and
interpreted in a way that put employees' needs ahead of
as external commitments. Shortly after I became CEO,
consumers'. We reoriented our values toward the outside.
we took the stretch out of financial goals to make them
Forinstance,itruStihadcome to meaniemployeereliance
more realistic - not a popular decision on Wall Street,
on the company for lifetime jobs. Now it means consum-
but one that made sense for the longer term. And on
ers' trust in P&G brands. Our standards, too, have been
the organizational development side, I'm involved in
reoriented externally. We measure c°tlsufuer household
the. career planning ofapproximately150 P&G.leaders
with the potential to become line presidents or function
penetration - that is, the percentage of households that
buy a P&G brand - and consumer loyalty, meaning the
heads. They are the future of our business.
percentage ofconsumej;S tha,t COllverttO regular users.
That's how we know if we're winning with those who
matter most. We also compare P&G's performance with
that of our strongest competitor§ to el1surethatwe win:
against the very best.
hbrsasia.org I May 2009 I Harvard Business Review South Asia 39