What Does a CEO Actually Do?

Last Updated Oct 15, 2010 8:10 PM EDT

There are millions of blogs on leadership and the role of a CEO but rarely do you hear a CEO expounding on his role in person. Normally they are spruiking the company or speaking on the latest organisational issue such as gender diversity. Several weeks ago I had the pleasure of hosting a Cambridge Society lunch for Rob Murray in Sydney.

Rob Murray is the Chief Executive of Lion Nathan National Foods (LNNF), which employs close to 8,000 people across Australia and New Zealand and delivers revenues in excess of AU$5.6 billion. LNNF is Australia's largest dairy and fruit juice company, and a major brewer in Australia and New Zealand. Brands include icons such as Berri, Dairy Farmers, XXXX, Tooheys, Hahn, Speights, Steinlager, King Island, and Petaluma. Rob Murray is probably the most successful Cambridge alumnus (Trinity) working in Sydney today and kindly agreed to speak.

The lunch operated under Chatham House Rules and because Rob had generously supplied copious amounts of two excellent wines from the Lion Nathan cellars (a Petaluma Riesling and a Stonier Pinot Noir), the conversation flowed freely. However, because his answers are in the public domain it was his answer to this question I found particularly interesting and worth sharing: What do CEOs actually do?
Rob started off by saying that it was his core belief that "Culture is the true long-term driver of the sustained success of a business or enterprise". Thus, according to Rob the most important role of the CEO is to improve the culture of the organisation both by his behaviour (CEO being the leader of leaders) and by his actions. However, he then went on to say that talking was not enough; even more critical was that any cultural change program needed to be measured. What Lion Nathan uses is the Human Synergistics Circumplex. For those unfamiliar with the Circumplex, there are 12 behaviours organised into three colour zones. Red is Aggressive/Defensive, green is Passive Defensive, and blue is Constructive. In a nutshell, Rob sees the key role of a CEO as shrinking the red and green and growing the blue. You can see how well he has achieved his goal on page 49 of this slide presention and the outcomes in terms of sales and profits on page 81. Given that LNNF operates in highly competitive, oligopolistic industries where aggressive and competitive behaviour would dominate the change is most impressive and so is the story of how it was done.

The funniest moment of the lunch came when Rob said he could only work in an industry where people paid cash for useful products and not in parasitic industries like law and investment banking. This, of course eliminated 17 of the 18 guests present, and then the remaining guest asked somewhat plaintively, "I suppose that includes psychologists?"

Rob replied in his Geordie accent and a beaming smile, "Of course."