7 steps to implement a strong Office of the CEO investment protocol
CEOs, Chiefs of Staff and Executive Assistants: the price of a bad investment decision can cost you your job. Buying another company, building new factories or funding research into new technologies is a huge decision for your Office of the CEO. If your investment goes south, your employees start quitting, your market share weakens and your board turns on you, which can lead to your termination.
History is littered with stories of failed CEOs making bad investments: Adam Neumann from WeWork, Kenneth Lay from Enron, and Stephen Case from AOL. That’s why high stakes investment decisions benefit from rigorous investment protocol, which can be facilitated by the Office of the CEO.
Here are 7 Investment Protocol steps to follow in your executive office:
1. Define objectives and criteria
Ask yourself: Why are you making an investment? Reasons might include new growth, product diversification, or beating your competition to become #1 in your market. Next question: What criteria will you use to evaluate investments? ROI, risk, strategy alignment and time horizon are common considerations.
2. Gather information
Complete full research on the investment opportunity and consult financial analysts, industry experts and legal advisors to help round out your understanding of the investment opportunity. Remember, you want to derisk the investment by getting sound intelligence.
3. Complete due diligence
Analyze the investment according to your goals and criteria. Produce a financial analysis, risk assessment, strategic analysis, feasibility study, and legal review to look at all angles of the investment.
4. Develop investment proposals
Create multiple investment proposals with different scenarios (base case, aggressive case and conservative case) along with an investment summary, benefits, financial projections, implementation plan and risks.
5. Review and approve
Set up multiple rounds of review and formal approval, which can often include your board. Get sign off and buy-in from all relevant parties.
6. Execute and monitor
Implement the investment and assign a project owner to this key workstream to ensure that the project execution is delivered on time, within budget and hitting the milestones that you’ve previously outlined.
7. Evaluate and report
Report the status and performance of your investment to your business, board and shareholders. Deliver regular communication to control the success narrative of the investment, especially if you hit roadblocks along the way.
That’s a wrap. Implement these 7 steps to establish strong Investment Protocol in your Office of the CEO. You’ll confidently derisk big investments, while avoiding getting a pink slip.
Connect with Mackenzie Lee, Cedar CEO, on LinkedIn here to discover how to implement rigorous investment protocols and make high-stakes decisions with confidence.
