Sometimes the most effective tools are the simplest ones.

Years ago, Fred Wilson, shared a story that taught me a lot about the role of a CEO. Last year, he wrote a post about the same story:

I started in the venture capital business just as the PC hardware bubble of the early 80s was busting. Our portfolio was a mess. It was a great time to enter the business. I cleaned up messes for my first few years. I learned a lot.

Anyway back to the CEO search. One of the board members was a very experienced VC who had been in the business around 25 years by then. I asked him “what exactly does a CEO do?”

He answered without thinking:

A CEO does only three things. Sets the overall vision and strategy of the company and communicates it to all stakeholders. Recruits, hires, and retains the very best talent for the company. Makes sure there is always enough cash in the bank.

I asked, “Is that it?”

He replied that the CEO should delegate all other tasks.

In the years since Fred first shared that story with me, I’ve come to see that articulating the role in that way is incredibly powerful; it’s simple and elegant.

More important, it’s flexible. These days, I expand on each of those functions. For example, I’ll share with a client that maintaining the culture, understanding what is the “right” way for the company to do things, is as much a part of the vision as the original eureka moment that gave birth to the whole shindig.

I also tend to point out that recruiting, hiring and retaining the best talent also means making certain everyone knows what’s expected of them and they each play their position—more like the ’98 Yankees than a five-year old’s soccer team (with each kid chasing the ball and nobody playing position).

I also expand the interpretation of the notion of making sure there’s enough cash to meaning making sure that everyone has the resources they need to succeed.

And that’s where the simple magic comes in. Most people think an organization works like this::

…when the best organizations look like this:

The difference is more than visual; it goes to the heart of the last, and arguably most important, function of the CEO.

What I’ve learned (from Warren Bennis) is that when the takes this posture, they are in the best position to ask those above them in the upside-down pyramid the best question any manager can ask: What do you need?

Call it Needs-based governance. It’s an incredibly clarifying and empowering tool. It expands the notion of the CEO making certain the company has enough cash (an important task) to include the notion of the CEO making certain that the great people they’ve hired (and put into the right positions) have what they need to succeed.

Even more, it turns on it’s head the employee-infantilization that typically occurs in a top-down, command-and-control structure and makes everyone ultimately responsible for asking the single most important question facing any company: What does the customer need?

Too often each of us abdicates responsibility for our success, our lives, and puts the focus on those whom we assume have more power, more capability. It’s understandable; withstanding the daily pressure of work—especially work in a startup—creates distress. And when we’re distressed, we regress and just want to be told what to do (and then cooperate or not, depending on whether we’ve regressed to being a teenager). But when the company is organized around this central question—What do you need to hit that impossible deadline? What do you need to double your market penetration? What do you need to recruit that top engineer or salesperson?—the regression ends and adults take the field.

Needs-based governance (and I suppose I should apply for trademark on that) doesn’t create miracles; very often needs will go unmet. But stretching your partner, your co-founder, your colleague, yourself to struggle with that question drives for a greater sense of mission, purpose.

And, I suppose, that’s a need we all share: to be a part of something just slightly better than ourselves alone.

Ah, but a man’s reach should exceed his grasp, Or what’s a heaven for?—Robert Browning